The base price of $225 million is still a dampener for prospective bidders who have picked up the tender document for bidding for the franchises of two new teams for the fourth season of the Indian Premier League (IPL).
“Not more than six investors are expected to place their bids for the new teams,” a BCCI source told Business Standard.
The minimum bid price ($225 million) is almost double the figure of the most expensive IPL team — the Mumbai Indians — owned by Mukesh Ambani, who had paid $111.9 million in 2008. There were 16 bidders for the 8 franchises in the first season.
According to sources, Videocon, Jaypee Associates, Sahara, Adani Group and a conglomerate in the construction business from Pune will be placing bids. IPL will be accepting the bids for the two new teams on March 21 at 10 am. The bids will be opened and the winner will be declared at 11 am on the same day.
IPL had invited bids for the franchises for two new teams in February and was supposed to declare the winners on March 7, however, it had to modify its tender norms after it suffered a setback receiving only two bids for the two teams on offer. Most of the prospective bidders who had bought the ITT had raised concerns on the stiff financial terms of the earlier tender.
IPL later made three major changes in the new tender: the $100 million (Rs 460 crore) performance guarantee as stipulated in the first ITT was brought down to $10 million (Rs 46 crore). The amount should be submitted 24 hours before the bid. The winning bidder will have to submit a bank guarantee, which will be 10 per cent of the bid amount, within 48 hours of winning a franchise. In the earlier tender it was 100 per cent of the bid amount.
The most important change was the withdrawal of the networth clause. In the earlier tender it was $1 billion (Rs 4,600 crore). “Essentially, we have gone back to 2008 when bidding for the existing franchises was held. But, since the values have gone up, the performance guarantee has also gone up from $5 million to $10 million,” IPL commissioner Lalit Modi had said.