Tiger Global in talks to invest in Rajasthan Royals, valuing it at $650M

The New York-headquartered firm is looking to invest around $40 million in Rajasthan Royals at a $650 million valuation, according to people in the know who said the deal is nearly complete. This will mark a significant deepening of Tiger Global’s foray into India’s sporting economy and an expansion beyond the digital commerce sector where it is best known as an early backer of ecommerce giant Flipkart. “The capital infusion could be a direct or an indirect one, wherein Tiger may back one of the shareholders in Rajasthan Royals…,” said another person who is close to the matter.

Rajasthan Royals’ parent entity Emerging Media is owned by UK-based Manoj Badale who holds more than 60% in the franchise and had bagged the rights in 2008.

“Tiger has been scouting for opportunities in the IPL,” said one person familiar with the deal talks on condition of anonymity.

“It has held discussions with a few other franchises…the transaction with Rajasthan Royals is yet to close but it should close soon,” the person said.

In 2021, US-based RedBird Capital, which invests heavily in professional sports clubs and assets, picked up shares in a secondary deal valuing the Royals at more than $250 million, the Financial Times reported two years ago. The firm holds stakes in US baseball team Boston Red Sox and English Premier League football club Liverpool as well.

When contacted by ET, Ranjit Barthakur, executive chairperson, Rajasthan Royals said, “There is no transaction in RMPL (Royal Multisport Pvt Ltd) India and we are not aware of any other transaction.” A Tiger Global spokesperson said they did not have a comment to offer.Tiger’s Non-tech Portfolio

Tiger, which entered India almost 15 years ago, has a huge presence locally. Its top internet bets include the likes of Flipkart, Ola, Zomato, Delhivery, among others.

ETtech

In the sports economy, Tiger holds a stake in online fantasy gaming major Dream Sports, which runs Dream 11. It has also made investments in quick-service restaurant chain Wow! Momo and tea chain Chaayos, moving away from its core technology bets.

While institutional funds have been big backers of sporting leagues (football, baseball, basketball) across the US, UK and Europe, in India the trend is just picking up. In 2021, UK-based CVC Capital Partners became the first private equity firm to buy an IPL team, bagging the rights to operate the Ahmedabad-based franchise Gujarat Titans with a bid of Rs 5,625 crore.

“This is an opportunistic move from Tiger and not much to do with the massive correction they’ve seen in their tech portfolio globally,” said another person privy to the deal talks.

Tiger has faced severe losses as the value of its unlisted holdings nosedived more than 50%, the Financial Times reported, adding that it marked down its private portfolio by nearly 20%. Technology stocks have been battered since the end of 2021, after a year of unprecedented boom in funding and IPOs for the sector. In India, Tiger has been liquidating its positions in publicly held companies like Zomato, Delhivery, Policybazaar and Freshworks. ET reported on January 26 that the fund was in talks to sell its remaining 4% shareholding in Flipkart for over $1 billion to the ecommerce major’s parent Walmart.

IPL’s Valuation Bump-up

The IPL franchise was valued at $10.9 billion in 2022, per a report by consulting firm D and P Advisory. This is a 75% growth in dollar terms since 2020 when it was valued at $6.2 billion, said the report. In rupee terms, the growth is 90%, per D and P Advisory, as ET reported on December 21, 2022.

ETtech

The consulting firm used discounted cash flow (DCF) method for valuation in a report titled ‘Beyond 22 Yards’. The big spike in IPL valuation is on the back of a $6.2-billion media rights deal inked by the Board of Control for Cricket in India (BCCI) last year and the auction of two new teams — Gujarat Titans and Lucknow Super Giants — for a combined value of $1.6 billion subsequently. While Disney Star had bagged the IPL television rights for Rs 23,575 crore, Viacom18 acquired the digital rights for Rs 23,758 crore, for a five-year period, it was the first time when the media rights were sold separately for the two mediums.