Adani enterprise has made a move to acquire a controlling stake in the oldest news network NDTV Ltd in a hostel takeover. The announcement came on the same day when CreditSights, a Fitch Group unit, said that the Adani group is ‘Deeply Overleveraged’ and might spiral into a ‘massive debt trap’.
The hostile takeover involves the promoter of the company whose shares will be acquired. RRPR Holding Private Limited is a promoter group company and holds around a 29.18 percent stake in NDTV.
Vishvapradhan Commercial Private Limited (VCPL), a wholly owned subsidiary of AMG Media Networks Limited which is owned by Adani Enterprises Limited, holds warrants of RRPR Holding Private Limited, which they have converted into equity shares and thus have a 99.99 percent stake.
In addition to the existing shares, VCPL, along with AMNL and AEL has now launched an open offer to acquire up to 26 percent stake in NDTV, in compliance with the requirements of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
If the offer goes through, the Adani group will own a total of 55.18 percent stake in NDTV. A BSE filing said the open offer would be for a total consideration of up to Rs 492.8 crore payable in cash.
Hours after the announcement, NDTV issued a statement saying the move by the Adani Group “was executed without any input from, conversation with, or consent of the NDTV founders.”
Earlier in May, to mark its foray into the media business, the Adani group had bought a 49 percent stake in Raghav Bahl’s Quintillion Business Media Pvt Ltd for an undisclosed sum.
The biggest rival of the Adani group, Mukesh Ambani, the chairman of Reliance Industries, owns Network18, which operates business networks such as CNBC TV18.
On the news, the multibagger stock of NDTV hit an upper circuit of 5 percent at Rs 388.20 as the markets opened on Wednesday. In the last five days, the stock has climbed by more than 11 percent and in a month the stock is up by more than 42 percent.
So far this year, the stock has given a return of more than 237% YTD. In a year, the stock price has risen from Rs 78 to the current levels of Rs 388 representing a multibagger return of 392.95%.
New Delhi Television Ltd (NDTV) is an Indian news media company focusing on broadcast and digital news publications. The company pioneered independent news broadcasting in India and is credited for launching the first 24×7 news channel and the first lifestyle channel in the country.
Written by – Anoushka Roy
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