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Diageo mulling for value unlocking in RCB (cricket franchisee)

ICICIdirect Research 03 Oct 2025 DISCLAIMER

As per media reports, Diageo (United Spirits) has initiated process of sale of stake in IPL team, Royal Challengers Bangalore (RCB) for an estimated valuation of US $2bn (Rs.17,000cr). Among the buyers, Adar Poonawala is seeking to buy entire stake in the franchise.
In sum of the part valuations, Street was giving a value of Rs10,635-12,000crore at Rs147-165 per share. With estimated deal value being ~Rs.17,000cr, it could potentially add Rs.225-Rs.235 per share, 35-42% premium to per share value given by the street
Sale of RCB would lead to value unlocking for United Spirits could fuel its expansion plans ahead with the proceeds and focus on its core business of alco-beverages.
If deal happens at the valuation mentioned in the media reports, then we should expect one-time special dividend post the value unlocking. Also, we might see some of the funds getting utilised to improve the growth of the core business under the new leadership.
Stock has corrected by 21% from its recent high and hence we believe downside risk is limited from the current levels.

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