For F1 promoters, break-even is just 2 to 3 years away

Thursday 20 October 2011, 14:58 PM by

The promoters that are associated with the highly awaited Indian Formula One (F1) race facility confirmed on Tuesday that they firmly believe to bring back the amount invested, in a period of about two or three years.

"The break-even on such a big investment would be reached within two-to-three years time. We are very confident in the business," Sameer Gaur, Managing Director, Jaypee Sports International Limited (JPSI) was quoted as saying. Jaypee Sports International Limited, the company which is responsible for giving rise to the Buddh International Circuit conveyed the positive future trend, during the unveiling ceremony of the track. It would be followed by the start of Indian Grand Prix slated to kick-off on 30th October.

According to Gaur, the facility that has been built with an investment to the tune of $200 million, and additional $200 million for F1 licenses, will host a number of other events besides the F1 race. The track will be used for other races, corporate events and would witness establishments like a racing academy.

For F1 promoters, break-even is just 2 to 3 years away  |
Indian Formula One Grand Prix

"Well we have many options in which we can use the facility after F1 race. There will be other motor sports races like Moto-GP, motorbiking, it can be given for training purposes, corporate events, so there are many options for revenue generation," Gaur said.

He also said that the company has given a green light to partnerships like merchandising and sponsorship for other races. "We have roped in Puma as our merchandising partner," Gaur was quoted as saying.

The company's past, too, seems to be as encouraging and bright, owing to tie-up it had with the luxury car manufacturer Mercedes-Benz, which has been roped in as the official automobile partner of the Buddh International Circuit.

Mercedes-Benz has mulled upon laying the foundation stone for a race car academy, which would be the fourth such facility under the German luxury automobile manufacturer's belt. U.S., Germany and China have already been provided with such academies.

"After the inaugural race at the circuit, we intend to open the track for public on Saturdays and Sundays. Aspiring racing car drivers and motor sport enthusiasts can come over here to practise," a proud Gaur said.

In a bid to use the first-of-its-kind event in India, to its advantage, several other auto giants such as Mahindra and Mahindra too plan to make themselves visible at the electrifying event, by using the track for sports activities.

Gaur added that the funding in the project has been made using equity infusion of Rs. 550 crore and a debt element of Rs. 200 crore.

The company has gone into a race lease contract, for a time period of five years, with the international motor sports body Federation Internationale de l'Automobile (FIA) to fulfil the long time dream of the country to host the legendary F1 race. According to the terms and conditions, the lease can also be extended for another five years.

The inaugural race during the 28th October to 30th October event will add to its grace, by the presence of American pop icon Lady Gaga who will perform for the grand party, during her maiden visit to India.

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