Amid the Adani Group’s open offer to acquire New Delhi Television Limited (NDTV), Prannoy Roy and Radhika Roy have resigned as directors on the board of RRPR Holding Private Limited (RRPRH) with effect from November 29. Prannoy Roy is the Chairperson of NDTV and Radhika Roy is an Executive Director.
The board of RRPR Holding has approved the appointment of Sudipta Bhattacharya, Sanjay Pugalia and Senthil Sinniah Chengalvarayan as Directors on its board with immediate effect, NDTV said in an exchange filing.
In a letter on Tuesday, NDTV told the Bombay Stock Exchange, “NDTV has been informed by the Promoter Group vehicle RRPR Holding Private Limited (RRPRH) that the Board of Directors at the meeting held today i.e. November 29, 2022, have approved: 1. Appointment of Mr. Sudipta Bhattacharya (DIN: 0006817333), Mr. Sanjay Pugalia (DIN: 0008360398), and Mr. Senthil Sinniah Chengalvarayan (DIN: 02330757), as Directors on the Board of RRPRH, with immediate effect; and 2. Resignation of Dr. Prannoy Roy (DIN: 00025576) and Mrs. Radhika Roy (DIN: 00025625) as Directors on the Board of RRPRH, with effect from the close of business hours of November 29, 2022.”
The RRPRH is named after the two Roys.
On August 23, Gautam Adani-led Adani Group, a conglomerate with diverse business interests, acquired 29.18 per cent stake in television channel NDTV Ltd, and said it would launch an open offer as required by the Securities and Exchange Board of India (SEBI) to buy another 26 per cent in the company. On November 22, the Adani Group launched its open offer, which is to remain open until December 5, 2022.
According to the SEBI (Substantial Acquisition of Shares and Takeovers) Rules, an open offer is made by the acquirer to the shareholders of the target company inviting them to tender their shares at a particular price, and is triggered if an acquirer holds more than 25 per cent of the public shareholding in the company.
So, in the case of NDTV, as Adani Group has emerged as a large shareholder with 29.18 per cent shareholding and is likely to change the control structure of the company, it has to make an open offer to buy another 26 per cent stake so that minority shareholders willing to exit the company may tender their shares.
On Monday, Reuters reported that an entity backed by NDTV founders had issued shares to a unit of the Adani Group, taking the conglomerate a step closer to acquiring the media firm.
The Roys could have launched a counter offer to stop Adani, but that would have required significant financial muscle.
In 2009 and 2010, VCPL gave an interest-free loan of Rs 403.85 crore to RRPR Holding Pvt Ltd, owned by the Roys. Against this loan, RRPR issued warrants to VCPL, which entitled VCPL to convert them into a 99.9 per cent stake in RRPR.
Adani was not in the picture at the time. In order to extend the loan to RRPR, VCPL had raised funds from Reliance Strategic Ventures, a wholly owned subsidiary of Mukesh Ambani-led Reliance Industries Ltd.
On August 23, the Adani Group announced that AMG Media Networks Ltd, a subsidiary of its flagship Adani Enterprises Ltd, had bought VCPL for Rs 113.75 crore. The loan had not been repaid by then. NDTV Ltd had then said in a statement to the stock exchanges that the CPL notice had been served upon them “without any discussion with NDTV or its founder-promoters.”
“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,” their statement said.
The Roys directly hold 32.36% in the company; Prannoy’s stakes are 15.94%, while Radhika holds 16.32%.
RRPL Holding, the promoter group vehicle of NDTV, holds 29.18 per cent stake in NDTV, which is being taken over by the Adani group. If the Adanis manage to get the required 26 per cent stake through its open offer, the group’s total stake will go up to 55.18 per cent, enabling it to take management control of the target company (NDTV). If it fails to get a 50 per cent stake, they have the option to buy shares from other institutional investors.
The single-largest shareholder of NDTV, besides Prannoy and Radhika and the Adani Group, is Mauritius-registered foreign portfolio investor (FPI) LTS Investment Fund Ltd with a 9.75% stake. It bought this stake in the quarter ending September 2016.
The next big FPI shareholder in NDTV is Mauritius-based Vikasa India EIF I Fund with a 4.42% stake in NDTV it acquired in the quarter ending September 2021. Other major shareholders include GRD Securities (2.82%), Adesh Broking House (1.5%), Drolia Agencies (1.48%) and Confirm Realbuild (1.33%).