NDTV Founders Prannoy Roy, Radhika Roy Resign From Promoter Group Board
NDTV co-founder Prannoy Roy. Image Courtesy: PTI
New Delhi: In a regulatory filing on Tuesday, listed media company New Delhi Television Ltd founders (NDTV) Prannoy Roy and Radhika Roy resigned as directors of the promoter group vehicle, RRPRH, with immediate effect.
The RRPRH is named after the Roy couple. The Roys still hold a 32.26% stake in NDTV.
Subsequently, the board of RRPR Holding approved the appointment of Sudipta Bhattacharya, Sanjay Pugalia and Senthil Sinniah Chengalvarayan as directors on its board with immediate effect. The three are nominees of Adani Group which earlier this week had taken control of RRPR Holdings.
The appointments and resignations were approved by the RRPRH board at its meeting on Tuesday. RRPL Holding holds 29.18% stake in NDTV, which is being taken over by the Adani group that has come out with an open offer to buy another 26% stake. The offer opened on November 22 and will close on December 5.
The premier news channel is seen as one mainstream channel that is critical of the ruling regime, as has been the case with earlier regimes too. Its popular Hindi programme, Prime Time With Ravish Kumar, is a rage across India, especially the Hindi belt.
Background
According to an explainer in Indian Express, in 2009, the Roys had taken an interest-free loan of over Rs 400 crore from a firm linked to Reliance Industries, which eventually ended up with a closely-held firm, Vishvapradhan Commercial Pvt Ltd.(VCPL). The loan allowed VCPL to convert warrants into shares of RRPR Holdings, which held a 29.2% stake in NDTV.
On August 23, 2022, the Adani group VCPL sought to convert the warrants into shares. NDTV promoters initially opposed the move saying they were not consulted but earlier this week relented and allowed the conversion, which gave VCPL a 99.5 % stake in RRPR Holding.
As per rules of market regulator Securities and Exchange Board of India, an open offer is made by the acquirer to the shareholders of the target company inviting them to tender their shares at a particular price and is triggered if an acquirer holds more than 25% of the public shareholding in the company.
Therefore, the Adani Group has emerged as a large shareholder with 29.18% and is running to buy as much as 16.76 million shares - or 26% of equity - from NDTV’s minority investors which are likely to change the control structure of the company.
Currently, the Roys directly hold 32.36% stake; Prannoy Roy’s stakes are 15.94%, while Radhika Roy holds 16.32%. If the Adanis manage to get the required 26% stake through its open offer, the group’s total stake will go up to 55.18%, enabling it to get firm management control of NDTV. If it fails to get a 50% stake, they have the option to buy shares from other institutional investors.
The single-largest shareholder of NDTV, besides Prannoy Roy and Radhika Roy and the Adani Group, is Mauritius-registered foreign portfolio investor (FPI) LTS Investment Fund Ltd with a 9.75% stake. It bought this stake in the quarter ending September 2016.
The development is significant ahead of the 2024 Lok Sabha elections, as NDTV had become one of the most popular and ‘watched channels’ second time in a row, according to a survey held by Reuters Institute at Oxford University in June this year.
(With inputs from PTI)
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