Adani - NDTV takeover

Adani Group on NDTV open offer – “Timelines maybe revised”

Amidst regulatory uncertainty in an attempt by Adani Group to acquire shares in NDTV, the multinational conglomerate company owned by Gautam  Adani on Friday said that the timeline laid out for the open offer to acquire a 26% stake in NDTV is tentative and might be revised later.

On August 29th, Vishvapradhan Commercial Private Limited (acquired by Adani Group a few days ago) released a detailed public statement. The public statement contained information regarding the intentions of VCPL and Adani Group to acquire a 26 per cent stake in NDTV through an open offer. The statement also mentioned a few dates which were tentative timelines through which the open offer would be operated.

The open offer for a 26% stake in NDTV was supposed to be announced in newspapers on October 14th. October 17th to November 1st was tentatively scheduled as tendering period.

Today, in a filing with the Bombay Stock Exchange, Adani Group stated that the timelines mentioned by the management of VCPL in DPS are indicative. The filing also stated that the dates provided by the earlier public statements were all subject to receiving approvals from statutory and regulatory authorities. Indirectly, the Gautam Adani-led company is stating that the dates of the open offers might change if there’s any delay in procedures to get approvals from the authorities.

All of this started on August 23rd when Adani Group announced that it has acquired a 29.18 per cent stake in NDTV (New Delhi Television Limited) founded and owned by Radhika Roy and Prannoy Roy.

Adani Group also announced that it’ll launch an open offer to acquire a 26% additional stake in the media company. This would result in subsidiary entities of Adani Group controlling the majority shareholding in the news company.

The acquisition of 29.18% was operated in such a way that AMG Media Network Limited of Adani Group, bought a company named VCPL. This VCPL had earlier given a 400 crore loan to RRPR Holdings Limited, which is one of the majority shareholders in NDTV.

The loan shelled out by VCPL to RRPR was operating in such a way that RRPR would issue share warrants against 99.9 per cent of the company for 400+ crore rupees as a loan on behalf of NDTV.

After the acquisition of VCPL by Adani Group, Adani Group decided to exercise the rights on share warrants which automatically made Adani Group through VCPL, the owner of RRPR Holdings. Since RRPR Holdings were having 29.18% stake in NDTV, Adani Group got indirect control over that stake.

Following the acquisition of RRPR Holdings through VCPL, Adani Group asked RRPR Holdings to allot the shares to VCPL under the exercised share warrants.

Radhika Roy and Prannoy Roy who were owners of RRPR Holdings said that Adani needed approval from SEBI to get shares from RRPR allowed to VCPL. The journalist couple stated a 2020 ban by SEBI on the Roy’s from taking part in any market activities in securities markets.

Even though Adani rubbished the claims of Roy’s that the conglomerate requires prior approval of SEBI to exercise warrants on shares, both parties have not approached market regulator SEBI for clarification.