Synopsis: RPSG Ventures shares surged 20% after the Rs 16,600 crore RCB deal reset IPL franchise valuations, triggering a sector-wide re-rating. Investors are now valuing its Lucknow Super Giants stake more optimistically, given significant hidden value. The rally also reflects renewed interest in sports assets and a rebound after recent stock underperformance.
The stock of RPSG Ventures gained as much as 20% on Wednesday, as it rode on a wave of positivity among all IPL team owners following a big deal in the cricketing business. The trigger for this was the sale of the Royal Challengers Bengaluru (RCB) team for more than Rs 16,600 crore, which has now redefined valuations for all sports teams in India.
With a market cap of Rs 2,344 crore, the shares of RPSG Ventures Ltd jumped 20% in today’s trading session and reached a high of Rs 726.20. When compared to its previous day’s closing price of Rs 606.70, they have given a return of more than 100% in the last 5 years.
The sharp rise in the stock of RPSG Ventures can also be attributed to a general re-rating of all companies owning IPL teams, as investors are now looking at the underlying value of owning a sports team. The company, which owns the Lucknow Super Giants (LSG), is now a major beneficiary of this change in perception.
RCB deal reinforces valuation benchmarks
The RCB deal at a high valuation further underlines the high commercial potential of the IPL teams. With marquee investors such as the Aditya Birla Group, Brookfield, and so on participating in the bidding for the teams, this deal points to the growing interest from investors for sports businesses.
This has a direct relevance for RPSG Ventures. Their investment in LSG is now being looked at from a more positive angle, as the valuations for the other teams suggest the franchise could be worth much more than what is indicated by the market capitalisation of RPSG Ventures.
Hidden value in LSG leads to the rally
RPSG Ventures has a 51% stake in the Lucknow Super Giants, and it has been estimated that the company’s overall valuation could be about 2.5 times the company’s current overall market capitalisation. Therefore, this indicates the presence of significant ‘hidden value’ that has not been fully reflected in the company’s stock price up to this point.
Furthermore, the stock has also rallied as the company has seen some underperformance in the past, with the stock falling by almost 30% in the past year. Therefore, the positive developments have served as a trigger to the significant rally seen in the stock as investors are looking to benefit from the potential upside that may be seen if the value-unlocking scenario comes to fruition.
Furthermore, the stock has also seen some significant momentum as well, as the sports sector has seen some significant interest in the past, and now the IPL valuations have also gained significant attention on the global front, and hence, the company could continue to see significant interest in the stock.
Financials
The revenue from operations for the company stood at Rs 2,756 crore in Q3 FY26 compared to the Q3 FY25 revenue of Rs 2,385 crore, up by about 15 per cent YoY. However, the net loss stood at Rs 136 crore in Q3 FY26, up compared to the Rs 46 crore loss in Q3 FY25.
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