Royal Challengers Bengaluru Sale Gains Traction as USL Reviews Investment

The future of the Indian Premier League’s (IPL) franchise, the Royal Challengers Bengaluru (RCB), is in question as its owner, United Spirits Ltd (USL), has initiated a strategic review of its investment. This decision comes as the company looks to concentrate on its core alcoholic beverage business while assessing the value of its wholly owned subsidiary, Royal Challengers Sports Private Limited (RCSPL), which manages both the men’s and women’s teams in the IPL and Women’s Premier League (WPL), respectively.

In an exchange filing with the Bombay Stock Exchange on Wednesday, USL stated that the review process is expected to conclude by March 31, 2024. While the parent company, Diageo, previously declined to comment on the speculation surrounding the sale, this announcement has reignited discussions about the potential sale of RCB. The company’s statement did not specifically confirm any intentions to sell its stake in RCSPL but emphasized a focus on stakeholder consultation as part of the review.

A source close to the situation revealed that USL is exploring various options regarding its investment in RCB. The franchise has gained significant attention following the men’s team’s success earlier this year, prompting the company to reassess its valuation. “At the right valuation, RCB is a great team,” the source noted, indicating that while discussions are ongoing, no decision on selling the franchise has been made.

The Managing Director and CEO of USL, Praveen Someshwar, addressed the situation in the filing, stating, “RCSPL has been a valuable and strategic asset for USL; however, it’s non-core to our alcobev business.” He added that this evaluation aligns with USL’s and Diageo’s commitment to examining their India enterprise portfolio to ensure the long-term value delivery to stakeholders while keeping the best interests of RCSPL in mind.

Rumors have also emerged regarding potential interest in purchasing RCB. Notably, India’s vaccine czar, Adar Poonawalla, has reportedly engaged in discussions with USL regarding a possible acquisition. The franchise is estimated to be valued at approximately USD 2 billion, with the sports business contributing about 8.3% to USL’s total profit in the last financial year.

As the situation develops, stakeholders and fans of RCB will be closely monitoring the outcomes of the strategic review and any potential changes in ownership that may arise from it. The implications of this decision could significantly impact the franchise’s future in the highly competitive landscape of the IPL.