Gautam Adani, the Indian billionaire industrialist, created headlines today while showing his keen interest in India’s Media and Entertainment Industry, as his companies have acquired a 29 per cent stake in NDTV. Moreover, they have made an additional open offer to acquire 26 per cent from shareholders, as necessitated by law.
Adani Acquires 29 Percent of NDTV
Adani Group acquires 29 per cent of NDTV indirectly by acquiring a hundred per cent of 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”, mentioned by livemint. VPCL got debentures in place of a loan calculated to be ₹404 Cr to the RRPR in 2009-10, an entity that owned 29 per cent in NDTV.
Indian Security Law
As per India’s security law, a company that acquires over 25 per cent stake in a public traded entity has to make an offer of an additional 26 per cent to acquire it from public shareholders. Hence, Adani Group and VPCL made an additional open offer to acquire 26 per cent more, on Tuesday. They offer a price of ₹294 per share, as per SEBI’s takeover regulations.
This acquisition triggers the immediate protest from NDTV, they said in a recent filing to exchanges, on Tuesday, that Adani group companies have not even consulted with its promoters.
“The NDTV founders and the company would like to make it clear that this exercise of rights by VCPL was executed without any input from, conversation with, or consent of the NDTV founders, who, like NDTV, have been made aware of this exercise of rights only today.”
Here Are The Events That Led To NDTV’s Acquisition:
- In 2009-10, VPCL, a business entity related to RIL, lent a loan of ₹403.85 Cr to RRPR Holdings, another business entity that owned 29 per cent of NDTV.
- Then, VPCL was acquired by Eminent Private Networks Ltd or EN and Nextwave Ventures Ltd or (NV).
- On August 23, 2022, AMG Media Networks Ltd., one of the companies of Adani Group, acquired 100 per cent of VPCL from both EN and NV for ₹113.7 Cr.
- Then, VPCL used the rights to convert their loan, which they lent to RRPR in 2009-10, into ownership which leads VPCL to own 29 per cent of NDTV.
- Now, VPCL and Adani Group have made an open offer to acquire an additional 26 percent of NDTV from shareholders.
As per the NDTV promoters, they were not consulted about this matter even a bit.