After Adani Group acquired 29 per cent stake in NDTV, Adani Group’s subsidiary Vishwapradhan Commercial Pvt Ltd (VCPL) has to seek approval from market regulator Securities and Exchange Board (SEBI), NDTV Ltd told stock markets.
The Adani Group cannot immediately become the owner of RRPR’s 29.18 per cent stake in NDTV Ltd.
NDTV Limited has cited the SEBI order dated November 27, 2020. In a statement to stock exchanges, NDTV founder-promoters Pranai Rai and Radhika Rai said SEBI has barred them from accessing and barring them from buying and selling.
And the deal, which expires in 2022, eventually leads to Adani acquiring a 29.18 percent stake in NDTV.
What happened in 2009 and 2010?
In 2009 and 2010, VCPL extended an interest-free loan of Rs 403.85 crore to RRPR Holding Pvt Ltd, owned by Royce.
Against this loan, RRPR issued warrants to VCPL, which entitled VCPL to convert into 99.9 percent equity in RRPR.
At that time it is said that Adani did not intervene.
To extend the loan to RRPR, VCPL raised funds from Reliance Strategic Ventures, a subsidiary of Mukesh Ambani-led Reliance Industries Ltd.
On Tuesday (August 23), the Adani Group announced that AMG Media Networks Ltd, a subsidiary of its flagship Adani Enterprises Ltd, has acquired VCPL for Rs 113.75 crore.
In a statement to the stock exchanges, it said, “Without any discussion with NDTV or its founder-promoters, a notice has been sent to them by VCPL stating that it (VCPL) has exercised its right to acquire 99.50% control.
RRPR is an advertiser-owned company holding 29.18% stake in NDTV. Meanwhile, Adani Group has announced an open offer to buy another 26 percent stake in NDTV.
SEBI Directive of 2020- Roy’s contribution?
The order said, “Partners Pranai Roy and Radhika Roy are bound to inform about the settlement of securities bought or sold in the cash section of recognized stock exchanges.
Any restriction or prohibition imposed by this order may take place only if there are any outstanding transactions pending on the date of this order.
The company is currently exercising its rights to convert into equities. Further, these types of transactions require regulatory approval as the interests of minority shareholders and other stakeholders must also be taken care of.
So there is nothing new in this. It is a procedure and the regulator will see that all rules and procedures are followed.”
What should Adani do to get a controlling stake in NDTV?
The present shareholders of the company are as follows:
Pranai Roy and Radhika Roy continue to hold 32.26 per cent stake in the company individually.
As of September 2020, the four shareholders – interconnected directors – collectively hold 7.11 percent of NDTV.
As of June 2022, GRD Securities held 2.8 percent, Aadesh Broking 1.5 percent, Trolia Agencies 1.48 percent and Confirm Realbuild 1.33 percent.
LTS Investment Fund owns 9.75 per cent stake in NDTV. The fund also holds 1.69 percent in Adani Enterprises and other group companies including Adani Power (1.09%), Adani Transmission (1.63%) and Adani Total Gas (1.27%).
If these two investors sell their shares in Adani’s open offer, it will take Adani Group’s stake in NDTV to over 46 percent. Some other stakeholders may also take this opportunity.
However, Adani Group’s current offer is significantly lower than the market price of NDTV shares, which was above Rs 400 per share on August 25.
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