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Adani to pay additional amount for NDTV shares in order to match payment to founders

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The current richest Asian, Gautam Adani’s group, announced this Tuesday that they are going to pay an additional amount per share to the NDTV stockholders. The increase in the money is significant as Adani’s group will pay an extra 48.65 rupees per share to the stockholders of NDTV. In a stock exchange filing, Adani enterprises said that they are going to pay the additional amount to their investors who had sold their shares recently between November 22 and December 5. So, the current payout will be 342.65 rupees per share, and the price is going to match the price Adani enterprises paid to buy the stakes of Prannoy Roy and Radhika Roy.

RRPR Holdings, a company which was founded by the Roys and also had the initials of the Roys in its name, had borrowed a loan of 403 crores of an interest-free loan from Vishvapradhan Commercial Private Limited, which was a little-known company till the Adani group acquired it in 2009-10. Adani group acquired Vishvapradhan Commercial Private Limited in exchange for the warrants. The warrants allowed the Adani group to buy a stake anytime they wanted in the newsgroups. The power of the warrant was exercised by the Adani group in August 2022. NDTV said that the whole process was done without any consent of NDTV. So, exercising the warrants, NDTV acquired RRPR Holdings. 29.18 percent of the stakes of the NDTV are held by RRPR Holdings. Then, the Adani group made an open offer to the public stakeholders to acquire another 26 percent of the company.

The open offer made by Adani group paid 294 rupees per share. The price was lower than that of the stock trading price. However, despite the deep discount in the stock price,  the investors were willing to sell more than 53 lakh shares which comprised 8.27 percent of the shareholding. The brand value of the Adani group played a significant role in attracting investors to trust their company more than NDTV’s. The Adani group has been recently targeting different fields to expand their business. Acquiring a significant news channel like NDTV, a leading news channel in the Indian television industry, is an excellent addition to their business. The brand value the Adani group has built over years of hard work in different fields attracted investors to invest in their company over the other competing companies. These transactions were made almost simultaneously, and thus, it is often regarded as twin transaction.

The twin transactions made the Adani group owner of more stakes than what the founders Prannoy Roy and Radhika Roy had held in the firm. What amount of stakes the Roys held in their firm was not going to matter much anyways as Adani group bought most of the shares last week. Adani bought almost all the shares that Roys had in the firm. Out of 32.26 percent of the stakes, the Adani group bought 27.62 percent for 342.65 rupees per share. After the transaction, the Roys received 602 crore rupees from the Adani group. Prannoy Roy had 15.94 percent of the NDTV stakes. He kept only 2.5 percent stakes and sold the rest to the Adani group. Radhika Roy had 16.32 percent of the stakes of NDTV, and she, too, kept a stake of 2.5 percent herself and sold the rest. Currently, the Adani group has 64 percent of NDTV (New Delhi Television Limited). Prannoy Roy was the chairman of NDTV. After the deal with the Adani group, the Roys resigned from the NDTV board. After the acquisition of RPPR Holdings, Adani group appointed two members to the board, which had been increased to four after the Roys resigned from the board. Retired IAS officer Sunil Kumar and a former civil servant Aman Kumar Singh have been added to the board of NDTV.

Both newly appointed board members have worked under Raman Singh of the BJP party, who worked as the chief minister of Chhattisgarh for an extended period of fifteen years from 2003 to 2018. Sunil Kumar retired in 2014 as the chief secretary of Chhattisgarh. Aman Kumar Singh was the principal secretary to Raman Singh, the previous chief minister of Chhattisgarh. However, Aman Kumar Singh resigned from his post in 2018 when BJP lost power in Chhattisgarh that year. Aman Kumar Singh now works as the head of the corporate communications department at NDTV. However, the role of Sunil Kumar in the company is still unclear.

The two previous members who were appointed formerly by the Qdani group were Sanjay Pugalia and Senthil Sinniah Chengalvarayan. These two members, along with Aman Kumar Singh and Sunil Kumar, are the board members of NDTV. Mr. Sanjay Pugalia is a former journalist. He is now working in NDTV as the chief executive officer, and he is also the editor-in-chief of the media initiatives at Adani group. Mr. Pugalia is a very important person for the Adani group currently. The other board member, Mr. Senthil Sinniah Chengalvarayan, is a journalist too. He is an independent director at Quintillion Business Media Pvt, a media firm in which Adani group bought a stake last year.

The acquisition of NDTV would enable the Adani group to set foot in the media world. The inclusion of the media space will have a significant effect on the diversified business of the Adani group. The broader diversification spree of the Adani group has led to the expansion of the conglomerate. Initially, the Adani group affected coal mining and ports. Now, the development of the company has led them into the world of airports, cement, digital services, and data centers also.

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