The left-handed 26-year-old was the first lot on the block at the sale in Mumbai, and was the object of a bidding war.
Nita Ambani -- who is the wife of Asia's richest man, Mukesh Ambani, and owns the Mumbai Indians franchise -- placed several bids for Mandhana's services before the Royal Challengers Bangalore prevailed.
The cash-rich Indian Premier League has transformed the fortunes of cricket globally, and the women's version could rapidly become one of the world's biggest money-spinners in women's sport.
"I was always glued to men's auction," a beaming Mandhana said afterwards. "It's such a big event to have an auction of this sort."
Australian all-rounder Ash Gardner was the second most expensive player in the first batch of sales, with Gujarat Giants paying $387,000 for her.
Royal Challengers Bangalore also bagged Ellyse Perry of Australia for $205,000 and Sophie Devine of New Zealand for her base price of $60,000.
"We're very happy to get such quality players," said Mike Hesson, director of cricket operations for the Bangalore franchise. "It was a dream result for us."
The limited available data on women players had challenged the teams ahead of the auction, he added.
"You can't just sit on your phone and search Cricinfo and find out about people. It's more about being able to go out, being able to get a number of different eyes on players, so you can validate your information."
Delhi Capitals co-owner Parth Jindal described himself as "a follower of the women's game".
"But apart from the Indian players and a couple of the legendary players from the other teams, I did not know many of the names, but it's as competitive, it's as tricky," he told reporters.
"Some of the skill sets are even different from the men's. You see a lot more all-rounders in this game than you do in the men's game."
English all-rounder Nat Sciver-Brunt was sold for around $387,000 to Mumbai Indians, while spinner Sophie Ecclestone went to UP Warriorz for $220,000.
But England skipper Heather Knight went unsold in the initial rounds of the auction -- although she could come up for bidding again later.
The franchise rights for the five women's teams were auctioned off in January for $572.5 million, while media rights for the first five seasons of the new league were sold to Viacom18 for $116.7 million.
The two deals made the WPL the second most valuable women's league, after the WNBA women's basketball league, according to local media reports.
The WNBA, which held its inaugural season in 1997, is reportedly valued at $1 billion.
A total of 449 players were up for auction on Monday, but only up to 90 will secure spots in the tournament, with the five franchises buying a maximum of 18 players each.
A total salary cap of $1.45 million applies to each team in the tournament, which will be held in Mumbai and Navi Mumbai from March 4 to 26.
The WPL comes as efforts grow to expand the women's game globally, and Australia's Gardner said ahead of the auction that she had dreamed about the event.
"That's how much I've been thinking about it," she said at the T20 World Cup currently underway in South Africa, calling it "a huge moment for women's cricket" that would have a "global impact".
India's Jemimah Rodrigues was sold to Delhi Capitals for $266,000. She played a match-winning knock against Pakistan in the T20 World Cup on Sunday, when she said the WPL was "going to change a lot for women's cricket in India".
Her franchise also bagged India's 19-year-old T20 batting sensation Shafali Verma for $242,000 and Australia's Meg Lanning for $133,000.
© 2023 AFP