But how does Sun Tv stand to gain when it doesn’t even have a stake in RCB or Diageo? The reason: a $2 billion price tag for RCB, which media reports say Diageo is seeking, would reset the benchmark for IPL team valuations and directly lift SRH’s own worth. That jump could boost Sun TV’s balance sheet. The company currently attributes about Rs 87 billion of its market value to SRH; this could increase if valuations are revised.
The impact of this re-rating would also be larger for Sun TV than for Diageo. SRH accounts for about 45% of Sun TV’s market capitalisation, while RCB makes up only 7–8% of United Spirits’ value.
Adding to the speculation was a comment by Lalit Kumar Modi, Indian Premier League’s first commissioner. In a post on X (formerly Twitter) on September 29, he said, “There have been a lot of rumors about the sale of RCB. It seems the owners have finally decided to take it off their balance sheet and sell it. I am sure having won the IPL last season and also with its strong base of fans and off course the Team itself and a great management team – it could be the only Team which would be available as a whole as an IPL franchise. I am sure one of the big global funds or a sovereign fund would desperately like to have them as part of their investment strategy and India strategy.”
“There can be no better investment opportunity I could think of than this one. Good luck to whoever can get their hands on it. It definitely will set a new record valuation which will just go to show that IPL is not only the fastest growing global sporting league but also the most valuable. That new price that RCB sets will become the new floor price for all teams,” the 61-year-old added.
The shares of the company ended at Rs 588, higher by 12% from the last close on the NSE. Sun TV shares are down 11% on a year-to-date basis.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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