Bankers, PE funds join IPL bidding

By SiliconIndia   |   Saturday, 26 January 2008, 05:15 Hrs
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Mumbai: PE funds and bankers, who largely invested in IT related ventures and other manufacturing industries, are now showing interest in bidding for teams of Indian Premier League cricket (IPL), anticipating a big business prospect. Along with Deutsche Bank's global markets head Anshu Jain, who has already put in a bid for one of the teams, a number of private equity funds are lining up to bid for the eight franchises on offer, reported The Economic Times.

Temasek, India Value Fund (formerly GW Capital) and Macquarie Bank are some of the investors, who have picked up bid documents for IPL franchises. Big PE funds are looking at cricket as one more asset class they can put their money into.

"It is unlikely that private equity funds will go alone. They will probably team up with people who have sports management expertise to finally run the franchise," says an executive close to the developments.

"Temasek's head office in Singapore was hugely interested in the IPL and they were very excited about it," says a source. While Deutsche Bank has picked up a bid document, Jain, who is the captain of the Desutche Bank Cricket Team, is expected to bid in his personal capacity for the Kolkata franchise. When contacted, Jain declined to comment immediately.

In the IPL bid, the biggest interest has been shown by Macquarie Bank, an Australian bank. The bank, said to be fuelled by having Steve Waugh on its board as a non-executive director, has shown interest in bidding for a team franchise as well as ground rights and management.

Another major in the bidding race is Future Capital. It will be bidding for one of the franchises through its private equity arm Indivision, which has just raised $400 million. Though the floor price for each of the eight franchises was set by the BCCI at $50 million for ten years, the actual bids are expected to be three to four times more than it.

Since a lot of revenue streams are unclear as of now, many experts say that private equity investors would be at a disadvantage against the strategic investors. A corporate investor can use the franchise to launch a corporate marketing program.

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