The 13-day open offer for an additional 26 per cent stake in New Delhi Television (NDTV) by the Adani group closed on Monday, with investors tendering 5.32 million shares or a third of the open offer size of 16.7 million shares, according to BSE data.
As a result, the Adani group, which has a 29.18 per cent in NDTV, has picked up an additional 8.26 per cent stake in the media company through the open offer route. It is the largest shareholder in the news broadcaster with a 37.44 per cent stake, ahead of the founder-promoters Radhika and Prannoy Roy, who together hold 32.26 per cent in the company.
“As the largest shareholder, the Adani group can propose reconstitution of the NDTV board,” Sriram Subramanian, managing director, InGovern, a Chennai-based proxy advisory firm, said. Prannoy Roy is the chairperson of NDTV, while Radhika Roy is the executive director, according to BSE data.
“For this, the Adani group will have to call for a shareholders’ meet and propose new directors on the board. This proposal will have to be put up for voting by shareholders, which will be an ordinary resolution requiring 50 per cent of voting shareholders to approve it,” he said.
NDTV shares closed trade on Monday at Rs 393.90 apiece on the BSE, 4.95 per cent down versus Friday’s close. Despite this, the current market price is at a nearly 34 per cent premium to the open offer price of Rs 294 a share.
Prior to the open offer, NDTV’s independent directors, including Kaushik Dutta, Indrani Roy and John O’Loan had asked shareholders to carefully evaluate the open offer, given that the market price was higher than the open offer price.
Category-wise data on the NSE shows that corporate investors in NDTV had offered the most at 3.93 million shares in the open offer, while retail investors had offered a little over 0.7 million shares. Qualified institutional buyers (QIBs) have tendered 0.68 million shares. However, the data by NSE does not identify either the corporates or QIBs who have offered to sell their shares.
Prior to Adani group’s acquisition plans, the Roys held 61.45 per cent stake in NDTV. This included the 29.18 per cent held by RRPR Holding, the promoter entity, which was at the centre of the acquisition plans unveiled by the Adani group on August 23.
This had triggered the open offer to buy a further 26 per cent stake in the media company.
JN Gupta, managing director, Stakeholders Empowerment Services, a Mumbai-based proxy advisory firm said, that the Roys and the Adani group would have to find a way of working together if they were keen to ensure smooth management of the company.
Appointment of independent directors, capital raising and restructuring, mergers and acquisitions, change of company name and registered office, are among business activities that require special resolutions to be passed by shareholders of a company. Here, at least 75 per cent of the voting shareholders have to be in favour of it.
“While the Adani group is the largest shareholder in NDTV, the Roys are the second-largest in terms of shareholding,” Gupta says. “The Roys can remain as directors on the NDTV board due to their shareholding,” he adds.
Adani group chairman Gautam Adani had said last month in an interview to the Financial Times that he intended to make NDTV an international news brand and had asked Prannoy Roy to remain as chairperson of the company.
“Why can’t you support one media house to become independent and have a global footprint?” Adani said in the interview with the Financial Times, adding that he saw the NDTV purchase as a responsibility rather than a business opportunity.
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