Rajasthan Royals to have a five-fold increase in their overall valuation

Rajasthan Royals are all set to have a five-fold increase in their overall valuation with a proposed internal transfer of shares. Emerging Media (IPL) Ltd., which is currently the second-highest stakeholder in the franchise, has proposed to increase its stake by 13.4%.

The overall valuation of the franchise will rise to Rs.1,418 crore once this transaction goes through. This will be a five-fold increase in comparison to the value at which the franchise was bought in 2008 (Rs.268 crore).

Times of India quoted the owner of Emerging Media (IPL) Ltd as saying that “a few high net-worth individuals” have come together to pool in cash for this transaction.

The 13.4% stake will be bought from Kelowna Investment Ltd., which is a Nigeria-based company run by Indian businessman Suresh Chellaram. Kelowna Investment Ltd., is currently the majority stakeholder in Rajasthan Royals with 50% share. With the proposed share transfer going through, Emerging Media (IPL) Ltd., will replace it as the majority stakeholder by expanding the stake to 50.1%.

The parent company of Rajasthan Royals, Emerging Media Sporting Holding, has made an official proposal to the BCCI for the internal transfer of shares. The deal is yet to be ratified by the apex body.

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Rajasthan Royals will have to pay 5% of the transaction amount to BCCI

Clause 10.4 of the agreement between the franchise and BCCI specifies that “the franchise has to pay 5% transaction value of the sales upon consummation to BCCI.”

According to this clause, BCCI will be earning an amount of Rs.10 crore once they ratify this sale transaction. With the grim picture of revenue due to the COVID pandemic, this will indeed be welcomed by the cricketing body.

BCCI will be floating fresh tenders for two more franchises next year to be inducted into the Indian Premier League.

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