Work in Progress

Post the open offer, the Adani Group holds 37.5 per cent in NDTV while the Roys jointly own 32.3 per cent

▶ THE OPEN OFFER for 26 per cent stake in New Delhi Television (NDTV) by the Gautam Adani-led Adani Group had its share of surprises. Of the 16.76 million shares which formed the open offer, 5.33 million or 32 per cent of the total offer size, was tendered. Interestingly, while the offer price was `294 per share, the prevailing rate in the market was `393.90, on December 5, the last day of the open offer. Post the offer, the Adani Group’s stake in NDTV is pegged at around 37.5 per cent, making it the single largest shareholder in the company.

In August, the Adani Group had acquired an indirect 29.18 per cent stake in NDTV—a company promoted by Prannoy Roy and Radhika Roy—by acquiring the shares of Vishvapradhan Commercial Private Limited (VCPL)—which, by way of conversion of warrants, got it 99.5 per cent stake in RRPR Holding, a promoter group entity. The Roys directly hold 32.3 per cent, which is valued at `820 crore, as of December 5.

Earlier, NDTV, in a communiqué to the stock exchanges, stated that its promoter entity RRPR Holding has issued equity shares amounting to 99.5 per cent of its shares to VCPL. Now, VCPL is a wholly owned subsidiary of AMG Media Networks, which houses the media business of the Adani Group.

On the open offer, Arun Kejriwal, Founder of Kejriwal Research & Investment Services, says that by logic, the shares should be sold in the open market in a scenario such as this. “However, there are instances when friendly intermediaries accumulate stock. They may prefer to tender this in an open offer even at a price disadvantage,” he says.

The list of NDTV’s shareholders include little-known names such as Confirm Realbuild, Adesh Broking House, Grid Securities and Drolia Agencies that own more than one per cent each, with their cumulative holding pegged at 7.13 per cent or close to 4.6 million shares. Of these, only Drolia Agencies and Adesh Broking House have held the shares for at least a year while the other two entities are new entrants.

With the Adani Group’s stake of 37.5 per cent in NDTV, they will be up against the Roys, who hold 32.3 per cent. What will be the way forward?

Shriram Subramanian, Founder & Managing Director of InGovern, a proxy advisory firm, says that the fact that the Adani Group would be in control of NDTV is a fait accompli. “They will have the board and management at their call. The Roys may have to exit their holding in the company. It is not possible for them to fight the Adani Group with their shareholding,” he says.

Both Prannoy Roy and Radhika Roy resigned from the board of RRPR Holding on November 29. Media veterans Sanjay Pugalia and Senthil Chengalvarayan, along with Sudipta Bhattacharya (CEO of Adani Group North America, and CTO, Adani Group), were appointed directors in the firm.

The future ownership of NDTV is still a work in progress. The story is still unfolding.