The company has announced an agreement to sell its 100% stake in Royal Challengers Bangalore (RCB) to a consortium comprising Aditya Birla Group, Blackstone, Bolt Ventures, and Times Internet for ₹16,600 crore, or about $1.78 billion.
United Spirits, based in Bengaluru, has a market capitalisation of about ₹95,283 crore, with its shares down nearly 4% over the past year.
Roy described the transaction as a “good deal” that removes a long-standing overhang on the stock. He added that the effective valuation is closer to ₹18,000 crore after factoring in additional costs—₹550 crore for the women’s team and a 5% fee payable to the Board of Control for Cricket in India (BCCI)—which will be borne by the new owner.
A key focus for investors is the utilisation of proceeds. Roy expects a one-time dividend in the range of ₹100–150 per share, supported by parent company Diageo’s global shareholder payout approach. The deal is expected to close in about six months, subject to approvals from the BCCI and the Competition Commission of India (CCI).
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In addition to the RCB deal, several structural triggers are supporting the outlook. These include a favourable taxation policy expected in Karnataka in 2026-27 (FY27), benefits from the UK Free Trade Agreement (FTA) on Scotch raw materials from the second quarter, and easing input cost pressures due to softer crude oil prices.
While the January-March quarter of 2026 (Q4FY26) performance may remain weak due to issues in Maharashtra, Roy believes this is already priced in, with the stock correcting from ₹1,650 to ₹1,330. He expects a recovery towards ₹1,650 over the next year and maintains a positive stance on the company.
Also Read | Royal Challengers Bengaluru sold for $1.78 bn as United Spirits exits IPL franchise: All to know
The RCB transaction is also seen as a sentiment booster for other IPL-linked companies such as Sun TV and RPSG Ventures, though Roy cautioned that this remains “paper wealth” unless monetised through actual deals.
In the alcohol-beverage sector, Roy suggested a selective approach. Unseasonal rains could weigh on beer demand in the near term. He prefers United Spirits and Allied Blenders currently, while viewing United Breweries as a longer-term 2026-27 (FY27) play.
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