Stock - Prannoy Roy
NDTV founders Prannoy and Radhika Roy are opposing the Adani takeover move. Image Credit: Bloomberg

Mumbai: Shares of New Delhi Television rose 5 per cent to hit the upper circuit on Wednesday after Gautam Adani, Asia’s richest person, made a bid to takeover the Indian news company as he seeks to expand his footprint in the competitive media sector.

NDTV, as the news outlet is more commonly known, surged by the daily limit during trading in Mumbai to touch a high of Rs388.2 ($4.9) per share while the benchmark S&P BSE Sensex was largely unchanged. Adani’s conglomerate announced late on Tuesday that it had indirectly acquired a 29.2 per cent stake in the media firm and was making an open offer to buy another 26 per cent at Rs294 a share for a combined Rs6.1 billion.

Despite the 24 per cent discount in Adani’s open offer, investors view this price point favorably since the stock has rallied more than 200 per cent this year as profits improved post-pandemic and there was speculation of a stake sale. The founders of New Delhi-based news outlet said in a statement Tuesday that they were not aware of a new investor coming into the company nor were they part of any discussion regarding the stake sale by one of their shareholders to a third party.

“I think it’s a very expensive valuation that the Adani Group is paying,” said Karan Taurani, an analyst with Elara Securities India. He said news broadcasting industry in India is not growing more than 8-10 per cent annually and the current stock valuations may drop over a medium-to-large term.

NDTV’s take
“The NDTV founders and the company would like to make it clear that this exercise of rights by VCPL was executed without any input from, conversation with, or consent of the NDTV founders who, like NDTV, have been made aware of this exercise of rights only today. As recently as yesterday, NDTV had informed the stock exchanges that there was no change in the shareholding of its founders,” NDTV said in a regulatory filing.

Both founders, Prannoy Roy and his wife Radhika, hold 32.26 per cent stake in the firm. Adani Group has indirectly acquired 29.18 per cent held by another promoter RRPR Holding. This means the Adani Group will have to buy 26 per cent of 38.55 per cent held by public investors.