IPL franchise valuations significantly higher in year 2
Televisionpoint.com reports:
The Champions of the first Indian Premier League (IPL), Rajasthan Royals, runners-up Chennai Super Kings and multi starrer Deccan Chargers are seeking to raise money by diluting their stake in these entities as they gear up to make big bucks in the new season.
While some of these teams have already roped in investment bankers or financial and business advisory firms such as KPMG to work out valuations, financial experts and valuers differ widely in their estimates.
On their part, these teams are expecting valuations of $ 250 million, but experts like Sanjiv Agarwal of Ernst and Young say they won't be surprised if some of the multi-starrer teams command valuations two or three times that figure.
Agarwal was part of the E&Y team that had done the valuation for Team India some three years ago. Today, he puts Team India's valuation at $ 5 billion.
The first IPL season was a huge success and some franchises such as Chennai Super Kings, Kolkata Knight Riders and Rajasthan Royals even managed to break even or spin profits....When contacted, KPMG executive director Rajesh Jain refused to put a valuation for any IPL team. But he said value estimates for a team would be done solely on the basis of cash flow. He said quite a number of investors, both domestic and foreign, were looking at acquiring stakes in IPL franchisees for strategic purposes.
The market buzz is that media firms, ADAG, Sahara Group, Future Group and financial entities such as ICICI Venture, Sequoia Capital and India Value Fund are exploring opportunities to join the IPL bandwagon. Names of some international players like Providence, Macquire Bank, DE Shaw, Deutsche Bank, Alcazar, Engelfield are also doing the rounds as possible investors in IPL franchisees.
