Wednesday was another historical day for India’s Motor Sport Industry. Sahara Pariwar’s Subroto Roy bought a total of 42.5% stakes in Force India, Formula One team. With biggies like Sahara and Mallya are in the sports’ industry, the industry is ought to flourish.
Sahara Pariwar invested a total of $100 million which sum up to the 42.5% stakes in the team. The additional funds only mean that new shares will be issued for the new “Sahara Force India”. Sahara Pariwar’s Subroto Roy will be the new Chairman of the team while Mallya who owns 42.5% stakes will continue as team principle and managing director, whereas the remaining 15% stakes are owned by a Dutch businessman, Michael Mol, who will be the director for the team.
"When I first approached Sahara it was only for the purpose of sponsorship. But Roy wanted to co-own the team and that's how we came to this agreement," Mallya said on Wednesday.
"The entire investment will be into the team and none of the existing shareholders are taking any money out. I started this team on a very tight budget and in the super-competitive F1 environment this investment will surely help in the progress of the team," he added.
Roy said, "Our goal is to reach to the top as soon as possible. In a very short time, Force India has risen to sixth position on the Constructors' table and we'll take them forward."
The Force India team is at the sixth position in the Formula 1 constructor’s championships with 48 points behind Renault.
Roy further said, "For us, the priority has to be the team and then the Indian drivers. We can't deny reality and can't get emotional about picking drivers for the team," hinting that neither Narain Karthikeyan nor Karun Chandhok is good enough for the team.
"The money will be used to upgrade things like the wind tunnel and simulator. I haven't given up hope for a fifth place finish this year. There are still a few races left and anything can happen," Mallya said.
Sahara's entry into F1 sees the second team overhaul in the sport this season. In March, Spanish investment company Thessen Capital bought a controlling stake in Hispania Racing Team.
Shares of Mallya-owned UB Group rose 9.5 percent on the bourses on Wednesday to close at Rs 107.95 on BSE on news that the company is planning on selling some stake in the Formula One team.
Liquor baron Vijay Mallya had bought the Spyker Ferrari F1 Team in 2007, reportedly for about 90 million Euros. He then renamed the team as ‘Force India’ for the 2008 season.
Mallya also owns IPL team Royal Challengers. On the other hand, Sahara Group that has interests in financial services, real estate, media and hospitality, is a major promoter of sports in India. Sahara owns the new IPL team Pune Warriors India and also sponsors India national cricket team. It had also supported the Indian national hockey team.
India will host its first Formula 1 Grand Prix on 30 October on a 5.14 km track, in Greater Noida built by Jaypee Sports International (JPSI).
Chetan Vengurlekar