Rajasthan Royals: The deal that looked done — until it wasn’t

By Palak Devpura

For a few weeks earlier this year, the sale of the Rajasthan Royals looked complete. The valuation was historic, the buyers sounded glamorous, and American sports money was entering Indian cricket at scale for the first time. To everyone outside the deal room, the acquisition by the Kal Somani-led consortium appeared inevitable.

Then, in late April, the deal quietly collapsed. Another consortium — led by Lakshmi Mittal, his family, and Adar Poonawalla — stepped in and signed the definitive agreement within days, at $1.65 billion. A marginal premium on Somani’s $1.63 billion. In a deal this size, a two-percent gap is commercially trivial. Which raises the only question worth asking: why did one fail and the other succeed? The answer has very little to do with cricket.

Momentum is not closure

There is a dangerous moment every founder experiences. A marquee investor expresses interest. A term sheet arrives. People begin congratulating the founder publicly. At that exact moment, many founders quietly assume the deal is done. Legally, it may still be nowhere close.

The Somani consortium entered exclusivity with strong interest and high-profile backing — Walmart heir Rob Walton, Detroit Lions ownership through the Hamp family. What it did not have, when the seller’s mid-April milestone arrived, was fully locked, unconditional, executable funding visibility across every member of the consortium. In a billion-dollar deal, that distinction matters more than the headline number. Interest is not capital. What sophisticated sellers want at the close of an exclusivity window is not price. It is certainty.

The thirty-nine days that changed the deal

The least glamorous clause in any term sheet is often the most consequential: the exclusivity covenant. In a sophisticated cross-border transaction, exclusivity is not a single window. It is a structured sequence of milestones — and the most critical is what the market calls a show-of-funds: the moment each member of the buyer consortium must demonstrate, in writing and on bank stationery, that its capital is committed and immediately available.

In the Royals transaction, the show-of-funds was reportedly scheduled for mid-April. According to subsequent reporting, the Somani consortium did not pass it. At least one member was no longer fully committed when the milestone arrived. The structural collapse came from inside the buying group, not from outside it.

READ: Kal Somani buys Rajasthan Royals for $1.63 billion (March 25, 2026)

What happened next is the most legally interesting moment. Rather than walk away, the Somani group reportedly attempted to restructure its own role — pivoting from a controlling stake to a minority position, with another lead investor to anchor the consortium. In legal terms, that is a different transaction. Once a buyer presents a new structure inside an exclusivity window, the seller is generally entitled to treat the original exclusivity as having lapsed.

The seller was ready. The sale process was being run by Raine Group, with Macfarlanes on the UK side and AZB Partners on the Indian side. The Mittal family, having lost the first round at $1.1 billion, was reachable. The escalation to $1.65 billion took less than two weeks.

Why the Mittal–Poonawalla bid felt safer

The Mittal family did not need to demonstrate financial capability. Their industrial track record did that work. Adar Poonawalla brought balance-sheet strength plus domestic institutional credibility and regulatory familiarity — the kind of comfort a seller and its regulators want. The final cap table will sit at approximately 75 percent Mittal, 18 percent Poonawalla, and 7 percent for approved existing investors including Manoj Badale, who stays on as a “bridge.” In founder-led businesses, continuity matters more than most acquirers realise. Sophisticated buyers do not underestimate it. Reports suggest the Somani group did.

The legal shadow

The Royals sale was never just a valuation story. It was also a litigation story. The most significant unresolved aspect concerns a shareholder dispute brought by Raj Kundra, the former minority co-owner banned for life by the BCCI in 2015. Through a Bahamas-incorporated vehicle called Kuki Investments, Kundra has filed a petition before the National Company Law Tribunal in Mumbai under Sections 241 and 242 of the Companies Act, 2013, alleging oppression and mismanagement.

The seller’s response was unusually aggressive. Emerging Media Ventures — the UK-incorporated controlling parent — obtained an ex parte anti-suit injunction from the High Court of England and Wales on 29 January 2026. Kundra moved fast. On March 24, the Bombay High Court granted him leave to sue for an anti-enforcement order, observing the UK order was potentially “non est, violative of principles of natural justice and unenforceable” within India.

Setting merits aside, the transactional point is simple. Any unresolved shareholder dispute against the controlling holding entity creates title-risk complexity. The Mittal–Poonawalla buy-side bench — Latham & Watkins, Cyril Amarchand Mangaldas, Trilegal, Goldman Sachs, Price Waterhouse — is built to ring-fence that risk inside the share purchase agreement, not to pretend it does not exist.

What this means for founders

The easiest interpretation — that the Mittals had deeper pockets — is the wrong one. The Mittal–Poonawalla consortium reduced friction at every stage. In modern dealmaking, reducing friction is the most undervalued skill in business. Deals fail because timelines slip, investor coordination weakens inside the buyer’s own consortium, diligence becomes messy, or counterparties stop feeling confident. A transaction begins dying internally long before it officially collapses.

READ: Who owns Royal Challengers Bengaluru Now? Inside David Blitzer and Blackstone’s big move (March 25, 2026)

The most important takeaway for founders is the simplest one. Never mistake momentum for closure. A media headline is not a closed transaction. Investor enthusiasm is not wired capital. A term sheet is not certainty. Until diligence is complete, documents are signed, conditions precedent are satisfied, and money has moved, the deal is still alive — and still vulnerable.
Deal comparison snapshot

Palak Devpura is the founder of Spinach Laws. For more legal analysis and updates, subscribe to The Legal Edge by Spinach Laws newsletter on LinkedIn.