 "Gujarat Titans")
Gujarat Titans’ players after Punjab Kings won the IPL 2024 T20 cricket match at the Narendra Modi Stadium, in Ahmedabad, Thursday, April 4, 2024. (PTI: Photo/Vijay Verma)
In a significant development within the cricketing world, Luxembourg-based private equity firm CVC Capital Partners, which owns a controlling stake in the Indian Premier League (IPL) franchise Gujarat Titansis exploring the possibility of exiting the ownership of the decorated team, according to a report by The Economic Times.
CVC Capital Partners is reportedly engaged in discussions with Adani Group and Torrent Group to divest a majority stake in the IPL team Gujarat Titans, the business daily claimed, citing sources. The private equity firm aims to retain a minority interest post-sale.
The three-year-old Gujarat Titans could potentially be valued between $1 billion and $1.5 billion.
Business Standard could not independently verify the report.
How did CVC acquire Gujarat Titans’ ownership?
In 2021, CVC acquired the franchise for Rs 5,625 crore ($745 million at the then-prevailing exchange rate). The lock-in period mandated by the Board of Control for Cricket in India (BCCI), which restricts new teams from selling stakes, is set to expire in February 2025.
The BCCI had invited tenders for the addition of two new city-based teams to the IPL in 2021. The Ahmedabad franchise was highly contested, with Adani Group bidding Rs 5,100 crore and Torrent Group offering Rs 4,653 crore.
Ultimately, CVC Capital’s Irelia Sports India outbid the competition to win the franchise. The Gujarat Titans clinched the IPL title in their inaugural season, substantially enhancing the brand’s visibility.
“Having missed out on securing the Ahmedabad franchise during the 2021 IPL expansion, both Adani and Torrent are now competing fervently to acquire a majority stake in the Gujarat Titans,” the report cited an official as saying. For CVC, this presents a prime opportunity to capitalise on their investment.
High interest due to high valuation?
US investment bank Houlihan Lokey’s assessment places the Gujarat Titans’ brand value at $124 million, ranking them eighth among IPL teams, while the Chennai Super Kings lead the pack with a brand value of $231 million.
Meanwhile, the IPL’s overall valuation has surged to $16.4 billion, bolstered by a groundbreaking $6 billion media rights deal.
This lucrative media rights agreement, finalised by the BCCI with Disney Star and Viacom18 in 2022, has significantly increased the league’s appeal to investors.
“Investor interest in IPL franchises has soared as the league has demonstrated robust cash flow potential,” the report added, citing an official.
Adani’s foray into the cricketing world
Adani, in contrast to Torrent, has already made strides in cricket by acquiring teams in the Women’s Premier League (WPL) and the UAE’s International League T20. In 2023, Adani secured the WPL’s Ahmedabad franchise with a leading bid of Rs 1,289 crore.
Meanwhile, with assets under management totalling Rs 193 billion, CVC has its fingers in LaLiga, Premiership Rugby, Volleyball World, and the Women’s Tennis Association.
On the revenue front, for the financial year ending March 2023, Irelia Sports recorded a net loss of Rs 429 crore on revenues of Rs 359 crore, with expenditures amounting to Rs 789 crore, the business daily said.
Earlier, Gujarat Titans chief operating officer Arvinder Singh had expressed confidence in achieving profitability in the next media rights cycle, which concludes in 2027. “The original ten franchises took four to five years to become profitable. We are optimistic about not only reaching profitability but also significantly increasing our brand value,” Singh had said in an interview to the business daily.
First Published: Jul 19 2024 | 9:51 AM IS