NDTV shares hit upper circuit as Adani aims for majority stake

Shares of New Delhi Television Ltd. (NDTV) hit upper circuit of 5% in early trade on Wednesday after Adani Group launched an open offer to acquire 29.18% stake in the media company. Billionaire Gautam Adani-led Adani Enterprises Ltd. (AEL) on Tuesday announced that it would buy 29.18% indirect stake in NDTV through Vishvapradhan Commercial Pvt. Ltd. (VCPL), a wholly owned subsidiary of AMG Media Network Ltd. (AMNL), the media arm of Adani group.

Besides, the company also plans to buy an additional 26% stake in the media firm through open offer, taking the total shareholding in NDTV to 55.18% upon successful completion of the scheme. The shares will be acquired at a floor price of ₹294 per share, a discount of 20% from Tuesday’s closing price of ₹366.20 on the BSE, for a total consideration of up to ₹492.8 crore payable in cash.

Reacting to the news, NDTV shares opened higher for the second straight session at ₹380, against the previous closing price of ₹366.20 on the Bombay Stock Exchange (BSE). Extending opening gains, the stock gained as much as 5% to ₹384.50, driven by huge volume trade. In the first two hour of day’s trade, as many as 0.75 lakh shares changed hands over the counter as compared to two-week average volume of 0.8 lakh stocks. The market capitalisation of the smallcap stock climbed to ₹2,478.9 crore. Meanwhile, the benchmark Sensex was trading 114 points higher at 59,145 levels at the time of publishing.

Following the announcement, Adani Enterprises' shares were trading 0.84% higher at ₹3,049, against the previous closing price of ₹3,023.65 on the BSE.

AMG Media Network in a release on Tuesday said, “Vishvapradhan Commercial Private Limited (VCPL), a wholly owned subsidiary of AMG Media Networks Limited (AMNL), exercised the rights to acquire 99.5% of the equity shares of RRPR Holding Private Limited, a promoter group company of NDTV.”

“VCPL, along with AMNL & AEL (persons acting in concert), will launch an open offer to acquire up to 26% stake in NDTV, in compliance with the requirements of the SEBI’s (Substantial Acquisition of Shares and Takeovers) Regulations, 2011,” it added.

RRPR is a promoter group company of NDTV and holds 29.18% stake in NDTV.

Meanwhile, NDTV has raised concerns over the acquisition, saying that the Adani group acquired the news network without any discussion with the company or its founder-promoters Radhika and Prannoy Roy. As per the company, there was no change in the shareholding of its founders on Monday.

"Without any discussion with New Delhi Television Limited (NDTV) or its founder-promoters, a notice has been served upon them by Vishvapradhan Commercial Private Limited (VCPL), stating that it (VCPL) has exercised its rights to acquire 99.50% control of RRPR Holding Private Limited (RRPRH), the promoter-owned company that owns 29.18% of NDTV," the media house says in a stock exchange filing.

As per the latest shareholding pattern available on the BSE, Radhika and Prannoy Roy, through their company, RRPR Holding, continue to hold 61.45% of the total paid-up share capital of NDTV. Foreign portfolio investors hold 14.7% stake in the company, while individual shareholders own 11.29% shares in the company.