Airtel had offered Rs 316 crores, in the bid for the title sponsorship of the Twenty20 tournament, owned by the Indian Cricket Board (BCCI).
Farooq Abdullah, the Chairman of the BCCI's Marketing Committee, announced that the rights had been won by PepsiCo over the next five seasons.
"The BCCI is very pleased to welcome PepsiCo as a central partner of the IPL. The value of the winning bid reflects the growth and success of the IPL," Abdullah said.
The bids were opened in front of the representatives of the only firms which took part in the process though four other parties had bought the Tender to Invitation from the Board, said IPL Governing Council Chairman Rajeev Shukla.
Shukla said that the title-sponsorship contract was for a five-year period and will end in 2017.
Realty firm DLF ended its five-year-long association with the IPL as the title sponsor in August and the BCCI floated the tenders last month. DLF paid Rs 200 crore for the five year period of 2008-12.
"PepsiCo's bid is double of the Rs 200 crore paid by DLF in the first five seasons of the IPL. It is almost double than what DLF were giving us. DLF were giving 40 crores per year and Pepsi will be giving us on an average 79 crores per year," he said.
"So far our records of selling various properties of IPL has been very good. We have doubled, tripled or quadrupled the amount while selling some of the properties," Shukla said, adding that the fact that the bid by Pepsi was double that of DLF shows the grand success of IPL.
"PepsiCo are one of the largest sponsors in world sport and we look forward to working with them over the next seasons," he added.
Deepika Warrier, the Executive Director Marketing of Pepsico Beverages, said she was happy that the company has reaffirmed its commitment to cricket.
"We have been associated with cricket for the last 20 years. The IPL is a tremendous product. It is a brand which rivals any other sporting brand across the world," she said.
"I think it's an absolutely game changing format. The kind of eyeballs, interest and viewership that the IPL gets in India and across the world is of great interest to us.
"We are very happy with the kind of investment and are confident of getting returns from our investment we are making in the IPL and in cricket in India over the next five years.
"The deal is the reaffirmation of Pepsi foods in India as a market and it's also our absolute commitment to cricket. Together with BCCI, we will take cricket to greater heights in India. It's a leadership stance from Brand Pepsi," she added.
The title sponsor rights include a number of branding and other marketing benefits to be received by the title sponsor at every IPL match during the season as specifically outlined in the Invitation to Tender.
The BCCI had made it clear in its tender notice that the companies which intend to sell off the rights after winning the bid are ineligible to apply in the first place.
Only corporate entities, whether in India or abroad, which are interested in placing a bid for themselves and/or their holding or subsidiary company(ies), for the purpose of the advertisement and promotion of their own brands within their primary product or services categories were eligible to participate in this tender process and to submit bids.