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India Cements not to dilute equity in Chennai Super Kings
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NEW DELHI: India Cements, the owner of team franchise Chennai Super Kings (CSK), has no plans to demerge its IPL property and dilute equity in the venture.

"We are not raising money for the IPL venture. We continue to hold CSK under India Cements. That is the plan for now," India Cements VP-Marketing Rakesh Singh tells Indiantelevision.com.

IPL team owners have been reluctant to offload stake at low valuations. Deccan Chronicle Group, which owns Deccan Chargers, has given the mandate to KPMG to raise money but has kept it on hold as the market has been hit by a global recession. Out of the eight team franchise owners, only Rajasthan Royals has raised Rs 820 million by diluting 11.7 per cent to Shilpa Shetty and UK-based businessman Raj Kundra, pegging the valuation at Rs 6.83 billion.

Despite a downturn in the economy, India Cements has not reduced its sponsorship rates and is expecting a substantial jump in revenues as it has lined up a bevy of 13 sponsors for the second edition of the Indian Premier League (IPL). A year ago, India Cements had six sponsors.

The 2009 roster includes Pepsi’s two brands 7Up and Lays, Aircel, Reebok, Peter England, Nivea, Wrigley’s, Johnson & Johnson, Big Bazaar, Camlin, Cloud9, NowPow (Hyderabad-based mobile Vas compay), Fosters and makemytrip.

Says India Cements VP-Marketing Rakesh Singh, “With a captain like Mahindra Singh Dhoni and our performance last year, sponsorship rates have not reduced for us this year. We have, on the other hand, increased the portfolio of our sponsors this year. Every sponsor looks for the right combination and we have been successful in providing that.”

India Cements will launch co-branded merchandise and goods with the sponsors. Pepsi, for instance, will introduce cans with CSK logo.

Despite the IPL shifting the matches to South Africa, CSK feels there will be a merchandising opportunity. “Chennai Super Kings followers in India will miss the chance of supporting the team in the stadium. The next best option available for them is to buy the team T-shirt, wear it and cheer the team in front of their TV sets. If you look at the way the merchandise of Manchester United gets sold, the pattern is very similar. While Manchester United plays in its stadium in England, maximum of its merchandise is purchased by the team’s fans based out of Singapore and Hong Kong,” adds Singh.

The expenditure towards advertising and marketing will also fall. Says Singh, “The cost of publicity and promotion like advertising, on ground promotion and also the cost of flying cheer leaders to South Africa does not exist any more as IPL will be managing that centrally.”

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