NDTV is being taken over by Adani without the Roys’ consent
NDTV was controlled by Mukhesh Ambani’s Reliance through Gautam Adani’s media venture.
NDTV shares will be acquired by Adani Enterprises‘ media arm, led by the fourth richest person Gautam Adani, in an indirect deal over the next two days. In connection with the agreement, the Adani group is open to acquiring another 26 percent of the company, taking mass ownership of the company, and excluding Radhika and Prannoy Roy, the company’s founders and supporters.
The process will end once Adani, who has been friends with PM Narendra Modi for decades, acquires one of India’s most respected news brands once the process is complete.
For nearly a year, rumors have swirled around Adani’s acquisition of NDTV, but they were dismissed by the Roys. According to a statement issued by NDTV last September, the company is not in discussions now or has been with any entity regarding a change in ownership or divestment in any form, and the founder-promoters, Radhika and Prannoy Roy remain in control of the company with 61.45 percent ownership.
NDTV stated that “unsubstantiated rumors cannot be controlled by it, nor do we participate in baseless speculation.”
An NDTV statement sent to the stock exchanges on August 22 made a similar statement. Radhika and Prannoy Roy have not been in talks with any entity for a change in ownership or divestment of their stake in NDTV, they replied in response to a journalist’s question about whether they were selling their stake through RRPR Holding Private Limited. Together, the two of them own 61.45% of NDTV’s total paid-up share capital through their company, RRPR Holding Private Limited.”
The Roys weren’t consulted about the ownership change. In this deal, the shell company Vishvapradhan Commercial Private Limited, or VCPL, which has been around for 14 years, possesses no investments other than some debt issued by RRPR, NDTV’s promoter entity. RRPR took a loan of Rs 403.85 crore from VCPL on behalf of Radhika and Prannoy Roy in 2009, which gave VCPL rights to 99.99% of RRPR shares.
In a memo sent to staff, NDTV Group president Suparna Singh confirmed the news. Radhika and Prannoy’s company RRPR has been acquired by VCPL, which owns 29% of NDTV. They were not notified or agreed to this acquisition. In 2009-10, a loan agreement was signed. NDTV still holds 32% of the shares owned by Radhika and Prannoy.”
Many regulatory and legal processes are being assessed by the company, she said.
As reported earlier, Mukesh Ambani‘s Reliance Industries subsidiaries made the VCPL loan to RRPR through a chain of transactions, which effectively made Reliance the controlling party of RRPR.
As a subsidiary of Reliance, Shinano Retail provided the money that VCPL gave to RRPR. Reliance Jio Infocomm chairman Mahendra Nahata has given VCPL Rs 50 crore, while Shinano has brought back all of its Rs 403.85 crore. In its latest filing with the registrar of companies for March 2021, the VCPL showed that it still owed Eminent debentures worth Rs 403.85 crore, despite being an affiliate of Nextwave Televentures, also associated with Nahata.
As the largest shareholder in NDTV, RRPR owns 29.18 percent of the company’s shares. Radhika Roy and Prannoy each own 16.32 percent of NDTV. With 61.45 percent of the company’s shares, the Roys and RRPR form the company’s promoter group.
The cart was upended on Tuesday by Adani.
An all-cash deal worth Rs 113,74,61,990 was announced by Adani Enterprises in which Nextwave Televentures Private Limited and Eminent Networks Private Limited bought VCPL from its owners. In a filing to the stock exchanges, AMG Media Networks Limited announced in its filing that VCPL was the wholly owned subsidiary of Adani Enterprises.
As the CEO of AMG Media Networks, Sanjay Pugalia said, “NDTV is the most suitable broadcast and digital platform to meet our vision because of its leading position in news and its strong reach across genres and geographies.” As NDTV continues to lead in the news delivery industry, we look forward to strengthening its leadership.
A warrant exercise notice for the conversion of 1,990,000 warrants into 1,990,000 equity shares representing 99.5% of RRPR’s equity share capital was issued by Adani Enterprises on Tuesday since VCPL owned warrants of RRPR.
“A mass share of RRPR’s equity capital may be acquired by VCPL up to 99.99% at any time and 100% can be acquired through either route. (i) the issuance of further warrants; and (ii) Mr. Prannoy Roy and Mrs. Radhika Roy have a purchase option to receive all their shares in RRPR.”
AMG Media Network will own 29.18 percent of NDTV after RRPR allows 99.50 percent of its shares to VCPL. As per market regulations, AMG Media Network is showing an open give to Adani Enterprises, as it gives the company over 25 percent of its control. The Adani group has asked the public shareholders for 26 percent more shares than it could have with only 20 percent.
The open give for 26 percent shares from Adani would cost Rs 492.8 crore at Rs 294 per share. It would cost Adani a little over Rs 605 crore to achieve the 26 percent shares. Before the report of the deal, NDTV’s stock closed at Rs 376.55. Adani can buy the shares in the open give even though Roys still holds around 32 percent of NDTV’s shares.
If the Roys can buy more shares from the public shareholders than Adani, they can prevent a takeover by Adani.
Shareholders outside the promoter group can sell their shares to Adani under his open offer. These shareholders include two of NDTV’s most important foreign investors, which own 9.75 percent of the company’s shares, and 4.42 percent are owned by Vikasa India EIF I Fund. Mauritius is home to both of these investors. A total of Rs 19,328 crore was invested by the LTS Investment Fund in 13 Indian companies, with nearly 98 percent of that amount invested in four Adani group companies.
A total of 29,691 people and 947 entities own 23.85 percent of shares in NDTV, along with 29,691 people investing less than Rs 2 lakh each.
In the last few months, AMG Media Networks has made two major investments in the media space. For an undisclosed amount, the company bought 49 percent of Raghav Bahl’s Quintillion Business Media Private Limited.
NDTV’s ownership by Adani may cause a seismic shift in TV news. The NDTV channel is one of the last independent media platforms criticizing the government, despite not collecting viewers as Republic TV, Times Now, or India Today. There is bound to be an important impact on mainstream TV news diversity due to the drastic ownership change to a close connection of Narendra Modi.
edited and proofread by nikita sharma
