IPL to open bid for two new teams tomorrow
06 Mar 2010
When the Indian Premier League (IPL) opens bids for two new teams for the Twenty20 tournament on Sunday, 11 bidders are expected to be in the fray though some others have chosen to keep away thanks to the stiff bidding conditions.
Consortia comprising high profile industry groups and individuals including Adani Group chairman Gautam Adani, Kerala-based financial services player Muthoot Group, Hero Honda MD Pawan Munjal and members of agriculture minister Sharad Pawar's family are likely to put in their bids, according to people close to the matter.
An official involved with the IPL said most bids were expected to be made through consortiums with private equity funding.
The minimum bidding price has been fixed at $225 million. There is a clause however under which bidders have to furnish a bank guarantee for the entire amount for the 10-year contract within a week of winning the bid. Several interested parties, including the Sahara Group, ICICI Ventures, and Bollywood stars Ajay Devgan and Sanjay Dutt, have dropped out from the process, and according to officials three industrial houses decided not to bid for the new teams.
The IPL which has gained immense popularity to emerge as the most lucrative cricket property in a short time is increasing the number of franchise teams from eight to ten with its fourth season next year.
New cities in the fray for which potential bidders will bid include Pune, Ahmedabad, Nagpur, Kanpur, Dharamsala, Vizag, Rajkot, Cuttack, Baroda, Kochi, Indore and Gwalior, with Ahmedabad, Pune and Nagpur being the frontrunners.
According to reports there was not a single bidder till Thursday, however as many as 11 bids were lodged for the three cities, seven of these being for Ahmedabad alone. Apart from stringent rules set by the governing council a big deterrent had been the base price which at $225 million was more than four times the base price of $50 million fixed during the first bidding in 2008.
The refrain among those who have chosen to keep away from the process is that the cost of team acquisition was working out to be too high as an investment of minimum Rs1,550 crore was required for buying a team which seemed prohibitive.