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Adani to acquire NDTV, Prannoy Roy could lose ownership

Adani to acquire NDTV: The television channel NDTV Ltd. was acquired by the Gautam Adani-led Adani Group and Vishvapradhan Commercial Pvt Ltd. The conglomerate, which has a wide range of business interests, announced that it will make an open offer to acquire an additional 26% of the company as required by SEBI. The Adani Group plans to increase its media investment by developing a television station after announcing in May of this year that it would buy 49% of the online news site BloombergQuint.

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Adani to acquire NDTV: Key Points

  • The Adani Group, which announced in May of this year that it would purchase 49% of digital news source BloombergQuint, wants to increase its media investment by launching a television channel.
  • The NDTV founders, Prannoy Roy and Radhika Roy, were not consulted, had no conversations with, or gave their agreement prior to the transaction, according to a notice to the stock exchanges. The Prannoy Roy and Radhika Roy family still owns 32.26 percent of NDTV.
  • The Adani Group stated in a press release that its flagship Adani Enterprises Ltd’s subsidiary AMG Media Networks Ltd purchased Vishvapradhan Commercial Pvt Ltd (VCPL) on Tuesday.
  • Vishvapradhan Commercial Pvt Ltd had lent NDTV promoter company RRPR Holding Pvt Ltd Rs 403.85 crore in 2009 and 2010. Prannoy Roy and Radhika Roy were the owners of RRPR Holding.
  • In exchange for this interest-free loan, RRPR, Prannoy Roy, gave Vishvapradhan Commercial Pvt Ltd warrants that could be exchanged for a 99.9% ownership in RRPR. The RRPR  (Prannoy Roy and Radhika Roy) owns a 29.18% interest in NDTV.
  • Notably, Vishvapradhan Commercial Pvt Ltd had raised money from Reliance Strategic Ventures, a fully-owned subsidiary of Mukesh Ambani-led Reliance Industries Ltd., in order to issue the loan to RRPR (company of Prannoy Roy and Radhika Roy)

Adani to acquire NDTV: Vishvapradhan Commercial Pvt Ltd

  • “Without any conversation with NDTV or its founder-promoters, a notice has been delivered upon them by VCPL, claiming that it (Vishvapradhan Commercial Pvt Ltd) has exercised its rights to acquire 99.50% control of RRPR (company of Prannoy Roy and Radhika Roy), the promoter-owned firm that owns 29.18% of NDTV,” NDTV Ltd. stated in a statement to the stock exchanges.
  • The Adani Group made an open offer to purchase an additional 26% of Vishvapradhan Commercial Pvt Ltd after purchasing it for Rs 113.75 crore.
  • Per share, the group is providing Rs 294. On the BSE, the NDTV stock closed on Tuesday at Rs 366.20, up 2.6% from the previous day’s finish.
  • Adani Group-owned Vishvapradhan Commercial Pvt Ltd reported the addition of three directors to its board on August 23 in its most recent filing with the Registrar of Companies: Sanjay Pugalia, Senthil Chengalvarayan, and Sudipta Bhattacharya. The CEO of AMG Media Networks Ltd. is Pugalia.

Will Adani be able to acquire NDTV’s majority ownership?

  • Although the Adani Group currently owns a larger portion of NDTV than the Roys, market analysts claimed the business giant has an advantage.
  • Since September 2020, four shareholders with connected directors have a combined 7.11 percent ownership stake in NDTV.
  • As of June 2022, Drolia Agencies owned 1.48% of the company, followed by GRD Securities (2.8%), Adesh Broking (1.5%), and Confirm Realbuild (1.33%).
  • In addition to owning 9.75% of NDTV, LTS Investment Fund also holds 1.69 % of Adani Enterprises, 1.09% of Adani Power, 1.63% of Adani Transmission, and 1.27% of Adani Total Gas.
  • The Adani Group would own more than 46% of NDTV if these two groups of investors sold their shares in the open offer.

Adani to acquire NDTV: Why does Adani want to be NDTV’s owner?

Adani Group engaged journalist Pugalia to run its media venture, Adani Media Ventures, last September with the intention of breaking into the mainstream media. Pugalia presided over Quint Digital Media, the company that ran BloombergQuint. “AMNL aims to provide information and expertise to Indian people, customers, and foreigners with an interest in India. NDTV is the best broadcast and digital platform to carry out our goal due to its dominant position in news and strong and diverse reach across genres and geographies. Pugalia stated in the release, “We look forward to enhancing NDTV’s leadership in news delivery.

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