United Spirits' Parent Company Diageo Mulls Stake Sale In IPL Franchise RCB, Sources Say

British distiller and United Spirits Ltd.'s parent Diageo Plc is evaluating options to sell a partial or full stake in Royal Challengers Bengaluru, according to people familiar with the matter.

The liquor giant is exploring ways to monetise the IPL franchise after its recent title win, the people said, adding Diageo is talking to potential advisors to manage the deal. The conversations are still in early stages and being directly managed from London, the people added.

RCB, which recently won the IPL title for the first time in its 18-year run, is likely to be valued better. According to the people, Diageo is expecting strong interest from potential buyers.

Initially owned by liquor baron Vijay Mallya, RCB is one of the earliest teams in the IPL, with a large fan following, especially in the city of Bengaluru. It was also a way for Mallya to market his alcohol brands, as India prohibits direct advertising of alcoholic products.

The original RCB team and Mallya were a key component of the Kingfisher brand's "King of Good Times" advertisements.

After Mallya's financial collapse, Diageo took over his company, United Spirits, in 2014. It then renamed United Spirits to Diageo India. The current deal talks are also a way for the British alcohol major to exit non-core businesses, as it reinforces focus on the alcohol brands that it owns, the people quoted above said.

Diageo India owns the Royal Challenge, Antiquity Blue and McDowell's brands of blended whisky, the Scotch brand Black & White, vodka brand Smirnoff, among others.

United Spirits said reports on potential stake sale are "speculative in nature" and denied any such proposal in a stock exchange filing.

This is not the first time that an IPL franchise will see a change in ownership. In 2012, owing to financial difficulties, Deccan Chronicles sold its ownership in Deccan Chargers Hyderabad to Kamla Landmarc Real Estate Holdings. Later, however, the franchise was cancelled by the Board of Control for Cricket In India.

In 2015, India Cements transferred to India Cement Shareholders Trust. After that, the trust eventually transferred the ownership to India Cements' promoter and non-promoter shareholders.

In February this year, Ahmedabad-based Torrent Group confirmed that it will buy a 67% stake in the Gujarat Titans team, which is currently owned by CVC Capital Partners.