Torrent Group Acquires Majority Stake In IPL Franchise Gujarat Titans

Healthcare and energy conglomerate Torrent Group on Wednesday announced acquisition of a majority stake in IPL franchisee, Gujarat Titans for an undisclosed sum, marking the Ahmedabad-based firm's foray into the sports sector. Torrent Group 'through its holding company Torrent Investments Pvt. Ltd. has entered into a definitive agreement to acquire a majority stake of 67% in the renowned Indian Premier League franchise, Gujarat Titans,' it said in a statement.

The conglomerate is buying a majority stake in Gujarat Titans (Irelia Sports India Pvt, Ltd.) from Irelia Company Pte Ltd which so currently fully owned by private equity fund CVC.

The transaction is subject to customary closing conditions and approvals (including from BCCI).

As part of the deal, Irelia will retain a substantial minority stake of 33% in the franchise.

The acquisition marks Torrent Group's foray into India's rapidly growing sports sector. It is the latest corporate to enter the lucrative and high-visibility sporting event.

IPL currently has 10 teams, each named after a different city or region in the country. These are owned by a varied mix of large Indian conglomerates (Reliance Industries, JSW Group, GMR Group, RP Sanjiv Goenka Group), multinational companies (Diageo Plc through United Spirits), family offices of leading ultra-HNIs and even private equity investors (CVC Capital).

Richest Indian Mukesh Ambani's Reliance owns Mumbai Indians while N Srinivasan and family of India Cement fame owns Chennai Super Kings. Sanjiv Goenka's RPSG Group is the owner of Lucknow Super Giants while Delhi Capitals is owned by a joint venture of GRM Group Entities and JSW Group (50 per cent each).

Sunrisers Hyderabad is owned by the Sun Group, Royal Challengers Bangalore by United Spirits Ltd. and Punjab Kings is owned by Mohit Burman (Dabur) (48%), Ness Wadia (Wadia Group) 23%, Preity Zinta (23%) and Karan Paul (Apeejay Surrendra Group) (6%).

Superstar Shahrukh Khan and his wife Gaur Khan's Gauri Khan Family Trust (55%) and Juhi Chawla and Jay Mehta's Mehta Group (45%) own Kolkata Knight Riders.

CVC Capital Partners acquired Gujarat Titans franchise for a total of Rs 5,600 crore in 2021. It was the second team to win the IPL in their first season.

The foundation of Torrent Group was laid by UN Mehta as Torrent Pharma.

Since then, the brothers Sudhir and Samir Mehta grew the pharma business and diversified into power and gas distribution sectors.

In recent years the group has announced its intention to expand into the electrical and diagnostic sectors in addition to the acquisition of Gujarat Titans. The Group market cap has compounded by 33% per annum over the last five years and grown to about Rs 2 lakh crore.

Speaking on the occasion, Jinal Mehta, Director, Torrent Group, said, "As sports continues to gain prominence in India, Torrent sees great potential in this rapidly growing sector. With the acquisition of a majority stake in the Gujarat Titans, we are excited to have the opportunity to elevate our fan experience and unlock new growth avenues in the years to come." Torrent, he said, is "committed to nurturing the Gujarat Titans team and creating a lasting legacy for everyone involved – our fanbase, the players and our employees." He touted Torrent's track record of delivering high quality products and services across multiple sectors to say the group is well-positioned to set new standards of excellence in the sports industry through this acquisition.

Siddharth Patel, Managing Partner at CVC, commented, "Our participation in Indian Cricket started strongly, securing the Gujarat franchise, winning the IPL title in our first season and emerging as runners up in our second season".

Nick Clarry, Managing Partner at CVC, said, "CVC has a long history of investment in sports since our investments in MotoGP and Formula One, and we are extremely proud of how this investment in Gujarat Titans has developed."

“We particularly want to thank our fans, our management team, our players and the BCCI. Because of them, Gujarat Titans has become a leading franchise on and off the pitch, and together with the support of our wonderful fans, we expect this to accelerate with our new partners, Torrent'.

IPL operates on a revenue share model between cricket body BCCI and individual teams. Revenue from sale of broadcasting rights and those generated from league-level sponsorships are clubbed into a central pool, half of which is retained by BCCI and the rest shared among individual teams.

Apart from this, teams also generate some revenue through team-level sponsorships, sale of merchandise and stadium ticket sales.

Teams pay a franchise fees to the BCCI. While eight older teams - Mumbai Indians (MI), Chennai Super Kings (CSK), Delhi Capitals (DC), Punjab Kings (PK), Sunrisers Hyderabad (SRH), Royal Challengers Bangalore (RCB), Rajasthan Royals (RR) and Kolkata Knight Riders (KKR) pay a share of revenue as franchise fees, newer teams - Gujarat Titans (GT) and Lucknow Super Giants (LSG) - are required to pay a fixed amount basis their bid value in the 2021 auction for 10 years. After 10 years, both these teams will also shift to a revenue share.