M&A Hits the Cricket Pitch: Torrent’s Majority Acquisition in Gujarat Titans

[Mudit is a student at the University of Mumbai Law Academy.]

The Indian Premier League (IPL) has taken the country by storm, and people have more than ever been engaged with the movements of teams on the points table and their race for the playoffs. Amid all this, the business side of things has also heated up. With the lock-in period agreed upon between Board of Cricket Control in India (BCCI) and new franchise owners getting over in February 2025, M&A deals are set to start in the league. In this line, Torrent group which is primarily engaged in pharmaceutical, healthcare, power and energy sector has moved into the sports franchise industry in Indian markets by acquiring majority stake in Gujarat Titans, a prominent franchise in Indian Premier League. 

This is the third time since the inception of the league when strategic corporate structures have been explored in management of the franchises. Ownership of Delhi Capitals was done in a joint venture structure between GMR Group and JSW Sports where they manage the franchise on alternative basis. After this, in 2022 when 2 new franchises were introduced in the league, bid for Gujarat Titans team was won by CVC Capital which is a private equity firm investing in various global sports franchises all around the world including stakes in LaLiga (Spain’s top football league), Premiership Rugby (England’s rugby competition), and Volleyball World. This was for the first time when a Private Equity (PE) firm invested in the Indian league. Being a PE firm, they had one eye on the door since entering the league after making a significantly profitable exit. To accomplish this, they sold a majority stake in the franchise to the Torrent Group. This article aims to analyze the deal along with the global trends in the sports M&A. 

Deal Snapshot

When the bids were made in 2021 for the 2 new teams in the IPL, Torrent Group put in a bid for Gujarat Capital but did not came through. CVC Capitals won that bid and entered into franchise sports for the first time in India. Due to their past record of investments in betting industry in other geographies, comprehensive due diligence was done and tight scrutiny was placed by the BCCI so that the scary dreams of the past don’t loom over the league. The deal was done by the CVC Capital for INR 5,625 crore through a special purpose vehicle named Ireliya Sports India Private Limited so that the management and operation was transparent and was ring fenced from other investments of the CVC Capital.

In the acquisition, 67% stake was acquired by the Torrent Group for a huge sum of INR 5,025 crores raising the valuation of the franchise to INR 7,500 crore. This acquisition was done through Torrent Investments Private limited. As per the franchise agreement, BCCI will receive 5% value of the transaction amounting to INR 251 crore. This acquisition would leave 33% stake for the CVC Capitals in the franchise which would allow them a share in the profits especially of the media rights which are to be transferred between 2023 to 2027 by the BCCI.

Key Legal Considerations

For executing the transactions, there were some key legal considerations which were to be considered by the parties. Firstly, a nod from the Competition Commission of India (CCI) was needed to assure that there is no vertical and horizontal overlap of the group as per Section 6(4) of the Competition Act, 2002. Along with this, a nod from BCCI was also needed so that the rules of the league are not violated and integrity doesn’t take a toll. 

In the acquisition deal, timing was also of great importance. The 3-year lock in period as per the franchise agreement between the BCCI and CVC Capitals just got over before the finalization of the transaction. 

Global Trends in Sports M&A

As per a report, in 2024, sports M&A transactions have seen a worldwide growth of 44%. Although this number includes tech and fashion deals in sports arena but this gives a picture where the industry is headed. League sports welcome corporate investments with open arms and this gives an interesting flavour to the way sports are played and watched all around the world. In past 18 years of IPL, we have seen a significant rise in the revenue share from the endorsements for the franchises along with the media rights revenue. The industry is rightly placed at the intersection of sports interest, corporate investments and technological innovations and has a lot of potential looking from the corporate lens. Main investors in these franchises are business groups and PE investors who enter with different motives. PE investors have doubled their investments in this sector in past one year from 96 to 190. They enter with the sole motive of profit maximisation as they have 7-9 years exit strategy. On the other hand, business groups enter with a set of primary and secondary motives involving profit maximisation, advertisement reach, diversification and sports interest.

Between July and December 2024, there was a notable surge in global sports and fitness investments, with private equity firms, sovereign wealth funds, athletes, and entrepreneurs acquiring stakes in football clubs, gym chains, and motorsports teams across the US, Europe, and Asia, highlighting growing investor interest in sports as a commercial asset class. In India, cricket is the most watched sport and stakes in franchises playing in IPL are witnessing significant investor which is set to see a steep rise in coming years. 

Conclusion

Acquisition of majority stake by Torrent group from CVC Capital in Gujarat Titans marks a start of an upcoming trend where franchise sports are going to become a key strategic investment area for corporate investors in India as it provides a higher rate of return than many other sectors and also proposes a clear exit from the holdings. India being the largest population attracts the highest number of eyeballs for any sport and raises the value of media rights and sponsorships. This leads to a surge in the valuation of the franchises and as the valuations grow at a fast pace, mergers, acquisitions, joint ventures and even IPOs are going to become a reality soon. Leagues of other sports like kabaddi, football, motor-racing, pickleball etc. are going to grow and move in the similar direction. 

With the boom in this industry, stakeholders will have to assess the market, financial and legal considerations comprehensively to take significant market positions and make the most of their investments.