Understanding the acquisition

The genesis of the hostile takeover of NDTV by the Adani group lies in a loan taken by NDTV’s owners, Prannoy and Radhika Roy, from India’s other mega-conglomerate – Mukesh Ambani’s Reliance group, back in 2009-2010. RRPR Holdings, the holding company owned by the Roys, which held 29.18% of NDTV shares, had taken loans worth approximately US $73 million from Vishwapradhan Commercial Private Limited (VCPL) in 2009-10, which had in turn raised the funds from a Reliance Group company named Reliance Strategic Ventures. In exchange for the interest-free loan, RRPR had issued warrants to VCPL entitling it to convert them into a 99.9% stake in RRPR.

On 23 August, the Adani Group’s media company announced that it had acquired full control of VCPL, and that it intended to convert the warrants it held in RRPR, and thereby acquire 29.18% of NDTV shares, in the first move of the acquisition. In a statement to the stock exchange, NDTV had said at the time that the notice of conversion of warrants had been served upon it ‘without any discussion with NDTV or its founder-promoters.’

The Roys sought to stymie the acquisition process, arguing to India’s market regulator – the Securities and Exchange Board of India (SEBI) – that they weren’t permitted to transfer shares to VCPL, owing to a ban on trading securities that the SEBI had imposed on them some years earlier. These efforts fell through, however, as the SEBI indicated that its ban would not prevent the acquisition.

Following its acquisition of VCPL, the Adani Group was obliged under Indian securities law to launch an ‘open offer’ to buy a further 26% of NDTV shares from its other shareholders. The open offer started on 22 November 2022 and is to continue until 5 December. As of 30 November, the Adani Group has managed to acquire a further 8.2% of NDTV’s shares, raising its overall holding to 37%, making it NDTV’s largest shareholder.

The Roys still hold 32.26% of NDTV through direct personal shareholdings. This entitles them to seats on NDTV’s board. However, if the Adani Group is able to raise its shareholding to over 50%, either through the open offer, or through subsequent share purchases, it will achieve complete operational control over the network. While the Roys have the option of issuing a counter-offer to shareholders, it is understood that they would need considerable financial backing to do so, considering that NDTV was unable to pay back the loan to VCPL in the first place. Even if they were to be able to raise funds for a counter offer, the Adani group would be entitled to issue its own counter offer.

The acquisition of NDTV by India’s richest man is well on its way to completion.

Why is Adani taking over NDTV?

In his interview to the Financial Times Gautam Adani sought to position the acquisition of NDTV as a part of his conglomerate’s global media ambitions. ‘Why can’t you support one media house to become independent and have a global footprint?’ he was quoted as asking, adding that ‘India does not have one single [outlet] to compare to Financial Times or Al Jazeera.’

Adani said in that interview that he had invited Prannoy Roy – NDTV founder and veteran news anchor – to stay on as NDTV’s chair and offered his own interpretation of what editorial independence should mean.

‘Independence means if government has done something wrong, you say it’s wrong,’ Adani said to the Financial Times. ‘But at the same time, you should have courage when the government is doing the right thing every day. You have to also say that.’

The reaction in India to the takeover has been polarised. It has been celebrated with glee by Prime Minister Modi’s supporters on social media, while opposition politicians and activists have largely interpreted it as a political coup. To government critics, the acquisition signals NDTV joining the ranks of the ‘Godi media’ (lapdog media), a term coined by Ravish Kumar to describe news channels that slant their coverage in support of Prime Minister Modi’s BJP.

Opposition politicians have expressed their views in no uncertain terms. Randeep Singh Surjewala, of the opposition Indian National Congress and a member of the upper house of India’s parliament, said in a tweet ‘Goodbye Dr Prannoy Roy! We’ll miss you and your incisive, independent journalism. Thank you for creating a news channel amongst the din & noise of servitude and servility.’

K.T. Rama Rao, a minister of the Telangana Rashtra Samiti, which holds the government of the southern state of Telangana, tweeted ‘Unfollowing @ndtv. Thanks for the good work thus far.’

Another prominent television anchor, Rajdeep Sardesai of the India Today news network, who started his career and rose to prominence at NDTV, has posted two cryptic tweets saying simply ‘Darkness’ and ‘Sadness,’ apparently describing his reaction to the state of affairs at his former network.

A Delhi-based senior journalist, speaking on condition of anonymity, suggested that Ravish Kumar’s coverage may have been one of the reasons motivating the move by the Adani Group. Kumar, who was conferred the prestigious Ramon Magsaysay Award in 2019, has been a ‘trenchant critic of the Modi administration and is one of India’s most popular journalists who works in India’s most-spoken language, Hindi’ the journalist said.

‘The nod for Reliance to sell VCPL to Adani may well have been due to an effort to muzzle Kumar’s coverage’.

The author is an independent journalist