Promoters of the Rajasthan Royals cricket team, champions of the inaugural Indian Premier League, are considering a private placement and a subsequent public issue to raise funds and capitalise on their success in having acquired a winning team at the cheapest valuation among all bidders.
Sources said the UK-based Emerging Media, the company that owns the Rajasthan Royals, is keenly looking at the option of monetising the value and strong brand of the franchise.
"The shareholders are keen to conclude something soon. They are looking for funding, and given the success it enjoyed, it should not be difficult to do this," they added.
The promoters want to raise funds to finance the acquisition of new players and repay debt raised last year to build the team, sources added.
The company is expected to be valued at over Rs 1,000 crore (upwards of $200 million) and the promoters may divest around 10 per cent to private equity funds. Emerging Media is in the process of appointing an investment banker for the deal.
"The private placement would be a precursor to an initial offer that is planned in the second quarter of 2009, coinciding with next year's IPL tournament. The listing will also depend on market sentiment. Hopefully, things will be better on the stock market next March-April," sources said.
Manoj Badale is the chairman of Emerging Media, and Fraser Castellino the chief executive. Ravi Krishnan is the vice-chairman of the IPL-Jaipur franchise. Castellino could not be reached for comment.
Among the key shareholders is Lachlan Murdoch, son of media baron Rupert Murdoch, and other high net worth Indians. This is Lachlan's second investment in India through his closely held investment firm -- Illyra -- named after an island that he once sailed around. Illyra is headquartered in Sydney, Australia.
In January this year, Rajasthan Royals, the only foreign-owned team among the eight IPL franchisees, committed to pay a franchise fee of $67 million, the lowest among all the DLF Indian Premier League teams. Captained by Australian bowling legend Shane Warne, the Royals went on to win the tournament.
It is also believed to be the only team that is in the black -- first-year expenses were estimated at $20 million and revenues are in the same range, sources added.
A successful deal by Emerging Media would set the ball rolling for the other IPL franchisees to monetise their value and raise funds to buy players.
