Will Nimbus buckle under its ambitious cricketing bid?
Business Today is skeptical whether Nimbus Communications, which raised $45 million from UK-based PE firm 3i last year, can manage to make money on its $612.18 million bid for the global television rights to Indian cricket (2006-10).
The general consensus is that it's going to be a tough ride for Nimbus. According to Modi's calculations, "Nimbus will have to generate around $700 million (Rs 3,150 crore) to break even"; that's because logistics and other expenses will add about $90 million (Rs 405 crore) to his costs. To earn a 20 per cent profit, he will have to generate another $140 million (Rs 630 crore). "On the face of it, the target does look daunting," says ICC's Stewart. "But Thawani might have something big up his sleeve," he adds.Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.