Cheers to IPL exit! Brokerages say Rs 16,660-crore RCB stake sale will unlock value for United Spirits

After United Spirits finalised the sale of its stake in Royal Challengers Bangalore (RCB) for Rs 16,660 crore, brokerages said the deal is a positive for the alcohol maker and will likely unlock value for investors.

A consortium comprising Aditya Birla Group, The Times of India Group, Bolt Ventures and a Blackstone fund acquired the team, which won the IPL 2025 tournament. It also acquired the franchise’s team in the Women’s Premier League. The deal has garnered a 16 times return for United Spirits as against its 2008 bid value.

Under the new ownership structure, Aryaman Vikram Birla, director of Aditya Birla Group, will serve as chairman, and Satyan Gajwani of The Times of India Group will serve as vice-chairman of the franchise.


The acquisition is subject to customary closing conditions, including approval from the Board of Control for Cricket in India (BCCI), the IPL Governing Council and other applicable regulatory authorities.

What lies ahead for United Spirits?

Nuvama, in its report, said that United Spirits’ exit from IPL will sharpen focus and unlock value. It noted that the effective valuation is higher at over Rs 18,200 crore, including the Rs 540 crore WPL liability and Rs 980 crore BCCI fees plus GST, which will be borne by the buyers.

“The deal removes a key overhang, unlocks significant capital from a low-contribution asset and sharpens focus on core alcobev operations. It sets a strong valuation benchmark for IPL franchises, implying potential upside for other listed franchise owners such as Sun TV (SRH) and RPSG Ventures (LSG),” it said.

Nuvama expects United Spirits to announce a one-time dividend after approval in six months, supporting shareholder returns. Overall, it sees this transaction as value accretive for United Spirits, improving capital allocation, return ratios and strategic clarity. It maintained a ‘Buy’ rating for the stock, with a target price of Rs 1,660 apiece, implying a 25% upside potential from the previous closing price.

Nomura, in a note published before the announcement, had expected RCB’s stake sale to attract premium valuations, which could act as a positive trigger for the stock. Additionally, it noted that the regulatory environment for India’s alcobev sector has materially improved over the past couple of years.

“We believe the price deregulation of alcohol in Karnataka is a material positive for the sector as it will improve USL’s pricing power, ability to protect its margins and drive premiumisation (we expect a shift in the preference for Prestige & Above from Popular & Below, with the introduction of alcohol content tax) in one of its largest states. We also note that certain states have allowed the sale of alcohol on some of the dry days recently, like Holi, which should be supportive for alcohol companies,” it added.

United Spirits is one of Nomura’s preferred picks in the consumer discretionary space. It maintained a ‘Buy’ rating on the stock, with a target price of Rs 1,650 apiece, implying an upside potential of more than 24% from the previous closing price.

United Spirits share price

United Spirits shares gained more than 1% to hit an intraday high of Rs 1,345.40 apiece in the early trading hours of Wednesday. The stock, however, lost steam later and declined more than 1% to trade at around Rs 1,314 apiece in the afternoon.

The stock has fallen more than 7% in the past one month.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)