$2 billion RCB Sale? Diageo to exit as Adar Poonawalla emerges frontrunner

New Delhi: British spirits giant Diageo has initiated the process of selling its stake in the Indian Premier League (IPL) franchise Royal Challengers Bangalore (RCB), aiming for a valuation close to $2 billion, according to news reports. 

The news reports further stated that Adar Poonawalla, CEO of the Serum Institute of India, has emerged as a key contender in the race to acquire the team.

The sale, handled by global investment bank Citi as the transaction advisor, involves Diageo's subsidiary United Spirits Limited (USL) offloading its entire stake in RCB. 

Sources quoted in media reports indicate that Diageo is insisting on a one-time payment, which has made potential buyers cautious about the high price tag, estimated at approximately Rs 17,000-18,000 crore. 

While Poonawalla is described as the frontrunner, other industry giants are reportedly in the fray, though no additional names have been confirmed.

Diageo acquired control of RCB through its purchase of USL in 2014, following Vijay Mallya's original acquisition of the franchise for $111.6 million during the IPL's inaugural auction in 2008. 

Praveen Someshwar, MD and CEO of Diageo India, recently characterised RCB as an "exciting business, but non-core for Diageo," signalling a strategic shift away from sports ownership to focus on its core alcoholic beverages operations.

The timing of the potential sale follows RCB's maiden IPL men's title win in 2025, which has significantly boosted the franchise's brand value and global appeal. 

Former IPL commissioner Lalit Modi weighed in on the speculation via Instagram, stating, "There have been a lot of rumours about the sale of an IPL franchise, specifically Royal Challengers Bengaluru – well, in the past, they have been denied. But it seems the owners have finally decided to take it off their balance sheet and sell it." 

He predicted the deal could set a new record, establishing a floor price for all IPL teams and underscoring the league's status as the fastest-growing sporting property worldwide.

This move comes amid a surge in IPL franchise valuations, highlighted by the Torrent Group's recent acquisition of a 67% stake in Gujarat Titans for Rs 7,500 crore. Analysts note that RCB's proposed $2 billion price represents about 20 times its revenue, a premium compared to other deals, reflecting the IPL's increasing attractiveness to investors.