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Adani steps into NDTV with 29%, to launch open offer for 26% more

In a notice to stock exchanges, NDTV said the acquisition was executed without any input from, conversation with, or consent of NDTV founders Prannoy Roy and Radhika Roy. The two continue to hold 32.26 per cent in NDTV.

In a notice to stock exchanges, NDTV said the acquisition was executed without any input from, conversation with, or consent of NDTV founders Prannoy Roy and Radhika Roy.

GAUTAM ADANI-led Adani Group, a conglomerate with diverse business interests, Tuesday acquired 29.18 per cent stake in television channel NDTV Ltd, and said it will launch an open offer as required by the Securities and Exchange Board of India (SEBI) to buy another 26 per cent in the company.

The Adani Group — which in May this year said it will acquire 49 per cent in digital news provider BloombergQuint — aims to further boost its media investment with a television channel under its umbrella. In a notice to stock exchanges, NDTV said the acquisition was executed without any input from, conversation with, or consent of NDTV founders Prannoy Roy and Radhika Roy. The two continue to hold 32.26 per cent in NDTV.

Hours after the announcement, NDTV issued a statement saying the move by the Adani group “was executed without any input from, conversation with, or consent of the NDTV founders.”

In a press statement, the Adani Group said its flagship Adani Enterprises Ltd’s subsidiary AMG Media Networks Ltd Tuesday bought Vishvapradhan Commercial Pvt Ltd (VCPL), which had in 2009 and 2010 loaned Rs 403.85 crore to NDTV promoter company RRPR Holding Pvt Ltd. RRPR Holding was owned by the Roys.

Against this interest-free loan, RRPR issued warrants to VCPL entitling it to convert them into a 99.9 per cent stake in RRPR. RRPR holds 29.18 per cent stake in NDTV. Notably, VCPL had raised funds from Reliance Strategic Ventures, a wholly-owned subsidiary of Mukesh Ambani-led Reliance Industries Ltd, to extend the loan to RRPR.

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In a statement to the stock exchanges, NDTV Ltd said: “Without any discussion with NDTV or its founder-promoters, a notice has been served upon them by VCPL, stating that it (VCPL) has exercised its rights to acquire 99.50% control of RRPR, the promoter-owned company that owns 29.18% of NDTV.”

Subsequent to VCPL’s acquisition for Rs 113.75 crore, the Adani Group announced an open offer for buying another 26 per cent stake. The group is offering Rs 294 per share. The NDTV stock closed Tuesday at Rs 366.20 on the BSE, 2.6 per cent higher than its previous day’s close.

In its latest filing to the Registrar of Companies on August 23, Adani Group-owned VCPL announced the appointment of three directors on its board – Sanjay Pugalia, Senthil Chengalvarayan and Sudipta Bhattacharya. Pugalia is the CEO of AMG Media Networks Ltd.

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VCPL’s loan agreement with RRPR had attracted regulatory ire with SEBI launching an inquiry in 2017. In its order passed in June 2018, the market regulator noted that RRPR had taken the loan from VCPL to repay its previous loan of Rs 375 crore to ICICI Bank, which in turn was taken to repay a Rs 540 crore loan taken from Indiabulls Financial Services in December 2008. This order was, however, quashed by the Securities Appellate Tribunal in July this year

In its order, SEBI had in June 2018 pointed out that “the takeover exercise has been conveniently couched as a loan agreement with the predominant intention of the Noticee (VCPL) being to acquire control over NDTV without contemplating any repayment of the loan, whatsoever, from the Promoters or Borrowers.”

The regulator had also then ordered VCPL to make an open offer for NDTV, and penalised NDTV and RRPR for not disclosing the loan to the company’s shareholders. Besides quashing this Sebi order, the SAT had also reduced the penalties on RRPR and NDTV were – from Rs 25 crore to Rs 5 crore in case of RRPR, and from Rs 5 crore to Rs 10 lakh in case of NDTV.

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The Adani Group, which has been eyeing entry into the mainstream media space, had hired journalist Sanjay Pugalia last September to lead its media company, Adani Media Ventures. Pugalia was the president of Quint Digital Media, which operated BloombergQuint. “AMNL seeks to empower Indian citizens, consumers and those interested in India, with information and knowledge. With its leading position in news and its strong and diverse reach across genres and geographies, NDTV is the most suitable broadcast and digital platform to deliver on our vision. We look forward to strengthening NDTV’s leadership in news delivery,” Pugalia said in the statement.

Though the Roys hold more than the Adani Group in NDTV as of now, market experts said the business conglomerate holds an edge. Since September 2020, four shareholders who have interlinked directors, cumulatively own 7.11 per cent in NDTV. As of June 2022, Drolia Agencies owns 1.48 per cent stake, GRD Securities 2.8 per cent, Adesh Broking 1.5 per cent and Confirm Realbuild 1.33 per cent.

LTS Investment Fund which owns 9.75 per cent in NDTV, also owns 1.69 per cent in Adani Enterprises and also in other group companies including Adani Power 1.09%, Adani Transmission 1.63% and Adani Total Gas (1.27%). If these two sets of investors sell their shares in the open offer, it would take Adani Group’s shareholding in NDTV to over 46 per cent.

First published on: 23-08-2022 at 06:03:50 pm
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