IPL Auction Postponed

For all those who think IPL boss Lalit Modi needs a few tips on staying grounded (and there are plenty in Hyderabad of those, after the matches scheduled for the city got relocated), the IPL auction for 2 new teams scheduled for March 7th was manna.

Everyone thought the terms for the much-awaited auction were too steep, and it turns out that they indeed were. The auction had to be postponed after only 3 parties submitted bids for the new teams, which resulted in the IPL committee returning the bids without opening them.

The auction for today was for 2 new teams (centred around 2 new cities) out of the 12 new city names put up on sale. In contention primarily were Ahmedabad, Pune and Nagpur. And the terms to qualify for bidding were steep indeed.

For example, only groups with a net worth of $1 billion (i. e. Rs. 4,500+ crores) were proposed to be allowed, and the bidders had to provide a bank guarantee of $100m to just participate in the bidding process. Needless to say, these are the two clauses dropped for the new bidding scheduled for March 21st, 2010.

Instead, Modi has now set a new condition that a $10 million advance performance deposit would be submitted 24 hours in advance - i. e. by March 20. The successful bidders would also need to be ready to pay 10% of the amount that they bid, within 48 hours of being awarded the franchise.

Another clause was that the base price of each team would be $225m (it was $50m in the first tender process in Jan 2008), which, as of now, Modi is sticking to. To give you an idea, the highest cost of a team in Jan 2008 was about $100m (RIL bought Mumbai Indians for Rs. 447.6 crores), and the lowest was$60m (for which Emerging Media bought Rajasthan Royals). Deccan Chronicle bought the Deccan Chargers for Rs. 428 crores ($95m approx).

Among the people who landed up at the auction today and returned empty-handed thanks to no bidding at all, were Saif Ali Khan and Kareena Kapoor who teamed up with Videocon. Gautam Adani of Adani Enterprises (whose MD Rajesh Adani, Gautam's youngest brother, was arrested in late-February by the Goa CBI for customs duty evasion) was also present.