United Spirits denies report of potential stake sale in IPL franchise RCB

United Spirits on Tuesday rejected media reports that claimed its parent, Diageo Plc, was exploring options for its ownership of Indian Premier League (IPL) franchise Royal Challengers Bengaluru (RCB).

A Bloomberg News report said Diageo has been holding talks with potential advisers and may seek a valuation of up to $2 billion for the team, which it owns via its Indian subsidiary United Spirits Ltd (USL).

However, no final decision has been made, and a sale is not guaranteed, according to the report.

Shares of United Spirits rose as much as 3.3% to a five-month high following the report of the potential deal, before settling around ₹1,616.50.

United Spirits has since issued a clarification denying any such plans.

In a filing to the National Stock Exchange dated June 10, 2025, the company stated: “The aforesaid media reports are speculative in nature and [United Spirits] is not pursuing any such discussions.”

The initial report of potential sale had come amid increasing regulatory pressure in India. The health ministry has been pushing for stricter rules to curb the indirect promotion of alcohol and tobacco products in the IPL, where direct advertising of such products is already banned.

Diageo has previously marketed non-alcoholic products like soda using cricket celebrities.

RCB, one of the original IPL teams, was initially owned by embattled liquor baron Vijay Mallya before Diageo acquired the franchise through its takeover of Mallya’s spirits business. The team recently secured its first IPL championship.

A potential sale, had it materialised, could have served as a benchmark for valuations in the IPL, which has evolved into a global sports and entertainment powerhouse.

Praveen Someshwar, Diageo India’s newly appointed managing director and CEO, recently said demand in India’s spirits segment remains subdued due to regulatory challenges and uneven consumption trends. While growth in premium segments remains strong, overall spirits sales rose just 1.6% in FY25, compared with 4.2% the year before.

Despite the slowdown, United Spirits reported 8.2% growth in net sales value in FY25, driven by a 9.9% rise in volumes in its prestige and above (P&A) segment, which now contributes 81% to total volumes.

Diageo, whose portfolio includes brands like Smirnoff and Tanqueray, has invested over $3.5 billion in India over the past decade and is targeting to double its innovation-led growth in the next three to five years.

According to Bloomberg, the sale of the IPL franchise could unlock capital for the company, which is streamlining operations and reassessing non-core assets globally.