Kolkata: Investors hammered RP Sanjiv Goenka Group company RPSG Ventures after the group announced ownership of the Indian Premier League’s Lucknow franchise, as the firm’s share price crashed 5.73 per cent to Rs 797.25 per share at BSE at end of the trade Tuesday.
Goenka’s RPSG Group claimed the Lucknow franchise for a whopping Rs 7,090 crore, higher by about 40 per cent over the closest bidder, Monday.
Shares of RPSG Ventures opened on a bullish note at Rs 892 per share Tuesday but soon it began to lose ground. The stock touched a low of Rs 785 before settling at Rs 797.25 a share.
“Investors became wary about RPSG Ventures foray into high profile sports and the annual outgo of Rs 709 crore per year for the next 10 years,” said S Thirani, director of brokerage firm Thirani Securities.
There had been instances in the past where profitable listed entities had gone burst after venturing into IPL, he said.
Informing the bourses about the development, RPSG Ventures said, “The company has been declared to be one of the successful bidders at the bidding process conducted by the BCCI at Dubai. As per the terms of the bid and ITT, the Lucknow Franchise of the IPL at Bharat Ratna Shri Atal Bihari Vajpayee Ekana Cricket Stadium shall be owned and operated by the Company along with private/unlisted companies of RPSG Group, through a newly incorporated company.
“The gross payment for the new franchise is Rs 709 crore per year, payable for a period of 10 years…. The new franchise shall be entitled to receive a share of the Central Rights income as per relevant rules of BCCI.”
The RPSG Group has not responded to the queries sought by PTI.
RPSG Ventures is an early-stage consumer venture capital fund focused on investing in the B2C ecosystem ranging from food & beverages, personal care and lifestyle goods & services. Consolidated revenue for FY21 was Rs 5,599 crore.
PTI
