IPL – 2 (Indian Premiere League) became a success and it made money for both the BCCI & its owners. After the great success of IPL-2, the IPL team Kings XI Punjab, co-owned by Bollywood actor Preity Zinta, Dabur group’s Mohit Burman and Bombay Dyeing’s Ness Wadia, may offload 10-15% equity stake in the team.
According to the media sources, the team is looking for new investors. The team is in talk with various investors.
Right now it is not clear that if dilution of the equity will be done through stake sales by existing promoters or through the issue of fresh equity. But according to my logic and understanding of the finance, it will be through the sales by existing promoters.
In IPL-2, Kings XI has made a profit of Rs.26 crores this year. The co-owners of Kings XI, Punjab had acquired the team for US $ 76 million last year.
If the equity dilution plan will be executed, Kings XI will be the third team to consider a stake sale.
Rajasthan Royals had offloaded 11.7% stake in its to Bollywood actress Shipla Shetty this year. At the time of stake sale, Emerging Media had announced that the Jaipur based team was valued at US $ 140 Million, Emerging Media had acquired the franchise for US $ 67 million last year.
Knight Riders, owned by Shah Rukh Khan, Juhi Chawla and Jai Mehta is expected to announce a stake sale of 10-20%.
Deccan Chronicle, which owns this year’s champions Deccan Chargers, had appointed KPMG to find potential partners to pick up stake last year, but later deferred its plans by a couple of years.
My View Point about IPL Stake sale -
Have you ever think that, Why Mukesh Ambani who fully owns Mumbai Indians team is not looking for a stake sale? And why these film stars are looking for selling their stakes in the team? Is it because these film stars are more smarter than Mukesh Ambani?
No. It is not. The reason is because the Financial IQ of these film stars is much less than Mukesh Ambani, the world’s top 10 richest person and India’s richest person.
IPL teams have appreciated in its value during last year by over 100% even during the time of recession. As I have already told you before that IPL teams are Assets. Owning an IPL team is exactly same like owning any other asset such as stocks, bonds, gold & real estate.
Now Rajasthan Royals appreciated from US 67 millions to US $ 140 million this year. So What it means? Well, it means that this Asset has given you a return of more than 100% in just one year right?
Now what happens if you own any IPL team for 5 years? Well, at a 100% compounded return per annum, the valuation of Mumbai Indians will become US $ 3.5 Billion (Yes that’s B) which was bought by Mukesh Ambani for just US $ 110 Million in year 2008.
And at that rate the Valuation of Rajasthan Royals will be US $ 2 Billion which was only US $ 67 Million in its value in 2008.
Now just imagine that what will be the valuation of these IPL cricket teams after 10 years? We can’t imagine it. It will be worth of Billions right? And this is why Mukesh Ambani is not looking for selling or diluting his stake in Mumbai Indians. Because he knows this thing.
All the film stars want to sell or dilute their stakes for money because they are not as Financially Intelligent as Mukesh Ambani. They are seeing short term profit. They can’t see the long term enormous profit.
0 comments:
Post a Comment