As per the group’s calculations for the franchise bid, it expects to get around Rs 400 crore a year from the BCCI for the first five years.
Unlisted entities backed by the personal wealth of Sanjiv Goenka and listed entity, RPSG Ventures, will power the Indian Premier League (IPL) franchise of Lucknow.
In an exchange filing late on Monday, RPSG Ventures informed that it had been declared as one of the successful contenders at the bidding process conducted by the Board of Control for Cricket in India (BCCI).
As per the terms of the bid and the Invitation to Tender (ITT), the Lucknow Franchise of the IPL at Bharat Ratna Shri Atal Bihari Vajpayee Ekana Cricket Stadium will be owned and operated by the company along with private/unlisted firms of the RP-SG Group, through a newly incorporated entity, RPSG Ventures’ notice to the stock exchange read.
RPSG Group’s winning bid, at a staggering Rs 7,090 crore, would be spread over 10 years.
The gross payment for the new franchise is Rs 709 crore per year, payable for a period of 10 years in accordance with the terms of the ITT.
The new franchise shall be entitled to receive share of the central rights income as per relevant rules of BCCI, the notice said.
The RPSG Ventures stock on Tuesday closed at Rs 797.20 on the Bombay Stock Exchange (BSE), down 5.73 per cent. RPSG Ventures is the only listed entity in the group involved in the IPL bid.
However, sources close to the RPSG group indicated that in the first year, the outgo from RPSG Ventures could be around Rs 150-200 crore.
This will come down after the first year, sources added.
RPSG Ventures recorded a consolidated income of Rs 5,663 crore in 2020-2021; profit before tax was at Rs 294.4 crore and profit after tax Rs 58.4 crore.
Its most significant subsidiary is Firstsource Solutions.
The company's other key subsidiaries include: Guiltfree Industries Limited which, along with its step-down subsidiary Apricot Foods Private Limited, operates in the packaged snacks segment; Quest Properties India Limited, which manages a luxury shopping mall; APA Services Limited, which through its subsidiaries, operates and manages the iconic football club ATK Mohun Bagan and a table tennis franchisee RPSG Mavericks.
As on March 31, 2021, RPSG Ventures had 30 subsidiaries, according to its annual report.
However, sources said that as per the group’s calculations for the franchise bid, it expects to get around Rs 400 crore a year from the BCCI for the first five years.
“After 5 years, this will increase. Then there will be sponsorships, ticket sales and merchandise," they added.
At some point, there could also be dilution of some stake, they further said.
Photograph: Courtesy BCCI