NEW DELHI: Can't get enough of your favourite cricket team? Well, you could soon have the option of becoming a stakeholder in it. In fact, cricket is all set to come to the rescue of Dalal Street, which is currently on a sticky wicket.
The franchisees of the Board of Control for Cricket in India’s (BCCI) Indian Premier League are now planning to open their account on Dalal Street with initial public offers (IPO). Teams such as Deccan Chargers, Chennai Super Kings (CSK) and Mumbai Indians are planning to cash in on their popularity to raise money in the stock market.
BCCI has already given a green signal to all the teams, allowing them to be listed on the Bombay Stock Exchange. “There are no restrictions on these franchisees in this regard. They are the owners and it’s solely up to them as to how they raise capital. It can be in form of private equity or an IPO,” said Lalit Modi, chairman & league commissioner of IPL.
The owners of IPL teams are probably getting inspiration from their Western counterparts, in drawing up plans to tap the stock markets. In Europe and America, sports franchisees list themselves on the bourses after a year or two of their inception. In Europe, football clubs have been in the process of listing on stock exchanges from the early 90’s.
Many famous clubs such as Manchester United, Chelsea and Arsenal opted for listing to raise capital for upgrading their home stadiums and for other infrastructural needs. Currently, there are about 35 football clubs listed on the various stock exchanges all over Europe. Recently, the $115.9-million IPO of Olympique Lyonnais, a French football club, was over subscribed 6.5 times in and outside France.
J Krishnan, CEO of Deccan Chargers, told SundayET that they were aware of this trend abroad and may soon come up with a public issue. “We’re currently evaluating all options to raise capital and IPO is certainly one of them. However, nothing has been finalised yet,” he said.
A spokesperson for CSK confirmed that the franchisee may come up with an IPO but there is no timeline attached to its plans. “We are currently in the investment phase and anticipating financial success only from the second year. We have been approached by many PE firms and financial institutions. As of now, all options are open,” he said.
A Mumbai Indian spokesperson confirmed that the franchisee may come out with an IPO. However, they too haven’t finalised their plans yet. “We don’t rule out anything. But it is too early to share the details,” he said.
Analyst feel that with property rates soaring at a phenomenal pace, these franchisees will require some source to raise capital to buy out and upgrade some stadiums or construct permanent home grounds. “This capital can be raised in the form of PE or an IPO,” said Rajesh Jain, executive director of KPMG.
Source: http://economictimes.indiatimes.com
