Explained: How Gujarat Titans brought crores in revenue for owners and proved IPL's financial success

Ahmedabad-based business conglomerate Torrent Group is reportedly set to acquire a majority stake in Indian Premier League (IPL) outfit Gujarat Titans (GT). According to a report in The Economic Times, Torrent Group are likely to acquire 66 per cent stake in Gujarat Titans, who were originally purchased by CVC Capital Partners for a whopping amount of Rs 5,625 crore.

The report adds that both Torrent Group and CVC Capital Partners are currently in the process of approaching the BCCI for the deal’s approval and that both parties are looking to finalise the deal before IPL 2025, slated to begin on 21 March.

How Gujarat Titans brought crores in revenue for owners

Before we get into the details of the Torrent Group’s imminent majority acquisition of Gujarat Titans, it’s important to note that this will be for the first time in 18 years a majority stake will be sold in an IPL franchise. The report adds that the value of the deal is estimated to be around Rs 7,500 crore, with Torrent Group paying Rs 5,025 crore to acquire 66 per cent, which makes up two-thirds of the franchise.

This would mean that CVC Capital Partners regain 89 per cent of the amount that they had acquired the franchise for in 2021, and will be left with a minority stake in the franchise— 34 per cent to be precise. A total of nine parties had submitted bids for the Ahmedabad and Lucknow franchises during the auction in 2021. Apart from CVC Capital Partners and RPSG Group (which acquired Lucknow Super Giants for Rs 7,090 crore), there was only one bid that surpassed the Rs 5,000 crore mark.

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That bid was by Adani Sportsline, worth Rs 5,100 for each of the two franchise. The other parties, that included Kotak Mahindra, Capri Global, HT Media, Torrent Group and Championship Cricket LLC, with each of these parties submitting bids between Rs 4,128 crore and Rs 4,513 crore.

By selling 66 per cent stake of the total amount, CVC will stand to gain almost as much as Adani Sportsline’s bid, and with a 34 per cent stake in the franchise, the current value of the team will be at an amount of Rs 2,475 crore.

BCCI clause restrictions 

And a valuation of Rs 7,500 crore will make GT the costliest franchise, Rs 410 crore more than what RPSG Group had paid (Rs 7,090 crore) to acquire LSG. The deal between Torrent and CVC Capital Partners, had in fact, been announced more than a year back . However, a BCCI clause bars franchise owners from selling a stake in the team for the first three years, because of which both the parties had to wait for some time before finalising the deal.

According to another BCCI clause, the party acquiring stake in the franchise has to pay the BCCI five per cent of the transaction value. In this case, the transaction value is Rs 5,025 crore which means the BCCI are bound to receive Rs 251 crore. Only twice have IPL franchises been involved in selling stakes, but in neither case did the franchise owner sell majority share.

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Back in 2010, actress Shilpa Shetty and her husband Raj Kundra had acquired a 11.7 per cent stake in Rajasthan Royals, but they had to surrender that stake in 2015 when the franchise was involved in IPL spot-fixing controversy. Another instance was that when JSW Group acquired a 50 per cent stake in Delhi Capitals in 2018. Currently, JSW Sports and GMR Group share 50 per cent of DC’s ownership each.

GT won the IPL under Hardik Pandya’s captaincy in their maiden season in 2022 and reached the final in 2023, eventually losing to Chennai Super Kings (CSK). In IPL 2024, GT, under Shubman Gill’s captaincy, failed to qualify for the playoffs after finishing in eighth place.