InvestorQ : How did Adani group gain control over NDTV?
Khushi Patel made post

How did Adani group gain control over NDTV?

Dhwani Mehta answered.
1 month ago

On Tuesday, Adani Media Ventures (AMVL) confirmed that it had bought a stake of 29.18% in NDTV. It was a fairly convoluted transaction. Adani bought 100% in a fairly unknown name called Vishwapradhan Commercial Private Ltd (VCPL). Now there is a small history to this deal. Back in the year 2009, Prannoy Roy had taken a loan of Rs400 crore from VCPL and against that had issued warrants wherein it could be converted into a 99.9% stake in “Radhika Roy Prannoy Roy Holdings Ltd (RRPL)”. So what did Adani group do?

They bought out the entire stake in VCPL through a subsidiary of Adani Media Ventures Ltd (AMVL). By purchasing the 100% stake in VCPL, Adani group automatically got access to the warrants which were excisable at any point of time. Once that was done. The 29.18% stake in NDTV automatically got transferred from the holding company of Roy to the Adani group. Currently, the Roy family holds over 61% in NDTV of which 29.18% was held by RRPL Holdings while the balance of around 32% is held individually by Prannoy and Radhika Roy.

While Prannoy and Radhika have denied knowledge of this deal, it was always on the cards. There was no way they had the cash flows to repay the Rs400 crore loan so the only way out was to let the owner of VCPL exercise the warrants. Now the next step is that the Adani group has already expressed its intent to make a 26% open offer to shareholders and that will give majority stake in the target company to Adani group.