Manoj Badale, co-founder and managing partner of the UK-based venture capital group Blenheim Chalcot, is acquiring majority stake in Rajasthan Royals, the team that won the first edition of the Indian Premier League (IPL) in 2008 but ended up in the bottom half of chart in this year’s edition of the domestic 20-20 cricket tournament.

Badale promoted Emerging Media (IPL) is picking 50.3% stake direct stake in Jaipur IPL Cricket, the company which has the franchise for the Rajasthan Royals team. Currently, it is wholly-owned by Mauritius-based EM Sporting Holdings (ESH).

Although, the team was perceived to be largely owned by Badale, he was a minority partner in the Mauritius holding company. Nigeria-based NRI family Chellarams holds 44.1% in this venture and is the single largest shareholder.

Emerging Media (IPL), promoted by Badale, owns 32.4% in this holding company while the rest 23.5% is equally split between Blue Water Estate, representing Lachlan Murdoch and Kuki Investments, which is promoted by UK-based Kundra family and is also believed to represent investments of Bollywood actress Shilpa Shetty.

Post this transaction, Emerging Media (IPL) will own 50.3% direct stake in the cricket team besides an indirect stake of around 16% through the Mauritius joint venture.

Badale will be issued fresh shares against the initial investment made by the venture. As per the deal, the Rajasthan Royals franchise owners had to pay BCCI $67 million in ten equal instalments of $6.7 million. Emerging Media (IPL) had paid $5.05 million as earnest money for the bid to get the team franchise. This earnest money was to be adjusted with the first instalment of $6.7 million to be paid to BCCI. The remaining $1.65 million was paid by the Mauritius joint venture, partly through a wholly-owned unit.

Emerging Media (IPL) is now getting direct stake in the Jaipur IPL Cricket through fresh issue of shares against the original earnest money it had paid to BCCI. The Mauritius joint venture is also being issued fresh shares for the money it brought in for the first instalment of payment. After this transaction, Badale would become the largest shareholder of the team.

Chellaram’s indirect stake in the venture would whittle down to around 22% while Lachlan Murdoch and Kundra-Shetty would own about 5.5% each.

But the deal which values the team at just about Rs 40 crore does not reflect the actual valuation of the firm.  As per UK-based independent brand valuation consultancy Brand Finance, Rajasthan Royals brand itself is estimated to be worth $39.5 million, third most valued behind Kolkata Knight Riders and Mumbai Indians.

Badale appears to be acquiring additional stake in the team at the original valuation. The actual value of the team has moved up much higher since then. Early this year the team was reportedly worth $140 million.

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