CVC Eyes Gujarat Titans Sale: Adani & Torrent in Talks
Mumbai: Private equity firm CVC Capital Partners is negotiating with Adani Group and Torrent Group to sell a controlling stake in the Indian Premier League (IPL) franchise, Gujarat Titans, sources have revealed to ET.
CVC’s Selling Strategy
CVC aims to offload a majority stake in the Gujarat Titans while retaining a minority holding. The Board of Control for Cricket in India’s (BCCI’s) lock-in period, preventing new teams from selling stakes, will end in February 2025. This opens up a window for potential buyers to acquire the franchise.
Valuation and Historical Context
The Gujarat Titans, a three-year-old franchise, are expected to be valued between $1 billion and $1.5 billion. CVC initially purchased the team in 2021 for ₹5,625 crore (approximately $745 million at the then-exchange rate). The US investment bank Houlihan Lokey recently valued the entire IPL at $16.4 billion, bolstered by a record-breaking $6 billion media rights deal signed with Disney Star and Viacom18 in 2022.
Competitive Bidding from Adani and Torrent
Both Adani and Torrent, based in Ahmedabad, are aggressively pursuing the majority stake in Gujarat Titans. They had previously missed out on acquiring the IPL’s Ahmedabad franchise in 2021. “For CVC, it’s a great opportunity to monetize its stake in the franchise,” commented an insider.
Adani’s Cricket Investments
Unlike Torrent, Adani has already invested in cricket, owning teams in the Women’s Premier League (WPL) and the UAE-based International League T20. In 2023, Adani acquired the WPL’s Ahmedabad franchise with a top bid of ₹1,289 crore.
CVC’s Broader Sports Investments
CVC, managing ₹193 billion in assets, is a significant backer of sports, with investments in LaLiga, Premiership Rugby, Volleyball World, and the Women’s Tennis Association.
Gujarat Titans’ Financial Performance
Despite their initial success, winning the IPL title in their debut season, the Gujarat Titans have faced financial challenges. For the fiscal year ending March 2023, Irelia Sports, the CVC-owned entity, reported a net loss of ₹429 crore on revenue of ₹359 crore, with expenditures totaling ₹789 crore.
Future Profitability Prospects
Gujarat Titans COO Arvinder Singh remains optimistic, predicting profitability in the next media rights cycle ending in 2027. He stated, “Even the original ten franchisees took four to five years before they turned profitable. We are confident that not only will we turn profitable, but our brand value will also increase exponentially.”
Brand Value Rankings
According to Houlihan Lokey, the Gujarat Titans currently hold a brand value of $124 million, ranking eighth among IPL franchises. The Chennai Super Kings lead the pack with a brand value of $231 million.
In conclusion, the impending sale of the Gujarat Titans presents a lucrative opportunity for both CVC and potential buyers, with significant interest from prominent bidders Adani and Torrent. The outcome of this sale could reshape the financial landscape of the IPL franchise.(online casino games)