Bangalore: Kerala’s largest financial services firm, the Muthoot Pappachan Group, may be working to join the Indian Premier League (IPL), the Twenty20 cricket format that is proving to be a potent cocktail of sports and entertainment.
Muthoot Pappachan—with interests also in hospitality, real estate and education—is leading a group of investors and cinema personalities such as director Priyadarshan and actor Mohanlal to bid for one of two new franchises to be added to IPL in 2011, said people familiar with the situation.
A price of $225 million (around Rs1,050 crore) per franchise has been set as the minimum bid price for the new franchises. The people cited above, who spoke on condition of anonymity, said some investors from West Asia would partner the Muthoot Group in bidding for a franchise. Responding to an email query sent by VCCircle, Muthoot Group director Thomas George Muthoot said: “It’s too premature to talk on the subject now.”
One person familiar with the development said the Muthoot Group was in the process of creating a new entity to make the pitch to enter IPL. Priyadarshan and Mohanlal may take a 10-15% stake each in the venture, in which Muthoot Group will hold a substantial stake along with some investors from West Asia. The consortium may earmark up to Rs1,400 crore to be spent on the IPL team, if it wins the bid, over the next two-three years.
The bidding process for the two new teams, which will take the number of sides competing in the tournament to 10 next year, is expected to begin before the third edition of IPL starts in March. Bidders will need to specify their venue preferences. The venues with the two highest bids will be chosen. The minimum bid price has more than quadrupled from the $50 million set in the initial auction two years ago, increasing valuations across the board.