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Adani-NDTV skirmish amplifies over stake purchase

IndiaAdani-NDTV skirmish amplifies over stake purchase

 Adani-NDTV skirmish amplifies over stake purchase as billionaire Adani-led Adani Group on Friday declared no prior approval was needed.

The Adani-led Adani Group did not feel that prior approval was needed from market regulator SEBI to acquire a 29 per cent stake in NDTV as stated by the media company founded and promoted by Prannoy Roy and Radhika Roy.

In a regulatory filing, Adani Group said that the contentions raised by RRPR, the promoter group company of NDTV, are unfounded, legally untenable and devoid of merit. “RRPR is therefore bound to immediately perform its obligation and allot the equity shares as specified in the Warrant Exercise Notice,” Adani said in the filing.

Adani group earlier this week announced that its media arm AMG Media Networks Ltd (AMNL) would indirectly acquire 29.18 per cent stake in NDTV and launch an open offer. The business conglomerate said that AMNL’s wholly owned subsidiary Vishvapradhan Commercial Private Limited (VCPL) holds warrants of RRPR Holding Private Limited (RRPR), a promoter group company of NDTV, entitling it to convert them into a 99.99 per cent stake in RRPR.

NDTV, however, soon informed the stock exchanges that neither the media firm nor its founder-promoters were informed about the transaction. It later said that its promoters Prannoy Roy and Radhika Roy are banned from buying or selling of shares or being associated with the securities market. Therefore, Adani Group would need to take approval from the market regulator Securities and Exchange Board of India (SEBI) to complete the transaction.

Adani has challenged the stand taken by NDTV to presumably block the deal. “RRPR is not a party to the SEBI Order dated 27th November 2020 (“SEBI Order”). Consequently, the restraints as pointed out by RRPR in paragraphs 111(b) and 112 of the SEBI Order do not apply to RRPR. The Warrant Exercise Notice has been issued by VCPL under a contract which is binding on RRPR. RRPR is therefore obligated to comply with its contractual obligations,” Adani said on Friday.

NDTV Was Founded by India’s most famous TV news personalities, Prannoy Roy, and his Wife Radhika Roy in 1988

NDTV was founded by one of India’s most famous TV news personalities, Prannoy Roy, and his wife in 1988. Other than TV news channels, the group also runs online news websites.

On Monday, NDTV said in a stock exchange disclosure that Radhika and Prannoy Roy were not in discussions with any entity for a change in ownership or divestment of their stake in NDTV.  They individually and through their company continue to hold 61.45 percent of NDTV, the statement said.

In March, Adani, who is Asia’s richest man, made his first stake in the media sector by taking a minority stake in local digital business news platform Quintillion. But the proposed NDTV transaction marks Adani’s highest-profile media bet to date.

“NDTV is the most suitable broadcast and digital platform to deliver on our vision,” Adani Group executive Sanjay Pugalia said in the statement.

The move could set the scene for Adani to face off in the sector with fellow tycoon Mukesh Ambani.  Ambani, chairman of oil-to-telecom conglomerate Reliance Industries, controls Network18, which runs business channels including CNBC TV18.

Adani Group has several publicly-listed companies in sectors including airports and ports, power generation and transmission, and coal and gas trading.

India’s TV news industry has a plethora of channels, 70 percent of this market was dominated by Hindi news, according to a note by Elara Capital. Other than Ambani, the other big player is Times Group which runs many news channels and newspapers.

Elara Capital said Adani’s planned bid to control NDTV was at “very premium valuations” but added, “this move will enable a large corporate house backing for a news channel”.

Adani Group said NDTV had recorded a revenue of 4.21 billion Indian rupees ($53m) and a net profit of 850 million rupees ($10.6m) in the fiscal year that ended in March 2022, with minor debt.

 

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