Sun TV Network has dipped 7% to Rs 320, extending its yesterday’s over 3% fall after the company said it has bought the Hyderabad franchise of the Indian Premier League (IPL) with a winning bid of Rs 85.05 crore per year.
“After five years, Sun TV will pay 20% of the franchisee income received, in four quarterly installments to the Board of Control for Cricket in India (BCCI),” a Chennai-based media house said in a filing.
The winning price is more than twice the Rs 42.8 crore per annum that Deccan Chronicle was paying for Deccan Chargers since 2008, but virtually half the Rs 170 crore per year paid by Sahara Pune Warriors when they joined the league in 2010.
“The revenues for erstwhile Deccan Chargers would be lower owing to weaker performance and lower popularity. However, going forward, depending on the performance of the team, revenue, from franchise sponsorship and ticket sales, has a potential to shoot up,” analyst at ICICI Securities said in its report.
The stock opened at Rs 344 and hit a low of Rs 317 on the BSE. A combined 1.75 million shares have already changed hands on the counter till noon deals against an average less than one million shares that were traded daily in past two weeks.