RCB sale to Adar Poonawalla: Unlisted shares of Chennai Super Kings (CSK) might be set for a re-rating if the deal between Adar Poonawalla and Diageo is materialized for the proposed sale of Royal Challengers Bengaluru (RCB), an Indian Premier League (IPL)franchise owned by Diageo-backed United Spirits.
Some experts see a manifold jump in CSK’s stock price value.
Media reports suggest that global spirits major Diageo has initiated the process to sell its stake in the team seeking a valuation close to $2 billion (Rs 17,500 crore). Serum Institute’s owner Adar Poonawalla has shown his interest in the brewer, which sees running RCB franchise as its non-core business. Foreign investment bank Citi is said to be appointed as transaction advisor.
Shares of CSK are currently trading around Rs 180-190 apiece, commanding a total market capitalization of Rs 6,800-7,200 crore. The multibagger stock has dropped nearly 20 per cent from it’s all time high around Rs 225, it hit during IPL season of this year.
RCB stake sale to Adar Poonawalla has sparked a debate if older and profitable franchises such as Chennai Super Kings (CSK) or Mumbai Indian (MI) shall command sharp-discounted valuations. Experts believe that Diageo-Poonawalla’s deal for RCB may have some rub-off on valuations of other franchises as well.
Investors are beginning to recognise that the IPL is no longer just about glitz and glamour. It has a serious global business. To put this in perspective, Torrent Pharma recently acquired a 67 per cent stake in Gujarat Titans at an implied valuation of Rs 7,500 crore- a franchise that is much younger and has a less established brand compared to CSK, said Vijay Kuppa, CEO at InCred Money.
“Legacy franchises like CSK and RCB enjoy superior cost structures, stronger fan engagement, and higher profitability, making them more attractive from a fundamentals standpoint. The RCB transaction is expected to set a valuation benchmark for the older franchises including CSK,” he said.
According to its annual report, Chennai Super Kings (CSK) reported a profit after tax (PAT) of Rs 180.94 crore with an operational revenue of Rs 615.41 crore for the financial year ended on March 31, 2025. The IPL team had clocked a bottomline of Rs 229.10 crore with an operational revenue of Rs 650.55 crore for the fiscal year 2023-24.
Dinesh Gupta, Co-founder at Delhi-NCR based UnlistedZone said that PE firms across the globe are exploring opportunities in IPL as it has turned into a global business asset class. CSK represents a unique value opportunity as he believes that the Chennai-based franchise shall command similar valuations, if the deal materializes.
“IPL’s valuation boom is real and sustainable as media rights deal, digital viewership and global investor participation are fuelling this momentum. RCB’s $2 billion price tag should re-rate CSK’s price in unlisted share market and if everything falls in place, one may see CSK’s valuations reconciling with respect to new-norms.”
However, some experts have a different view. They believe that CSK has remained range-bound for a long period even as it got multiple opportunities for rerating. Selling pressure on all levels is a major tailwind for this stock in the unlisted market.
Sandip Ginodia, CEO at Altius Investech said that CSK could have been rerated when Lucknow franchise was sold Rs 7,500 crore but that did not happen. CSK has a very big equity and selling pressure is a major headwind for the stock movement. “RCB’s deal may lead to some excitement, but one must see if the rally sustains or fizzles out for the most profitable and successful IPL team.”