Indiantelevision.com Team

(31 May 2006 9:00 pm)

MUMBAI: Walchand CricketNext.com plans to dilute stake and is in talks with strategic investors including TV broadcasters. The company, which runs a leading cricket portal, also aims to raise $5 million to fund investments in purchasing rights, web casting technology, setting up a stronger e-commerce platform, creating new content like customized games and products for mobile technology.

"We have commenced negotiations with TV channels. We are also in negotiations with horizontal portals and telecom operators. Our role as a content aggregator has strategic value for the other media companies and telcos," Walchand CricketNext.com co-founder and managing director Sanjay Jha tells Indiantelevision.com.

The preference at the initial stage, though, is to rope in a financial investor. And in the next stage after 18 months, the ideal jump would be to get a strategic investor in. "But even at this stage, if we get the right price, we are prepared to sell a part of our stake to a strategic investor. We would like to hold majority stake," Jha says.

The promoters of Walchand CricketNext. Com hold over 90 per cent stake in the company after announcing today a buy back of 30 per cent shares from Centurion Bank of Punjab for an undisclosed price. The Bank had acquired the shares from KVP Venture Capital Fund launched by, amongst others, the late Australian media mogul Kerry Packer of Channel 9 fame, who revolutionized cricket by launching a rival series to ICC. Individual investors hold about six per cent equity in the company.

KVP had come in as initial investors and CricketNext.com at the time of launch was valued at $8 million. Even if the cricket portal manages to raise $5 million for a dilution of 30 per cent, the valuation would see a substantial jump after six years of launch.

"Internet property is hot today. The reason for buying back the shares is to hold a higher RoI (return on investment) on promoter equity. We now have the operational flexibility to upscale our business operations to a global level. The Internet is at last accepted as a recognized formidable media, which will soon significantly enhance its share of the ad pie from TV and print. Online advertising is on an upward curve, and the shifting demographics are bringing youth to be amongst the biggest users. The icing on the cake is the emerging mobile entertainment space which has made the convergence of new technologies a compelling business reality,” Jha says.

Walchand CricketNext has mandated Haribhakti MRI, a Mumbai-based corporate financial advisory firm to raise the funds.

The company is targeting a gross income of $75 million in 2011 on the back of new revenue streams and World Cup properties. "Cricket will show a continuous buoyant growth right till the World Cup 2011 to be held in the Indian sub-continent. We anticipate a high growth rate culminating in gross income of over $75 million in year 2011," says Jha.

Adds Walchand CricketNext.com director Pallavi Jha, "CricketNext is the leading vertical in the Indian sub-continent, and highly popular amongst NRIs manifested by over an average 750 million page-views per month and over three million unique users per day per match. Now is the perfect time to monetize this huge and loyal customer base which is expanding exponentially."