1.UNDER SECRETARY
2.DEPUTY SECRETARY
3.JT SECRETARY
4.ADDNL SECRETARY
5. SECRETARY
6.CABINET SECRETARY
Wednesday, June 25, 2008
Monday, June 23, 2008
Infosys Annual report 2007-08
reading the Infosys annual report is always a great pleasure.. it has that 'feel good factor' from the India Shining campaign..
and 2007-08 report, with the theme Power of Talent does not disappoint on any front..
apart from a 20 pages Management Discussion & Analysis (MDA) which is very unlike the usually seen 20 liner rubbish drafted by most listed companies in India.. and the most elaborate and easy & sensible Director's Report, it also contains non-mandatory parts such as:
- Value Added Statement
- Economic Value Added (EVA)
- Intangibles Scoresheet
- Value Reporting
- Brand Valuation
- Employee strength data of past 10 yrs
- Financial data of past 10 yrs
- Rupee Sensitivity
- Currencywise revenue break-up
- Debtors composition & movement details
- Explanation on STPI Scheme and SEZs
and most imp & thankfully, the financial data is in 'Rs crores' and not 'million' which is used by so many WANNABE companies these days, much to the irritation of indian readers.
some highlights from the report:
- Market cap - 85,000cr apprx
- Revenues - Rs 16,600 crores (4 billion dollars)
- 97% revenues from repeat business
- 70% revenue in US$, 15% in GBP, 5% in Euro
- Total active clients - 550 apprx
- 90% revenue from STPI units, 6% in SEZs
- 52 Global Development Centres (26 in India)
- 11 GDCs in N.America, 9 in Europe
- 40% revenue from Financial Services industry, 22% from Telecom
- Issued capital - 286 crores
- EPS 80
- Cost of Capital - 13.3% apprx
- B/V 250 per share
- Debtors 3,000 cr (apprx 20%)
- 67 days O/s debtors avg
- only 4% revenues taxable in India
- not a single dollar in topline which was not hedged
Tuesday, June 10, 2008
Books!
Alan Greenspan – born 1926. Was inspired by J.P.Morgan, the stabilizing force before the Fed was formed. Studied at School of Commerce, Accounts & Finance at NYU – education factory. Economics was hot topic after WWII. 1944 Bretton Woods to set up IMF and World Bank. John Maynard Keynes. In 1948 opted to work at Conference Board with big offices at Park Avenue near Grand Central Station. The library was the big event with wealth of data on how industries operated- from mining, retail, steel, advertising to foreign trade. Started publishing articles in Business Record. take data and tell a story.
Excess government spending causes inflation – Arthur Burns.
1952 was immersed in economics PhD earning more than $ 6,000 a year more than all his friends.
1953 started Townsend-Greenspan at Broadway, a little south of NYSE after a steady stream of freelance research projects. Was careful not to expand too fast and maintain 40% profit margins.
Aluminium replaced steel as raw material for cans. Study of inventories in Steel in 1957 showed inventories were building rapidly and production was thus above the demand levels. Then came 1958 steel recession. Predicting the steel downturn was first big forecast.
Kennedy announced 1963 $10b tax cut, after CEA told it would stimulate growth. It worked. Townsend-Greenspan did not undertake macro forecasting as it was more an art than science. Vietnam war intrigued Greenspan who had already studied/ worked on Korean war economics. Turned 40 in 1966. Worked on Nixxon’s campaign in 1967. He could listen to a subject for 5 minutes and sound as knowledgable as a professor.
1970 slid into recession. Keynisian economics failed to account for a possibility of stagflation- where unemployment and inflation both rise in tandem. Nixxon resorted to wage and price controls. Market will always undermine any attempts at control. The farmer lobby ensured that raw cotton did not have price ceiling so textile industry was squeezed.
1973 Arab oil imbargo led to 1974 double digit inflation and unemployment was 6%. Watergate. Greenspan was asked to become Chairman of Council of Economic Advisors (CEA) the 3rd most important position in Washington apart from Treasury Sec and Fed chairman. Nixxon resigned. Ford.
In business, inflation creates risk & uncertainty which makes planning more difficult and there is no new hiring bo building of new factories no investing and this growth comes to a standstill.
Recessions are like hurricanes. They range from mild to catastrophic.the worst is where consumers stop spending and businesses stop investing.
To review a policy, always ask : what are the costs to the economy if things go wrong? If the cost is potentially very large, then avoid the policy.
1975 Milton Friedman in Chicago built theory that markets and not central planners are the best allocators of capital & resources.
Greenspan joined boards of companies to learn the economic workings the best being JP Morgan where he learnt the inner workings of international finance. A Saudi billionaire on the board who started his career driving trucks was an even more sponge for information.
Jimmy Carter carried on the deregulation that Ford had started. Deregulation had a lasting impact not just on the economy but also on the Democratic party.
1979 Islamic fundamentalists overthrew the Shah of Iran and began the oil crisis. Brazil had 5000% inflation. The interest rates on 10yr T-notes, best indicators of long term inflation expectations, climbed. Investors started dumping long term bonds and interest rates rose to 11% on 10yr treasury bonds. Paul Volcker decided to focus not on interest rates but money supply. In 1980 interest rates climbed to 20% and unemployment was at 10%. The ecomic misery cost Jimmy Carter the 1980 election.
Recession is when your neighbor loses his job. Depression is when you lose your job. And recovery is when XYZ loses his job!
Ronald Reaganhe Fed consists of 12 banks strategically located around the country, it serves as the window to the American economy as officers are constantly in touch with the bankers and businessmen in their district.
Claims for unemployment benefits are an early indicator that all is not well.
Developing countries typically have a much higher savings rate becoz of lack of social security. The shift in developing markets share in world GDP has created excess capital hence low interest rates.
Inflation in a fiat economy is difficult to suppress. When market value of assets grows faster than nominal GDP growth, there is excess liquidity.
Economists cannot avoid being students of human nature – panic and exuberence
Excess government spending causes inflation – Arthur Burns.
1952 was immersed in economics PhD earning more than $ 6,000 a year more than all his friends.
1953 started Townsend-Greenspan at Broadway, a little south of NYSE after a steady stream of freelance research projects. Was careful not to expand too fast and maintain 40% profit margins.
Aluminium replaced steel as raw material for cans. Study of inventories in Steel in 1957 showed inventories were building rapidly and production was thus above the demand levels. Then came 1958 steel recession. Predicting the steel downturn was first big forecast.
Kennedy announced 1963 $10b tax cut, after CEA told it would stimulate growth. It worked. Townsend-Greenspan did not undertake macro forecasting as it was more an art than science. Vietnam war intrigued Greenspan who had already studied/ worked on Korean war economics. Turned 40 in 1966. Worked on Nixxon’s campaign in 1967. He could listen to a subject for 5 minutes and sound as knowledgable as a professor.
1970 slid into recession. Keynisian economics failed to account for a possibility of stagflation- where unemployment and inflation both rise in tandem. Nixxon resorted to wage and price controls. Market will always undermine any attempts at control. The farmer lobby ensured that raw cotton did not have price ceiling so textile industry was squeezed.
1973 Arab oil imbargo led to 1974 double digit inflation and unemployment was 6%. Watergate. Greenspan was asked to become Chairman of Council of Economic Advisors (CEA) the 3rd most important position in Washington apart from Treasury Sec and Fed chairman. Nixxon resigned. Ford.
In business, inflation creates risk & uncertainty which makes planning more difficult and there is no new hiring bo building of new factories no investing and this growth comes to a standstill.
Recessions are like hurricanes. They range from mild to catastrophic.the worst is where consumers stop spending and businesses stop investing.
To review a policy, always ask : what are the costs to the economy if things go wrong? If the cost is potentially very large, then avoid the policy.
1975 Milton Friedman in Chicago built theory that markets and not central planners are the best allocators of capital & resources.
Greenspan joined boards of companies to learn the economic workings the best being JP Morgan where he learnt the inner workings of international finance. A Saudi billionaire on the board who started his career driving trucks was an even more sponge for information.
Jimmy Carter carried on the deregulation that Ford had started. Deregulation had a lasting impact not just on the economy but also on the Democratic party.
1979 Islamic fundamentalists overthrew the Shah of Iran and began the oil crisis. Brazil had 5000% inflation. The interest rates on 10yr T-notes, best indicators of long term inflation expectations, climbed. Investors started dumping long term bonds and interest rates rose to 11% on 10yr treasury bonds. Paul Volcker decided to focus not on interest rates but money supply. In 1980 interest rates climbed to 20% and unemployment was at 10%. The ecomic misery cost Jimmy Carter the 1980 election.
Recession is when your neighbor loses his job. Depression is when you lose your job. And recovery is when XYZ loses his job!
Ronald Reaganhe Fed consists of 12 banks strategically located around the country, it serves as the window to the American economy as officers are constantly in touch with the bankers and businessmen in their district.
Claims for unemployment benefits are an early indicator that all is not well.
Developing countries typically have a much higher savings rate becoz of lack of social security. The shift in developing markets share in world GDP has created excess capital hence low interest rates.
Inflation in a fiat economy is difficult to suppress. When market value of assets grows faster than nominal GDP growth, there is excess liquidity.
Economists cannot avoid being students of human nature – panic and exuberence
---------------------------------------------------------------------------------------------
The book essentially touches upon all the significant events economic & political & cultural, during the second half of the 20th century.
It beautifully describes the Asian renaissance and the 'March to Modernity'.
Impact of TV, consumer goods and most importantly mobile revolution – farmers & plumbers and vegetable vendors can communicate. Connnectivity is Productivity
Chinese who lived in endless poverty for generations now witness free markets. Chinese are among the most industrious people. Their profound hunger for education to uplift standards of living. Potential change in human life with universal primary education.
Example of Shenzen, a sleepy village in China that became SEZ. GDP grew 126 times @ 30% CAGR for 25 yrs! As compared to Singapore 30 yrs 10% CAGR. China’s GDP grew from $150 billion in 1980 to $2 trillion in 2005 (and that too inspite of a depressed yuan, so it’s infact much higher in PPP terms).
Beyond these numbers, is the Transformation of human spirit. Nike factories have changed the way locals live, from rural toil to financial liberation.
In 2025 China will have 360 million well to do middle-class, equal to entire population of USA. 90% PhD holders will be Asian. Even today, most PhD holders from US universities are from China, India, S.Korea, Japan, Taiwan. Children of peasants are now Wall Street managers. Power of meritocracy as compared to dynastic rules.
A nice example is Ramanujan school of Maths in Bihar which successfully sends poorest kids to IITs.
The advantages of paying civil servants at par with MNCs is seen in Singapore
Very importantly, is the observation that a powerful middle-class will avoid violence because they have comforts & lifestyle. As against Pakistan where the madrassas find it easy to recruit extremists who anyway live a horrible life and have nothing to lose.
However, the book tends to get a wee bit into America bashing mode at times with pages & pages of anti-USA material and references. USA’s monopolist dominance in UN Security Council and IMF. US Dollar hegemony. Petro-dollar scam. Funding of the Marshall plan and inflation ripple effects. How the Soviet Union was out-spent rather than outfought. CIA interference to remove democratically elected leaders and install their puppets etc.
But on the whole, it’s an amazing book, must read!
The madness to watch 2008 NBA Finals to see the LA Lakers battle the Boston Celtics in a Father's Day blowout had tickets quoted at Cost: $112,000 for couple- or $56,000 each!!!; (and you must buy two).
As many as 20 fans a day are plunking down up to $18,000 for a premier seat season package for the right to see the Lakers with three times more premier seats sold than last year. Not even Super Bowl tickets, which can sell for $10,000, can compare.
Brokers attributed the popularity of this year's championship bout to a storied Boston- L.A. rivalry of 11 NBA Finals contests since 1959 - of which the Celtics have won eight. This time they met 21 years after their last NBA Finals meeting in 1987 .
The two seats next to the Lakers bench that listed for $56,000 each - minimum two - were posted on Ticketturbo.com, with other sites selling them for slightly less.
"It's the Lakers-Celtics, the classic of all classics."
But courtside seats now listing from $30,000 to $56,000 have astonished even veterans of the ticket business.
A skybox with 44 seats sells for $50,000.
By comparison, floor seats in Boston cost between $8,000 and $9,000, brokers reported, but without the Hollywood stars.
"I've never seen them this expensive, and I've been in this business for 29 years," said Don Vaccaro, CEO of Ticketnetwork.com, whose inventory includes $1billion in tickets for 71,000 events worldwide. "This is definitely a marquee matchup.
Before the first game in Boston, Harry Rosner, founder of VIP Tickets in Encino in 1981, had already sold two $25,000 courtside tickets.
"There might be somebody who says money is no object, who wants to be seen next to celebrities."
Monday, June 9, 2008
India's Money Monarchs
..was reading a book titled India’s Money Monarchs - Conversations with leading investors by - Chetan Parikh, Navin & Utpal of capitalideasonline.com.
I cannot thank enough, my friend Chaitanya (KPMG) who showed it to me, and his better-half Neha (Deloitte) who gave it to him.. I found the book to be immensely insightful!
Chetan, Navin & Utpal have asked some of the best questions one can think of, and the answers given by the stalwarts are even more amazing..!! (they’ve interviewed some greatest minds on Dalal Street like..
Ramdeo Agarwal
Samir Arora
Rakesh Jhunjhunwala
Chandrakant Sampat
Manish Chokhani
Sanjoy Bhattacharya
Nilesh Shah
Parag Parikh
Prashant Jain
Bharat Shah
I guess it was great fortune to get an opportunity to understand the thought process that goes into these super-great investors !!
A summary of who said what…
RAMDEO AGARWAL
$ The beauty of brokerage business is that you receive your money every settlement
$ I used to sleep reading balance sheets in my apartment in 1980 but I never made any money for the first 15 years
$ The idea could come from a newspaper, or a journal or any media. Basically, I am not averse to exploring any idea !
$ Don’t focus on EPS, focus on RONW
Whole market knows about companies with high ROE. Opportunity lies in identifying companies which have low ROE but because of inherent strength, competitive advantage, ROE can go up substantially.
$ Look at company’s Source of Profit, USP and its sustainability & scalability
$ Profits stability and management quality earns high p/e
$ Sustainable ROE (minus payout) will determine the rate of growth of co.
$ To maintain healthy cash flows in a rapid growth company is Impossible
$ Keep interacting with management regularly
$ Have FOCUS when investing
I trimmed my holding from 225 to 20-25 companies that I can track
Remember that all the stocks in your portfolio will never be at peak. Have patience
$ Bottom-up investing is good but in risk management, top-down helps you a lot. So when software is in euphoria, trim your positions in software counters.
$ Companies that borrow heavily are under tremendous pressure from financial institutions and cannot act as they would ideally want to
$ 10% deviation in estimated and actual results is not a bad management but if MD says results will be out April 15 and no results even by April 25, that’s bad.
CHANDRAKANT SAMPAT
$ The media has all focus on what’s gonna happen in the next one hour or one week.
Focus on business cycles and macro theme changes.
Business cycles are contracting – Railroad – 55 yrs, Elec, Chemica
50 yrs, Petrochem – 40 yrs
$ There is a shift from manufacturing to services. You cannot survive as a manufacturing company. You must become a knowledge company based on good distribution.
$ GDP growth is most important. Over the long run only GDP growth can improve the capital market.
Capital markets are a place for capital allocation not for making momentum gains
$ Cisco and Microsoft had combined market cap of 1 trillion dollars in Feb ’00. And p/e expected a 10 yr CAGR of 50%.
All asset bubble end up with debt problems because majority are leveraged when the market is at the top.
$ Five attributes of good companies:
Management quality
High asset turnover and unallocable capital
competitive advantage period
RONW
Knowing your risk and price to pay for the risk
$ If productivity is there, profits will follow.
But if profits there today but no productivity, that’s a temporary phenomenon.
SAMIR ARORA
$ It’s easy to identify a cheap stock. One needs to identify why it will not be cheap going forward.
$ Markets have a long memory. Past mess is a long run stigma
$ We have seen p/e rerating by a getting good directors
But money is made by not just investing in good management but management that wants to be great.
When Infy fell 60% other small-caps in the sector fell 80%. So selling Infy for high valuations makes sense if u not investing in same sector.
SANJOY BHATTACHARYA
> There is too much plagiarism in the area of valuation. People spend too much time preparing financial models and spreadsheets
The most important valuation tool is not DCF, not PEG not EV/EBIDTA not PSR, but Common Sense.
Just relate earning growth to price you are paying for a business.
If you don’t understand the business and are not having enough depth, then no valuation tool is going to work for you
Everyone is looking at facts and public data in the same manner. And if you look at the same facts in the same manner, then you cannot beat the market.
Market can never beat market !
By reading a lot and speaking to people who have great depth in particular area helps streamline your thought process.
my routine in CRISIL was to read balance sheets and meet managements. Speaking to them firsthand was the greatest education
> Risk is going what you don’t know
> It pays most to identify a theme before most others, not any other
> When you sell, leave a lot on table for the next guy
> The only good book I read on the Art of Selling is When to Sell by Justin Mamis
Judgement under Uncertainty is best book you can get on Behavorial Finance
SUKUMAR RAJAH (Franklin Templeton)
$ It is the quality of the lower level people, their feeling that they are an integral part of the company, they are also shareowners and they will gain substaintially from the quality of products that they deliver
$ Narayana Murthy once said, “..the Ships are in safe harbour but that’s not where they belong”
Chetan, Navin & Utpal have asked some of the best questions one can think of, and the answers given by the stalwarts are even more amazing..!! (they’ve interviewed some greatest minds on Dalal Street like..
Ramdeo Agarwal
Samir Arora
Rakesh Jhunjhunwala
Chandrakant Sampat
Manish Chokhani
Sanjoy Bhattacharya
Nilesh Shah
Parag Parikh
Prashant Jain
Bharat Shah
I guess it was great fortune to get an opportunity to understand the thought process that goes into these super-great investors !!
A summary of who said what…
RAMDEO AGARWAL
$ The beauty of brokerage business is that you receive your money every settlement
$ I used to sleep reading balance sheets in my apartment in 1980 but I never made any money for the first 15 years
$ The idea could come from a newspaper, or a journal or any media. Basically, I am not averse to exploring any idea !
$ Don’t focus on EPS, focus on RONW
Whole market knows about companies with high ROE. Opportunity lies in identifying companies which have low ROE but because of inherent strength, competitive advantage, ROE can go up substantially.
$ Look at company’s Source of Profit, USP and its sustainability & scalability
$ Profits stability and management quality earns high p/e
$ Sustainable ROE (minus payout) will determine the rate of growth of co.
$ To maintain healthy cash flows in a rapid growth company is Impossible
$ Keep interacting with management regularly
$ Have FOCUS when investing
I trimmed my holding from 225 to 20-25 companies that I can track
Remember that all the stocks in your portfolio will never be at peak. Have patience
$ Bottom-up investing is good but in risk management, top-down helps you a lot. So when software is in euphoria, trim your positions in software counters.
$ Companies that borrow heavily are under tremendous pressure from financial institutions and cannot act as they would ideally want to
$ 10% deviation in estimated and actual results is not a bad management but if MD says results will be out April 15 and no results even by April 25, that’s bad.
CHANDRAKANT SAMPAT
$ The media has all focus on what’s gonna happen in the next one hour or one week.
Focus on business cycles and macro theme changes.
Business cycles are contracting – Railroad – 55 yrs, Elec, Chemica
50 yrs, Petrochem – 40 yrs
$ There is a shift from manufacturing to services. You cannot survive as a manufacturing company. You must become a knowledge company based on good distribution.
$ GDP growth is most important. Over the long run only GDP growth can improve the capital market.
Capital markets are a place for capital allocation not for making momentum gains
$ Cisco and Microsoft had combined market cap of 1 trillion dollars in Feb ’00. And p/e expected a 10 yr CAGR of 50%.
All asset bubble end up with debt problems because majority are leveraged when the market is at the top.
$ Five attributes of good companies:
Management quality
High asset turnover and unallocable capital
competitive advantage period
RONW
Knowing your risk and price to pay for the risk
$ If productivity is there, profits will follow.
But if profits there today but no productivity, that’s a temporary phenomenon.
SAMIR ARORA
$ It’s easy to identify a cheap stock. One needs to identify why it will not be cheap going forward.
$ Markets have a long memory. Past mess is a long run stigma
$ We have seen p/e rerating by a getting good directors
But money is made by not just investing in good management but management that wants to be great.
When Infy fell 60% other small-caps in the sector fell 80%. So selling Infy for high valuations makes sense if u not investing in same sector.
SANJOY BHATTACHARYA
> There is too much plagiarism in the area of valuation. People spend too much time preparing financial models and spreadsheets
The most important valuation tool is not DCF, not PEG not EV/EBIDTA not PSR, but Common Sense.
Just relate earning growth to price you are paying for a business.
If you don’t understand the business and are not having enough depth, then no valuation tool is going to work for you
Everyone is looking at facts and public data in the same manner. And if you look at the same facts in the same manner, then you cannot beat the market.
Market can never beat market !
By reading a lot and speaking to people who have great depth in particular area helps streamline your thought process.
my routine in CRISIL was to read balance sheets and meet managements. Speaking to them firsthand was the greatest education
> Risk is going what you don’t know
> It pays most to identify a theme before most others, not any other
> When you sell, leave a lot on table for the next guy
> The only good book I read on the Art of Selling is When to Sell by Justin Mamis
Judgement under Uncertainty is best book you can get on Behavorial Finance
SUKUMAR RAJAH (Franklin Templeton)
$ It is the quality of the lower level people, their feeling that they are an integral part of the company, they are also shareowners and they will gain substaintially from the quality of products that they deliver
$ Narayana Murthy once said, “..the Ships are in safe harbour but that’s not where they belong”
Sunday, June 1, 2008
world indices.. sub prime impact ! (except BRAZIL)
was looking at the world markets randomly last 52-week data
at not surprisingly, it's been the same sad story Everywhere !!
the ASX200 (Australia)
Nikkei (Japan)
FTSE100 (London)
Dow, S&P500 (US)
all charts look the same..
but one chart which had a different story to tell was the BOVESPA (Brazil)
i guess i'll try figure out how Brazil has managed to Decouple from global cues...
u got any clue ???
at not surprisingly, it's been the same sad story Everywhere !!
the ASX200 (Australia)
Nikkei (Japan)
FTSE100 (London)
Dow, S&P500 (US)
all charts look the same..
but one chart which had a different story to tell was the BOVESPA (Brazil)
i guess i'll try figure out how Brazil has managed to Decouple from global cues...
u got any clue ???
IPL
was browsing thru a report by arnab mitra of IIFL on INDIA PREMIER LEAGUE.
The IPL got off to a flying start, with the first few matches recording an average TRP of 8.2. Though ratings have dropped since then, they remain at above 5—higher than any other programme running on TV.
Ad rates for 10-second spots, which were Rs200,000 at the start of the tournament
have climbed rapidly, to Rs500,000 now.
Sony Set Max’s revenue market share has reportedly gone up from the pre-IPL 5.7% to 28.8%
Money Game
Broadcasting fee for a period of 10 years is Rs 4,000 crores of which, Rs 500 cr to be spent on promoting IPL by
Sony, and Rs 3,500 crores would be paid directly to BCCI.
Sony will earn revenues from selling ad slots (10 second slot at Rs 2 lac to 5 lac)
The 1st season will have apprx 13,000 10-second slots.
Title sponsor DLF will pay Rs 40 cr in Year 1
The other central sponsors (Hero Honda, Pepsi, Citi, Vodafone,Kingfisher) have been tied up for a five-year period at approximately
Rs 80 crores a year.
The broadcasting fee of Rs 350 crores each year will be shared as follows:
Year 1 to 3: BCCI (20%): Teams (80%)
Year 4 to 5: (30%) (70%)
To obtain franchisee rights, the owners of teams had to pay:
Mumbai (Reliance) - 450 crores
Banglore (UB Group) - 450 crores
Hydrabad (Deccan Chronicle) - 425 crores
Chennnai (India Cements ) - 360 crores
Delhi (GMR Group) - 350 crores
Mohali (Ness Wadia group) - 300 crores
Kolkata (Red Chillies) - 300 crores
Jaipur (Emerging Media) - 250 crores
This amount will be payable over 10 years.
Plus, the franchisee owners had to bid for players.
Total cap was Rs 20 crores per team per year.
Gate ticket sales Rs 1000 per ticket apprx. for a 50,000 tickets a match is Rs 5 cr per match! This will go to the team owners.
Jaipur & Kolkata teams are only 2 teams expected to break even and make profits in Year 1 itself (apprx. 12 cr)
BCCI will be making a guaranteed profits of 350 crores from Year 1.
The IPL got off to a flying start, with the first few matches recording an average TRP of 8.2. Though ratings have dropped since then, they remain at above 5—higher than any other programme running on TV.
Ad rates for 10-second spots, which were Rs200,000 at the start of the tournament
have climbed rapidly, to Rs500,000 now.
Sony Set Max’s revenue market share has reportedly gone up from the pre-IPL 5.7% to 28.8%
Money Game
Broadcasting fee for a period of 10 years is Rs 4,000 crores of which, Rs 500 cr to be spent on promoting IPL by
Sony, and Rs 3,500 crores would be paid directly to BCCI.
Sony will earn revenues from selling ad slots (10 second slot at Rs 2 lac to 5 lac)
The 1st season will have apprx 13,000 10-second slots.
Title sponsor DLF will pay Rs 40 cr in Year 1
The other central sponsors (Hero Honda, Pepsi, Citi, Vodafone,Kingfisher) have been tied up for a five-year period at approximately
Rs 80 crores a year.
The broadcasting fee of Rs 350 crores each year will be shared as follows:
Year 1 to 3: BCCI (20%): Teams (80%)
Year 4 to 5: (30%) (70%)
To obtain franchisee rights, the owners of teams had to pay:
Mumbai (Reliance) - 450 crores
Banglore (UB Group) - 450 crores
Hydrabad (Deccan Chronicle) - 425 crores
Chennnai (India Cements ) - 360 crores
Delhi (GMR Group) - 350 crores
Mohali (Ness Wadia group) - 300 crores
Kolkata (Red Chillies) - 300 crores
Jaipur (Emerging Media) - 250 crores
This amount will be payable over 10 years.
Plus, the franchisee owners had to bid for players.
Total cap was Rs 20 crores per team per year.
Gate ticket sales Rs 1000 per ticket apprx. for a 50,000 tickets a match is Rs 5 cr per match! This will go to the team owners.
Jaipur & Kolkata teams are only 2 teams expected to break even and make profits in Year 1 itself (apprx. 12 cr)
BCCI will be making a guaranteed profits of 350 crores from Year 1.
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