Adani Group vs NDTV: What are gatekeepers of governance saying 

Proxy advisory firms that keep an eye on corporate governance issues believe that the ongoing tussle between corporate giant Adani and media major NDTV will go on for some time as both sides are aggressively focusing on controlling the listed firm that currently runs three television news channels – NDTV 24x7, NDTV India and NDTV Profit. 

Even as Adani Group has indirectly acquired a stake of 29.18 per cent in the company through its subsidiary Vishvapradhan Commercial Private Limited (VCPL) and has also made an open offer to acquire another 26 per cent, the issue of control will take time to be settle: A long-drawn legal battle seems to be the only way ahead. 

Experts say there are two key elements. One is the Sebi nod for the open offer and the actual success of the offer. Looking at the offer price and the current market price, it is an easy guess that no one would tender their shares in the open offer. 

The open offer price is Rs 294 while the shares of NDTV are currently hovering around Rs 490. 

“This issue is not going to end soon as even for the open offer, the acquirer needs to get Sebi approval and present promoters of NDTV will try their best not to lose control. This will be a legal battle between the two sides,” says J N Gupta, Founder & Managing Director, Stakeholders Empowerment Services. 

“Further regarding success of open offer, given the market price, it is unlikely that any shareholder will tender the shares in the open offer. Finally in my opinion the Sebi order prohibits the Roys from dealing in securities directly or indirectly but I don’t think it will impact conversion of warrants as a third party is not subject of the Sebi order,” says Gupta, a former executive director of Sebi. 

Also read: NDTV vs Adani Group: Media major appears to be on a weak ground, say lawyers

The debate around control also stems from the fact that the Roys – founders Prannoy Roy and wife Radhika Roy – directly hold a cumulative stake of 32.3 per cent in the company - enough to block any special resolution. 

“The issue is not about governance of NDTV, as yet. It is now a shareholder tussle on whether RRPRH will allot the shares to VCPL in lieu of the warrants,” says Shriram Subramanian, Founder & Managing Director, InGovern Research Services. 

“It is fait accompli that Adanis will control 29% shareholding as it is just a matter of time as even the NDTV statement says that the Sebi restrictions that they have highlighted end in November 2022. As far as the open offer is concerned, it is unlikely that any shareholder will tender their shares as the market price is way above the offer price,” adds Subramanian. 

While it is believed that the Adanis have a few so-called “friendly shareholders’ who might tender their shares in the open offer, it would be a difficult choice for the stakeholders given the manner in which share price has zoomed on the back of a renewed positive outlook on the company. 

But, does Adani Group need to hold the shares directly to exert control? 

“If there are friendly shareholders then they can support Adani without tendering their shares also. However, the larger question to be asked is what does Adani Group plan to do with the 29 per cent stake that they will acquire. Will they propose new directors that will translate to a jostling for board positions?” says Subramanian. 

 

Also read: NDTV-Adani tussle: RRPR writes to SEBI to seek clarification on 2020 order

Also read: NDTV vs Adani Group: VPCL knocks on SEBI's door, seeks clarity on RRPRH's stand