IPL Kochi Franchise Looking to Offload Stakes

July 5, 2011

According to a report in Gulf News, the owners of the Kochi Franchise have been in talks with a number of potential buyers to offload some of their stakes. The franchise was bought at a whopping sum of US$333m.

Anchor Group chairman Mehul Shah and the majority shareholder in the franchise told the UAE daily. “We are still taking stock of the entire scenario and cannot comment on it. If something happens, it will be a business decision.” 

Kochi is not the only franchise that is looking at a strategic stake offload. The Pune franchise, which was bought by Sahara Group for $370m, is looking at diltuing some stake.

At the time the purchases of the two franchises were ground-breaking however reality has dawned on both franchise owners that to break-even on investment within 10 years will be herculean task. The 20% drop in ratings of the IPL this season and increasing costs of running the franchise is a major factor in the offload of stakes.

“As per the economics of IPL, each franchise should be ready to take into their stride losses of around Rs 1-1.3 billion annually for the first four to five years. This can be quite taxing for the present shareholders,” revealed one of the highly placed sources in the team.