Explained: How does the IPL auction purse system work?
What's the story
The Indian Premier League (IPL) auction is set to return to India, with Goa scheduled to host the upcoming event on December 16. The mini-auction for the 2027 season will allow the 10 franchises to strengthen their existing squads. Before the bidding begins, teams will have to finalize their retention lists by November 17. The decisions will directly influence their available auction purses. Here's how the system works.
Pre-auction
Retentions, releases determine franchises' purses
Before an auction, teams have to zero in on the players who need to be retained and released.
The salaries committed to retained players are deducted from the team's overall budget, leaving the remaining amount available for bidding.
A franchise that keeps several expensive players may enter the auction with a smaller purse, while a team releasing more players can have greater financial flexibility to rebuild its squad effectively.
Price
What happens during auction?
During the auction, each player entering the pool has a set base price, which is the minimum opening amount.
Franchises raise bids in prescribed increments until all but one withdraw. The highest bidder secures the player, and that final bid amount is deducted from the franchise's available purse.
Teams can't exceed the permitted spending limit at the bidding event.
Purse
How the auction purse is decided
The IPL auction purse is distinguished from the overall salary cap.
Under the IPL's 2025-27 player regulations, the total salary cap is ₹146 crore for 2025, ₹151 crore for 2026, and ₹157 crore for 2027. This broader cap includes the auction purse, incremental performance pay, and match fees.
A franchise can have up to 25 players, including a maximum of eight overseas cricketers.