The IPL Guide to the Indian Markets

25 03 2010

 

The Indian Premier League (IPL) recently awarded franchises for two new centres, Pune and Kochi from 2011 onwards. The Pune franchise has gone to the Subrata Roy led Sahara Group. The Kochi franchise has gone to a little known group which goes by the name Rendezvous Sports. The amounts paid by the 2 team owners are staggering and is 25% higher than the amount  paid by the all the eight teams put together in the first auction.

It is interesting to see the cities chosen for the second round of auctions, Ahmedabad, Pune, Nagpur and Kochi. Bidding the same amounts for Ahmedabad, Nagpur  and Pune, the Sahara team chose Pune.

Pune is the second city in Maharashtra to have an IPL franchise. It is very close to Mumbai, which already has an IPL team. Mumbai being a commercially important city, it can as well have a second franchise. Already Mumbai is hosting IPL matches in two stadia, Brabourne and D.Y.Patil. Pune is like the second franchise for Mumbai, much like Manchester City and Manchester United in EPL. Subrata Roy has mentioned that the Amby Valley being close to Pune has made them chose Pune over the other cities.

IPL may appear to be cricket. But it is much more than that. It is the convergence of Advertising, Bollywood and Corporate Power (ABC). The cities which have the biggest markets are likely to attract most advertising. Bollywood glamour is essential to attract the non-cricketing enthusiasts like women and children to watching IPL matches, forgoing their soaps and cartoons. Corporate Power is essential to bring in the big money. Corporate groups are attracted to IPL possibly because the access it gives to fame, glamour and even access to politicians. Cricket is just incidental.

Kochi and therefore Kerala getting an IPL franchise is quite a surprise. Kerala is never known for its cricketing skills. Sreesanth is perhaps the only test level player Kerala has given to the Indian team. Kochi is the fourth team from the South to have an IPL franchisee.

It is not surprising that big states like UP and Bihar have no IPL franchise. UP is a Ranji finalist and has several players who make it to the T20 India team like Suresh Raina, Praveen Kumar, RP Singh to name a few. Sahara group head quarters is also at Lucknow and Subrata Roy is a virtual maharaja in the Sahara City. Yet, there is no IPL franchise, because it is low on ABC score.

The entire East India has just one team from Kolkata. The eight states of North East is totally unrepresented through any IPL franchise.

Many years ago, Jairam Ramesh had said, when he was not a minister, that if one takes the map of India and keeping Varanasi in UP as a reference point draw a line  one will find a huge contrast between  the entire region to the West of Varanasi to that of its East. The East lags behind and the gap is getting bigger every year.

The economic progress and the market growth made by Western and Southern India is reflected even in the choice of IPL centers.

– G. Mohan

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2 responses

5 04 2010
Venkat Subramaniam

The confluence of ABC : Advertisement, Bollywood and the Corporate World is really interesting.
Pune will become of more of an extension of Mumbai with the up-coming township of Lavasa. Talking about the Corporate world, Pune has a very good mix of IT organisations and manufacturing industries.

All these make Pune a very viable location as far as IPL is concerned.

20 05 2010
businessbaatein

3 G Auction guide to Indian markets.

The recently concluded auctions for 3 G spectrum yet again confirms what was found in IPL auctions that Western and Southern regions have stolen a march over the other regions. Delhi being an exception.

The list of top 10 circles and the winning bids are given below.

Delhi- Rs3316. 93 Cr
Mumbai- Rs 3247.07 Cr
Karnataka- Rs 1579.91 Cr
Tamil Nadu Rs 1464.64 Cr
AP – Rs1373.14 Cr
Maharashtra- Rs 1257.82 Cr
Gujarat – Rs 1076.06 Cr
Kolkata – Rs 544.26 Cr
UP (W) – Rs 514.04 Cr
UP (E) – Rs 364.57

Delhi and Mumbai are the biggest markets for premium products like 3G services . This is followed by Bangalore, Chennai and Hyderabad. This is reflected in the winning bids of the respective states.

One cannot but feel sorry for Kolkata. For historical reasons, it is considered a separate circle. Readers may remember that the first cellphone service in India was started in Kolkata in 1995. Kolkata + West Bengal winning bids totally amounts to Rs 544.26 + Rs 123.63 Cr , i.e. Rs 668 Cr. This is just half of the winning bid for AP, a state with comparable population of approx 8 crore each.

That the most populous state in India, UP is an economic laggard is evident from the poor 9th and 10th positions, the two regions UP (W) and UP (E) have received. UP (W) + UP(E) is Rs 878 Cr, less than Gujarat’s Rs 1076 Cr. In terms of population Gujarat is less than 1/3rd the size of UP.

Yet another statistic to highlight the rising economic disparity between regions.

– G Mohan

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