Billionaire Gautam Adani's conglomerate will buy a majority stake in NDTV, marking its most high-profile media bet and setting the stage for a face-off in the sector with fellow tycoon Mukesh Ambani.
This acquisition marked “a significant milestone" for AMG Media Networks Ltd. that aims to “pave the path of new age media across platforms," Sanjay Pugalia, the company’s chief executive officer said in a statement
How Adani Group acquired stake in NDTV ?
Vishvapradhan Commercial Pvt. Ltd (VCPL), which owned convertible debentures (warrants that provide for the conversion of debt to equity) in RRPR Holding Pvt. Ltd that in turn owned 29.18% of NDTV Ltd, is a wholly-owned subsidiary of AMG Media Networks Ltd (AMNL), the media arm of Adani Enterprises Ltd (AEL). It had acquired the debentures in 2009-10 in return for a loan amounting to ₹404 crore it extended to the promoter holding company.
According to India’s securities law, an entity that acquires more than 25% of the equity in a publicly traded company must launch an open offer to acquire an additional 26% from public shareholders. Adani Group and Vishvapradhan on Tuesday announced an open offer at ₹294 per share (based on Sebi’s takeover guidelines), representing a 28% discount to NDTV’s ₹376 closing price on Tuesday.
On Monday, NDTV told exchanges in response to a media query that its promoters were not engaged in any talks for a stake sale. On Tuesday evening, Adani Enterprises first announced its wholly owned subsidiary Adani Media Networks acquired Vishvapradhan from Eminent Networks and Nextwave Televentures—entities linked to entrepreneur Mahendra Nahata.
Following this, the announcement came that that VCPL had exercised the convertible warrants and now owned 99.5% of RRPR Holdings and, in turn, 29.18% of the equity stake in NDTV. Alongside, Vishvapradhan and the Adani companies announced the open offer triggered by the acquisition.
NDTV founders Prannoy and Radhika Roy control 32.2% of shares in NDTV, while the public shareholders own 38.55%. The company posted revenues of ₹421 crore and a net profit of ₹85 crore in the year ended March 2022.
The 2009-10 transaction between Vishvapradhan and RRPR Holdings was subject to regulatory ire as the Securities and Exchanges Board of India (Sebi) held in a 2019 order that the loan agreement between the two entities amounted to a transferring of beneficial interest in NDTV and should have triggered an open offer by Vishvapradhan then.
The Adani group is reportedly exploring buying stakes in some local television and print news outlets, while a few have approached the conglomerate also to study potential deals.
