Kal Somani acquires Rajasthan Royals for USD 1.6 billion

Kal Somani, an existing shareholder in the Rajasthan Royals IPL team, has purchased the Jaipur-based team for approximately INR 16,290 crore, or USD 1.63 billion. Times Group, which was also in the fray, finished a close second in the bidding race. Somani will head a consortium that includes Walmart, and his group has acquired a full 100 percent stake in the Royals - one of the original eight IPL franchises. After the 2026 season, he is expected to succeed Emerging Media's Manoj Badale, who is based in the UK. Kal Somani, who is in his 50s and lives in Scottsdale, Arizona, enjoys golf as well as cricket. He founded Motor City Golf Club, which is associated with Tiger Woods, a golfing legend. His son, Arjun Somani, is a promising talent on the US junior circuit. Somani is the founder of several businesses and has interests in academics as well as sports. Industry experts have said the USD 1.6 billion valuation for Rajasthan Royals is not surprising. "RR deal validates higher franchise valuations," said Karan Turani of Elara Capital. "The acquisition of Rajasthan Royals by a Kal Somani-led consortium at $1.63bn reinforces our view that IPL franchises are now valued in the $1.5-2.0bn range, supported by strong media monetisation and rising global investor interest." It is believed that the bidding ended on Monday, when the winner was chosen. There were multiple bidders and Times Group was one of them. The Board of Control for Cricket in India (BCCI) is still to be made aware of the transaction and as per the IPL franchise agreement, the BCCI has to be paid five per cent of the transacted money which is close to INR 765 crore. Rajasthan Royals were the lowest-priced franchise among the original eight in an auction spearheaded by Lalit Modi in 2008. It was then valued at USD 67 million and bought by a consortium led by Badale. The franchise surprised everyone by winning the inaugural season under the captaincy of Shane Warne. Suresh Chelaram, Modi's brother-in-law, later owned 56% of the franchise, but he eventually left, and Badale became the franchise's primary owner. In between in 2009, the Royals sold a 13 per cent stake to Raj Kundra, valuing the franchise at roughly USD 120 million. At the time, it was believed that Kundra paid INR 65 crore for a 13% stake. Kundra had to leave the ownership group in July 2015 after being handed a life ban by the Lodha Committee for his involvement in betting activities. In 2021, the Royals sold around a 15 percent stake to RedBird Capital Partners for approximately INR 550-600 crore. As part of that transaction, a drag-along clause was introduced, meaning that if RedBird decides to exit, other shareholders may also be required to sell. The drag-along clause ensures a higher overall valuation, as a controlling stake typically commands a premium, whereas the sale of a minority stake attracts relatively lower valuations. With RedBird insisting on the clause and wanting to exit, the current owners have had little choice but to put the franchise on sale.