Adani Acquires 29.18% stake in NDTV from Ambani - Launches open offer to Buy more

The Adani Group has indirectly acquired more than 29% of the news broadcaster NDTV. The Adani Group unit has also announced an open offer for an additional 26% stake at Rs 294-300 per share and the open offer will cost the Adani Group Rs 493 crore.

Former stakeholding structure of Roy’s in NDTV

The promoters and founders of NDTV, Prannoy Roy and Radhika Roy hold a little over 32% at a personal level in NDTV. Another promoter entity of NDTV called RRPR (Rekha Roy Prannoy Roy) holds around 29% of NDTV. It’s this 29% stake belonging to Rekha Roy and Pranoy Roy through RRPR that has been acquired by Vishwa Pradhan Commercial Ltd., a subsidiary of Adani Group.

The Ambani-Adani Connection

It all started in 2009 when the promoters of NDTV, Prannoy Roy, and Rekha Roy took a loan worth 403.85 crores from VCPL via their promoter company named RRPR. VCPL is a wholly owned subsidiary whose 100% shares are with AMG Media Network Limited which is a subsidiary company of Adani Group.

According to the loan agreement, VCPL owned convertible debentures in RRPR Holdings Pvt. Ltd. which are warrants that allow for debt to be converted into equity in case of non-repayment of the loan.

After acquiring a 100% stake in VCPL, the right to equity in RRPR has also been transferred to the Adani Group which he exercised and took over a 29% stake in NDTV. But the catch here is that these shares belonged to Reliance in the first place as VCPL in 2009 when the agreement was formed and acted as a subsidiary of Shinano RetaiL Pvt. Ltd. and it was a subsidiary of Reliance Industries.

Shinano Retail Pvt Ltd. at the time was a fully owned subsidiary of Reliance Industrial Investments and Holdings Ltd. (RIIHL). In 2012, the ownership of Shinano was transferred to Nextwave Televenture Pvt. Ltd. and Sky Blue Buildwell Pvt. Ltd. these companies had a connection with Mahendra Nahata who is the director at Reliance Jio Infocomm Ltd.

Till Adani Group struck an all-cash deal with Nextwave Televenture Pvt. Ltd. and Eminent Networks for Rs. 113.75 crores to acquire VCPL which ended up with Adani Group owning 29% of the NDTV company without any discussions with the promoters, NDTV’s takeover was inevitable since the Roys had diluted their shares long ago as the loan conditions were such that VCPL could convert the equity at any point of time during the tenure of the loan.

 

Current Stakeholding Pattern of NDTV

Technically, Reliance had been holding 29% NDTV for a long time when Adani Group bought it. Though Roys still holds a 32% stake in NDTV at a personal level this may change soon. According to SEBI rules, anyone with more than a 25% stake in a company can give an open offer to acquire more shares in a company and Adani Group said that they will give an open offer to other shareholders of NDTV AT Rs. 294- 300 per share.

If Adani Group is successful in acquiring additional 26% shares of NDTV then they will be the majority shareholders and technically owners of one of India’s reputed media groups.

NDTV’s Stance on the takeover                                  

NDTV has mentioned in their fillings to the exchanges that Adani Group did not consult or took any inputs of the promoters before taking over a 29% stake in NDTV. Although NDTV's official statement says that they were unaware of the takeover of 30% of the company till today but the terms of the loan that they took way back in 2009 imply that the company’s 29% stake could be diluted anytime during the course of the loan.

So we can say that this takeover of NDTV was on the cards and everything happened within the legal framework.NDTV shares are up by 42.17% since a month ago after there was news was circulating that Adani Group may take over NDTV and today when the news broke out it reached its all-time high at Rs. 388 per share.

This has been the second biggest takeover of a reputed media house after Reliance Industries acquired Network 18 in 2014 for an enormous sum of Rs 4000 crore. NDTV has mostly been critical of the Modi government in recent years and given the close ties between the Modi government and the Adani group it will be interesting how things shape up for NDTV in the future.

 

Popular reporter Ravish Kumar who has been the face of NDTV for last many years has decided to step down from NDTV after working in the news channel for more than two decades.

The decision came out a day after Prannoy Roy and Radhika Roy stepped down as directors of RRPR Holding Pvt. Ltd. (NDTV promoter group) after Adani takeover of NDTV by issuing an offer for sale for 26% of the stake in NDTV. Adani has already acquired a significant stake in NDTV by acquiring VPCL from Ambani.

Ravish Kumar himself made the announcement of his Youtube channel which could be his next destination as an independent journalist. In his illustrious career of over two decades in NDTV he has hosted popular programs such as Ravish ki Report, Prime Time, Hum Log, and Desh ki Baat and in his journey has been conferred with Ramnath Goenka Excellence in Journalism award twice along with Ramon Magsaysay Award in 2019.