The Story of NDTV's Stake Acquisition By Adani Group.

 An Interesting & Thoughtful takeover of NDTV by Adani Group

    (The image has been taken from Kiddaan)

Adani Group has now become the owner of an approximately 29% stake in NDTV. Specifically speaking Adani Group has acquired a 29.18% stake in NDTV Channel. In addition to this, they have also launched ab open offer to acquire a further 26% stake in the company. To be honest, the buying and selling of companies is quite common in every industry. But in this case, the shocking part was that NDTV was not even aware of this. NDTV says they were not aware of the shares acquired by the Adani Group. Neither did the the Journalists working in NDTV know this, nor did the management in NDTV and neither did the founders of NDTV, Prannoy Roy and Radhika Roy were informed about this. There were no discussions or permissions, and such a huge stake went to the Adani Group.

How can this possible?

Come, Let's try to understand in this article.

Friends, Such business news is normally quite boring but here, it is also shocking because Adani has bought NDTV( New Delhi TeleVision). Those who have no idea about the politics behind it, let me inform you, our country's Prime Minister Narendra Modi is said to have a strong connection with businessman Goutam Adani. The Exact relationship between Gautam Adani and Narendra Modi would need a long article to be explained properly. But in summary, there seems to be a close relationship between the two. 

Let me cite some examples of this. 

Recently, Coal Minister Pralhad Joshi told the Rajya Sabha, that there is no coal shortage in the country. Despite this the Power Ministry ordered the states, to buy imported coal to meet at least 10% of their Coal requirements. Coal India Ltd. was mandated to buy at least 8 million tonnes of imported coal.Government officials to the New Indian Express, domestic coal is priced around Rs 1700- Rs 2000 per tonne. But the imported coal coasts about Rs 17,000- Rs 20,000 per tonne. The imported coal coasts 10 times the domestic coal. According to a Bloomberg report, a public company NTPC placed orders of importing 20 million tonnes of coal, of which the order for 17.3 million tonnes was given to Adani Enterprises Limited. Many of the Coal importing tenders in the country went to Adani.  Another example of this, in june, the chairman of Sri Lanka's Ceylon Electricity Board, MMC Ferdinando, claimed in front of Sri Lanka's Parliamentary panel that Sri Lanka's President Rajapaksha was told by Narendra Modi, that the 500 MW Renewable Energy project that's being made should be given to the Adani Group. Although, one day later, when this news spread, he retracted his statement.  Apart from this, in 2018, the Indian Government had approved the privatisation of 6 Airports. And coincidentally the bid to buy all 6 Airports, was won by Adani Group. About 4 years ago in 2014, Congress leader Rahul Gandhi had claimed when Narendra Modi was the Chief Minister of Gujarat, he sold 45,000 acres plot of land sold to Adani at the rate of Rs 1 per square meter. Friends such claims had become quite common. In 2017, CPM Member Brinda Karat accused the Modi Government that 72000 crores in Bank Loans of Adani Group was waived off. In 2018, BJP Leader Subramanian Swamy had claimed and had reiterated his claim actually, in his own words, that Adani is the biggest NPA trapeze artiste in PSUs. NPA means Non Performing Assets, the bad loans.

Friends, the accusations of such Crony Capitalism was levied not only on BJP but also on Congress also. Not only in India, but also from America to Brazil, these things were seen in several countries.  There is a political thriller documentary in Netflix on this, The Edge of Democracy. And another documentary Saving Capitalism. DO watch them if you get the time to.It is said that these relationships work on the simple condition, " Give me donations, and i will give you business opportunities". It shows how Crony Capitalism give donations to political parties, these may be given in secret, through electoral bonds, and in return, they get favours. soch as loan waivers, tax cuts,provinding loans through public banks, amending laws, handing bailouts, and major infrastructure projects, government contracts of mining, or selling the resources of the public companies of the country. According to the Indian Express, RBI stated, over the last 10 years, banks have written off bad loans worth Rs 11,680 Billion. Most of these write-offs took place post 2014-2015, when Narendra Modi government was in power.You might wonder why you don't hear such news. Friends, this is because the content of the TV channels, revolves around Hindu-Muslim, riots, inflammatory speeches, boycotts. Only such news is run constantly, so that the real news hiding behind them, can be kept hidden from most of the public.

It is not that I am carrying out some in-depth investigative journalism,  and digging dip to make you know such news, the same news has been printed in mainstream newspapers. But the thing is such news is often printed in the corner of the 4th or 5th page of the newspaper. How many people read news paper in detail? Most of the people consume news through TV Channels. What is shown on TV Channels matters the most. That is why it is said that this biased media, is spreading communal propaganda, showing Hindu- Muslim debates, in a bid to distract and brainwash the public. In this scenario, NDTV was a unique channel. Not because they spoke out against the government or favoured them, whether it is right-wing or left-wing. Forget this. Some people will say that it is a biased channel.  But I am not talking about whether it is biased or not, just look at the issue shown on the channel. While the other channels constantly run content of Hindu-Muslim, Pakistan, NDTV talks about unemployment, education,and jobs( A few months ago, Newslaundry carried out an interesting analysis on this). Another difference between other channels and NDTV was that in the debates on the other channels that are not communal, they are often attacking the opposition. Although the media's role is to question the incumbent government. But these media channels, target the opposition, questioning them, while trying to please the government. NDTV was the only channel not to do this.  This is why the country's Press Freedom Index Ranking has been falling lower and lower over the few years. According to the world Press Freedom Index 2022, India was ranked at 150th position out of 180 countries. This is the reason why the good journalists working on these TV Channels, have been terminated from their jobs, or they had to resign. Because there is no scope for ethical journalism on the rest of the TV Channels. Punya Prasun Bajpai, Abhisar Sharma, Shyam Meera Singh, Ajit Anjum, Pragya Mishra, Sakshi Joshi,They had to start their Youtube Channels, so that they can carry on their independent journalism.

In 2016, the Government placed the historic One-Day Ban on NDTV India citing the issue of National Security. Since 2014, ED and Income Tax Department has been on the hunt of this channel carrying out investigations. In 2017, the CBI raided Prannoy Roy and Radhika Roy on allegation of Bank fraud. NDTV claimed that it was a witch hunt against the channel.Friends, now you can understand the consequences of this news on the political and media climate of the country.

Now let's get to the point I talked about at the beginning of this article. When NDTV does not wish to be sold to the Adanis, NDTV's founder Prannoy Roy and Radhika Roy, do not want to sell NDTV, how can Adani buy it? There is an Indian Company behind this Game, Vishvapradhan Commercial Private Limited( VCPL). A company that is not well known. It was founded in 2008. and about 12-13 years ago, in 2009- 2010. Radhika and Prannoy roy took out a loan of Rs 4.03 billion from this VCPL Company. Actually, they did not take this loan as private Individuals, Instead, they had formed a company, RRPR( Radhika Roy Prannoy Roy) holding private Limited. The name of the company is simply their initials.  This company was the single largest stake holder of NDTV. It owned a stake of 29.18% in NDTV. The loan taken by this company from VCPL was Interest-Free. But there was a special condition in that loan. RRPR had issued warrants whereby VCPL could convert those warrants and could claim a 99.9% claim in RRPR, and these warrants could be converted at any time. Simply speaking, this company, Mortgaged itself for the loan. On Tuesday, the news broke that Adani Group has acquired VCPL. Adani Group bought VCPL only at Rs1.13 billion. It is inadequate because the company had already given out a loan of Rs 4.03 billion, so why was it priced so low? Because VCPL too had approached Reliance Strategic Investors for funds. Mukesh Ambani's Reliance Industries Ltd, and they had granted this money for the loan. But anyway, Since Adani has bought VCPL, Adani now has the option to convert these warrants into ownerships i.e in equity. And they chose that option. Adani bought VCPL, and VCPL acquired RRPL according to the condition of the loan. And because RRPR had a stake in NDTV, at 29.18% , the stake is now held by Adani.

According to Indian Regulations,  If someone owns more than 25% shares in a company, they have to give an open offer, for buying at least 26% shares from the existing share holders so that the other shareholders get the opportunity to exit. These are the regulations.  Accordingly Adani had given the open offer for a further 26% shares. Adani has offered Rs 294 per share. This means that these 26% shares would amount to a total of Rs 4.928 billion. If the rest of the share holders sell their shares, and Adani gets control over another 26% shares, it would result in a 55% of shares of NDTV lying with Adani. As individual, Radhika and Prannoy Roy own 32% of the stake of NDTV. Adani would then get the total control over NDTV. But the question is, Will this 26% share go to Adani? Adani's Open offer means that any person or other entity which is an existing share holder of NDTV can sell their share to Adani.

Since NDTV is a listed company, 29,691 individuals own the stock of NDTV. These people have invested less than Rs 200000. These people can sell their sell if they want to. Apart from this, 947 companies own NDTV's shares. They may sell. But in the midst of these, there are two main companies, which own large stakes in NDTV. The foreign Portfolio Investors, One is LTS Investment Fund, which owns a 9.75% stake in NDTV. And the other is Vikasa India EIF Fund holding 4,42 %  stake. Both investor funds are based in Mauritius. Currently, the NDTV shares are priced at Rs 384.05 on the stock market. Where as Adani has offered Rs 294. So why would anyone want to sell their shares to Adani? For the individuals invested in NDTV, this would make no sense.  But LTS Investment Fund is said to be a potential candidate, which may sell its shares at the price quote by Adani.

Why will the LTS Investment Fund sell the shares to Adani?

Things get a bit shocking here. Because nearly 98% of the money invested by this fund, is invested in the Group Companies of Adani. Apart from this, there are 4 other companies, who own a total of 7% stake in NDTV. DROLIA Agencies, GRD Securities, Adesh Broking, CONFIRM Realbuild. It is being  speculated that these 4 companies may sell their stake to Adani. According to Hindu Business Line, they too have an indirect connection to Adani Group. So the public shareholders need not sell their shares, if these 6 companies sell their stakes to the Adanis, Adani will get more than 50% stake  in NDTV. People are now worried that NDTV's journalistic nature is under threat now. You might be wondering, if there is any way to save NDTV. One of the ways is that Prannoy roy or his wife declare a counter open offer at a higher price and buy the shares from the other shareholders.  But the chances of this happening seem slim. Because they don't have the money to do so. Because if they had the money, would not they have repaid the loan? The second thing that can be done here, is the appearance of a white Knight, a rich person with lot of money, and offer to buy the other shares.   He would have to spend his money to defeat Adani in the money battle. 

Adani was recently declared the richest man in Asia. So only an extremely rich businessman can do this. This is why the process is being called a Hostile takeover. NDTV'S management does not want this, the journalists working in NDTV do not want this, NDTV'S founders do not want this. But the way the situation has played out, it seems inevitable. We will see how it plays out in the future, if more than 50% of NDTV is truly taken over by Adani, and Adani Gets Control over it, how would it impact NDTV?

In ancient Greek Philosophy, the ship of Theseus is discussed. A ship whose components are taken apart and replaced one by one, the wood, engine, masts, take out everything and replace it. Is the resulting ship the original ship? If all the components have replaced, will it be correct to call the ship the original ship of Theseus? Something to think about.