Force India has a new co-owner in Sahara India with immediate effect. Sahara will own 42.5% of Force India and Vijay Mallya the remaining 42.5% of his initial 85% ownership.
The new team name will be called “Sahara Force India”. The deal has been valued at $100 million for the 42.5% stake thus valuing the mid pack team at upwards of $2oo million.
Prior ownership was 85% Vijay Mallya and the remaining 15% was Mol family who ran the team as Spykar before VJMallya entered the F1 scene.
This comes as a surprise and excitement for me.
Surprise : The valuation seems inflated. Most of the mid pack teams are valued at around $100 million in entirety. Even Williams F1 with decades of history and brand value is currently pegged at $160 million (Its a public entity these days). With the hoopla around Indian GP and optimism, it might seems justifiable but in the long run, F1′s returns are dependent on some very cut throat margins and finaces.
Excitement : Sahara India has always been a great supporter and patron of sports in India. They are the main sponsors of Indian Cricket Team which is one of the most expensive sporting deals on the planet. They have also been a sponsor of Indian Hocky Team and venturing into F1 just about seems to be sensible when the next generation of Indians fall in love with Formula 1.
Sahara’s move is positive as starting/buying in an unfamiliar territory like F1 has had Godzilla sized failures (read Toyota, Honda, Jaguar) but a stake in current operations of things seems smart. Force India has been decent and building up quite well since Vijay Mallya brought a controlling stake some years back.
Its a win-win-win situation for Force India, Sahara and Formula 1 in India, hope Sahara wont mind the price for the pride they’ll carry at the maiden Indian GP later this month.