Adani group's NDTV open offer subscribed 32%; poised to be largest shareholder

Gautam Adani, the richest Asian and the founder chairman of Adani group, last month told the Financial Times that he intends to scale up NDTV.

December 04, 2022 09:37 pm | Updated 09:37 pm IST - New Delhi

A microphone of New Delhi Television (NDTV) is placed on a tripod. File

A microphone of New Delhi Television (NDTV) is placed on a tripod. File | Photo Credit: REUTERS

Billionaire Gautam Adani's group has found investors willing to sell over 53 lakh shares of NDTV despite the deep discount to the stock's current trading price, giving it the rights — which it may or may not exercise — to nominate a chairman of the broadcaster.

The open offer, made after Adani group acquired a little-known firm that gave it an indirect holding over 29.18% stake in New Delhi Television (NDTV), closes on December 5, according to a stock exchange notification.

Against the offer to buy 1.67 crore shares, or 26% of equity — from NDTV's minority investors at a price of ₹294 a piece, Adani group has received offers for 53.27 lakh shares, according to data available on the National Stock Exchange (NSE) website.

Corporate investors have offered the most at 39.34 lakh shares while retail investors have offered a little over 7 lakh shares. Qualified institutional buyers (QIBs) have tendered 6.86 lakh shares, according to the NSE data, which did not identify either the corporates or QIBs who have offered to sell their shares.

The offer price of ₹294 per share is a deep discount to the ₹414.40 closing price of NDTV stock on the BSE on Friday.

The shares tendered so far equal to 8.26% of NDTV. Together with 29.18% stake, Adani group has already acquired the ports-to-energy conglomerate at 37.44% stake — larger than 32.26% holding of founders Prannoy Roy and Radhika Roy.

Prior to Adani group's hostile takeover, promoters held 61.45% stake in NDTV. This included 1.88 crore shares or 29.18% held by RRPR Holding Pvt. Ltd.

The RRPR Holding is the firm that Adani group indirectly acquired in August — triggering a wider open offer to buy a further 26% in the media company.

Being the largest shareholder of NDTV would entitle Adani group to appoint at least two directors on the company board including its chairperson, according to market experts.

Mr. Roy currently is the chairperson of NDTV while his wife, Radhika is an executive director. (Mr. Roy owns 15.94% stake and Ms. Roy owns another 16.32%).

The Roys can remain as director on the NDTV board by virtue of their 32.26% stake, they said.

Gautam Adani, the richest Asian and the founder chairman of Adani group, last month told the Financial Times that he intends to scale up NDTV to make it an international media group and had asked Mr. Roy to remain as chair.

Mr. Roy can continue as chairman should he accept Adani's offer. But if he chooses to resign, Adani group will get the right to appoint a chairperson.

Among the public shareholders of NDTV is LTS Investment Fund, a Mauritius-based FPI with 9.75% holding. It is being speculated that this FPI may have tendered or will tender its shares in the open offer.

Last week, NDTV announced the resignation of Roys from the RRPR board but they continued on the NDTV board. NDTV will give Adani group a footprint in media space as part of its broader diversification spree that has led to expansion of the conglomerate beyond coal mining and ports into airports, data centres, cement and digital services.

In 2009, RRPR or Radhika Roy Prannoy Roy Holdings Private Limited, took an interest-free loan of ₹403 crore from a firm linked to Reliance Industries, that eventually ended up with a closely-held firm, Vishvapradhan Commercial Pvt Ltd (VCPL).

The loan allowed VCPL to convert warrants into shares of RRPR Holdings, which held a 29.18% stake in NDTV. Adani group, in August, acquired VCPL and sought conversion for the warrants arising from unpaid loans into equity.

NDTV initially said the move was "executed without any input from, conversation with, or consent of" its founders. But late last month, the conversion was agreed and Adani got 29.18% shares of NDTV.

Post takeover, Adani group appointed two of its executives — Sudipta Bhattacharya and Sanjay Pugalia — to the RRPR board. It also appointed to the board Senthil Chengalvarayan, a journalist who is an independent director at Quintillion Business Media, another media firm in which Adani bought a stake earlier this year.

Mr. Pugalia, a former journalist, is the chief executive officer and editor-in-chief of media initiatives at Adani group.

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