Adani’s open offer for 26% stake in NDTV

Adani Group will make its open offer on October 17 to acquire an additional 26% (1.67 crore shares) in media firm NDTV. For this, the price has been fixed at Rs 294 per share. The open offer will close on 1st November.

This information has been given by JM Financial, which is managing the offer. If it is fully subscribed at Rs 294, the total share of Adani Group will become 55%. This open offer is for Rs 492.81 crore.

On August 23, the Adani Group acquired a 29.18% stake in NDTV through the acquisition of VCPL, which holds a 99.99% stake in RRPR Holding. Subsequently, the Adani Group firms – Vishwapradhan Commercial Private Limited (VCPL) have proposed to acquire an additional 26% along with AMG Media Networks and Adani Enterprises.

Following the announcement of acquiring a 29.18% stake in NDTV, NDTV had said that the deal cannot proceed without SEBI’s permission. He said that in an order passed on November 27, 2020, SEBI had banned the founders of NDTV – Radhika and Prannoy Roy from the securities market for 2 years. This ban will end on 26 November 2022.

However, the Adani Group rejected this claim of NDTV. He said the promoter unit RRPR holding is not part of the regulator’s order barring founder promoters Prannoy and Radhika Roy from trading in the securities market. VCPL had said that RRPR is not a party to the SEBI order dated November 27, 2020, and the restrictions do not apply to it.

5 Important points

  • RRPR Holding is the promoter company of NDTV. Vishwapradhan Commercial Private Limited (VCPL) is a subsidiary of AMG Media Network Limited (AMNL). AMNL is a subsidiary of Adani Enterprises Limited (AEL). AEL is the flagship company of the Adani Group. Accordingly, the control of VCPL is with Adani Enterprises.
  • RRPR Holding Private Limited (RRPR stands for Radhika Roy, Prannoy Roy), the promoter company of NDTV, had taken a corporate loan of Rs 403.85 crore from VCPL in 2009-10 to repay the second debt. In lieu of this loan, VCPL got RRPR warrants. Warrants can be converted into shares as per rules.
  • Under the same authority, VCPL issued notice on 23 August for the conversion of 1,990,000 warrants into 1,990,000 shares. As per the terms of the warrant exercise, RRPR was to allot the shares to VCPL within 2 days of the notice i.e. by August 25. However, NDTV expressed its inability to do so, citing the Sebi order of 2020.
  • Since RRPR is the promoter of NDTV and holds a 29.18% stake (18,813,928 shares) in NDTV, the Adani Group has indirectly got a 29.18% stake in NDTV. According to the rules of SEBI, whenever a company has more than 25% shares of another company, then it has to bring an open offer.
  • VCPL has entered into an open offer with AMNL and Adani Enterprises for an additional 16,762,530 shares of NDTV. The open offer price of the shares is Rs 294. Right now the share price of NDTV is around Rs 471.50. When Adani Group was informed about this takeover on 23 August, the share price was close to Rs 376.

Source: Bhaskar News