The Adani Group acquired a majority stake in NDTV through a complex and multi-faceted process that began with the acquisition of a company holding convertible warrants in NDTV's promoter entity, followed by a mandatory open offer to public shareholders.
The dramatic saga unfolded as a sophisticated financial maneuver, characterized by a mysterious initial lender, a loan offered with no interest, an eventual change of control, and what many perceived as a hostile takeover. It involved navigating SEBI orders, launching an open offer to acquire shares, and culminated in a surprising sale of shares by the original promoters, ultimately resulting in the Adani Group becoming the majority shareholder of NDTV.
A Multi-Stage Acquisition Strategy
The acquisition was not a direct purchase of NDTV shares from the market initially, but rather an indirect route leveraging existing financial arrangements.
The Foundation: An Indirect Control Mechanism
The genesis of Adani's control lay in a loan agreement from 2007-2008 between NDTV's promoter holding company, RRPR Holding Private Limited, and a little-known entity named Vishvapradhan Commercial Private Limited (VCPL).
- Mysterious Lender: VCPL provided an interest-free loan of over ₹400 crore to RRPR Holding.
- Convertible Warrants: Crucially, this loan agreement came with warrants that gave VCPL the right to convert the debt into a 29.18% equity stake in RRPR Holding at any point. This meant VCPL effectively held an option to gain control over RRPR Holding, and indirectly, a significant stake in NDTV.
Adani's Strategic Entry
In August 2022, Adani Group's media arm, AMG Media Networks Limited (AMNL), announced that it had acquired VCPL. This acquisition was the pivotal first step for Adani, as it gave them the rights to convert VCPL's debt into equity in RRPR Holding.
Exercising Control and Triggering an Open Offer
Following the acquisition of VCPL:
- Conversion of Warrants: AMNL promptly exercised the warrants held by VCPL, converting the loan into a 29.18% equity stake in RRPR Holding. This effectively gave Adani Group control over RRPR Holding and, by extension, an indirect 29.18% stake in NDTV.
- SEBI Regulations and Open Offer: According to Indian securities regulations (SEBI Takeover Code), acquiring more than 25% of a listed company's voting rights triggers a mandatory open offer for an additional 26% stake from public shareholders. To comply with these rules and increase its ownership, the Adani Group launched an open offer for NDTV shares. This offer was initially below the prevailing market price of NDTV shares, adding to the complexity and public interest in the acquisition.
The Final Step: Promoters' Share Sale
Initially, NDTV's founders and promoters, Prannoy Roy and Radhika Roy, contested the Adani Group's move, stating it was done without their consent. However, in a surprising turn of events in December 2022, they announced their decision to sell a significant portion of their remaining shares (specifically, 27.26% out of their total 32.26% stake) to the Adani Group. This sale, combined with the shares acquired through the indirect route and the open offer, firmly established the Adani Group as the majority shareholder of NDTV.
The acquisition showcased a sophisticated use of corporate finance mechanisms to gain control of a public company, beginning with a long-standing debt arrangement.
