Goenka: Bold gambit
Calcutta, Dec. 8: RP-Sanjiv Goenka Group, which has acquired the IPL Pune franchisee, plans to cash in on the the popularity of cricket to promote hypermart Spencer's.
"I did not buy a team just for vanity. It makes perfect business sense. I'm looking at a two-year horizon. The benefit to the group will be both tangible and intangible," group chairman Sanjiv Goenka said after the BCCI announced New Rising Promoters Pvt Ltd, a CESC subsidiary, the winner for Pune.
The city-based group, with assets of over Rs 31,000 crore, has several business ventures that include power utility and flagship CESC, Spencer's, music company Saregama, BPO firm Firstsource Solutions and carbon black maker Phillips Carbon Black.
The group is likely to promote the consumer-focused companies, especially Spencer's and Saragema, with the Pune franchisee.
Goenka scotched speculation that the glamour and glitz associated with IPL was one of the reasons behind bidding for Pune. "I was in film production but exited subsequently," he said.
According to him, CESC's association with Atletico De Kolkata, has done "wonders" for the brand. "IPL will be a great way to promote our brands and company and make them visible nationally. Just imagine how much I had to spend to get so much eyeball," Goenka said.
Analysts said Pune had developed into a city with promises where several companies either have large operations or headquarters. There is a possibility that some of them would like to piggyback on the IPL team, bringing moolah for the franchisee.
New Rising will pay Rs 16 crore to the BCCI for the two-year contract. It will have a maximum budget of Rs 66 crore to pick up players in the auction. There will also be operational expenditure to run the team professionally.
CESC itself is well-funded to take on the expenses of the IPL team. It had cash and cash equivalent of Rs 737.74 crore at the end of 2014-15. Reserves and surplus stood at around Rs 7946.70 crore.
Loss-making Spencer's is a CESC subsidiary and there is a possibility that it will go for an IPO in the next two years.