Business

How Adani Group acquired NDTV

Adani Group has now become the owner of an approx 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 an open offer, to acquire a further 26% of 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 wasn’t even aware of this. NDTV says they weren’t aware of the shares acquired by the Adani Group. Neither did 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 be possible? “NDTV has been sold.” “Billionaire Gautam Adani’s media division acquired more than 29% in the news broadcasted NDTV.” “Named after Sita’s husband, work ethics similar to Neeta’s husband.” “You have Adani’s aircraft, wealth, strength, everything so obviously you’ll get them votes. Who else will do it? Adani hasn’t given me even a helicopter.” Friends, such business news is normally quite boring, but here, it’s also shocking because Adani has bought NDTV. 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 Gautam Adani.

The exact relationship between Gautam Adani and Narendra Modi, would need 4 articles 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’s 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 requirement. Coal India Limited was mandated to buy at least 8 million tonnes of imported coal. Government officials to the New Indian Express, domestic coal is priced around ?1,700 – ?2,000 per tonne. But the imported coal costs about ?17,000 – ?20,000. The imported coal costs ten 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 ‘coincidently’ the bid to buy all 6 airports, was won by the Adani Group. About 4 years ago in 2014, Congress leader Rahul Gandhi had claimed, that when Narendra Modi was the Cheif Minister of Gujarat, he sold a 45,000 acres plot of land at the rate of ?1 per square meter. ?1 for each square meter. Friends, such claims had become quite common. In 2017, CPM member Brinda Karat accused the Modi government that ?72,000 crores in bank loans of the 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 on Congress also. Not only in India, but from America to Brazil, these things were seen in several countries. There 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’s said that these relationships work on the simple condition, “Give me donations, and I’ll give you business opportunities.” It shows how Crony Capitalists give donations to political parties, these may be given in secret, through Electoral Bonds, in return, they get favours. such as loan waivers, tax cuts, providing loans through public banks, amending laws, handing bailouts, and major infrastructure projects, government contracts for 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 ?11,680 Billion. Most of these write-offs took place post 2014-2015. When the Narendra Modi government was in power. you might wonder why you don’t hear such news. Friends, that’s 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. “I can shout over you, I’ll tell you why.” “How dare you ask such questions?” “We were not yelling at you, I’m talking about Mr McAdams.” “Turn off his audio.” “Show some respect.” It’s not that I’m carrying out some in-depth investigative journalism, and digging deep to show you 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 the newspapers in detail? Most people consume news through TV Channels. What’s shown on TV Channels matters the most. That’s 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’s right-wing or left-wing, forget this. Some people will say that it is a biased channel. But I’m not talking about whether it is biased or not, just look at the issues shown on the channel. While the other channels constantly run content on Hindu-Muslim, Pakistan, NDTV talks about unemployment, education, and jobs. Look up Ravish Kumar’s video from the last 3-4 months, about the various topics he took up, and then compare that to any other TV channel. A few months ago, Newslaundry carried out an interesting analysis on this. They collected the data from all news channels, and then checked each episode to see what was being discussed in it. As you can see on the screen, Sudhir Chaudhary’s show DNA, 28 out of 73 shows talked about communal issues, 29 out of 68 shows on Times Now. On Republic Bharat, 45 out of 96 shows focused on communal issues only. 43 out of 68 shows on News18. 45 out of 88 on Aaj Tak, 60 out of 182 on Arnab Goswami’s Republic TV. And then, as a clear contrast, you get to see Ravish Kumar’s show on NDTV. On which only 23 out of 77 shows were related to the Hindu-Muslim issues. There was a major difference here. When Ravish Kumar talks about this on his show, he doesn’t do it in a manner inciting hatred between the communities, when they talk about these issues, you can see the result it brings about. After watching the show, you aren’t left feeling hateful toward people from other religions. Another difference between these channels and NDTV was that in the debates on the other channels that aren’t 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 last few years. According to the World Press Freedom Index 2022, India was ranked at 150th position out of 180 countries. It shows that if there are 180 countries in the world, in 149 of them, the media has more freedom than in India. This is the reason why the good journalists working on these TV Channels, have either been terminated from their jobs, or they had to resign. Because there’s 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. On the other hand, since Ravish Kumar was the last man standing, is terribly targetted, with a troll army criticising his every move, Once, his phone number was leaked by a BHU professor. He gets death threats and curses over the phone. In 2016, the government placed the historic One Day Ban on NDTV India, citing the issue of National Security. Since 2014, ED and the Income Tax Department has been on the hunt for this channel. Carrying out investigations, In 2017, the CBI raided Prannoy Roy and Radhika Roy, on the allegations of bank fraud. NDTV claimed that it was a witch hunt against the channel. It is pretty obvious to see how NDTV and Ravish Kumar were constantly harassed and targetted, perhaps because they didn’t agree to turn a blindly follow the government’s directions. In 2019, Ravish Kumar was asked, what would happen if his channel was banned by the government? What he said then, is still relevant today. “I read the news on the road.” “Why can’t I?” “Is it written in the Constitution that a reporter shall read the news only in a studio?” “He can do so anywhere, in a park, in a car, if nothing else, I’ll read the news in the bathroom.” 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. When NDTV doesn’t wish to be sold to the Adanis, NDTV’s founders Prannoy Roy and Radhika Roy, don’t want to sell NDTV, how can Adani buy it? There’s an Indian company behind this game. Vishvapradhan Commercial Private Limited (VCPL). A company that is not very well known. It was founded in 2008, and about 12-13 years ago, in 2009-2010, Radhika and Prannoy Roy took out a loan for ?4.03 billion, from this VCPL company. Actually, they didn’t take this loan as private individuals, Instead, they had formed a company RRPR Holding Private Limited, and that company took this loan. The name of the company is simply their initials. RR and PR. Radhika Roy and Prannoy Roy. This company was the single largest stakeholder 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% stake 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 ?1.03 billion. You’d ask why am I think ?1.03 billion is inadequate. It is inadequate because the company had already given out a loan of ?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 Limited, and they had granted this money for the loan. But anyway, since Adani has bought VCPL, Adani now had the option to convert these warrants into ownership. Into equity. And they chose that option. Adani bought VCPL, and VCPL acquired RRPR, according to the conditions of the loan. And because RRPR had a stake in NDTV, at 29.18% the stake is now held by Adani. If you are wondering about how to select the right companies to invest your money. I’d like to recommend this book regarding this, Beating The Street. You can find the summary of this book on KUKU FM to listen to. Another great audiobook is Business Strategy. If you don’t know KUKU FM, it is a brilliant audio learning platform, on it, you can listen to many knowledgable books. Normally, it is priced at ?399 for the entire year, but if you use the coupon code DHRUV50, you will get 50% off, So that the annual cost will be ?199 only. To access their entire library. The link to it is in the description below. You can go check it out. But first, let’s get back to the topic. 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 shareholders, 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 ?294 per share. In their open offer. This means that these 26% shares would amount to a total of ?4.928 billion. If the rest of the shareholders sell their shares, And Adani gets control over another 26% shares, It would result in a 55% of stake of NDTV lying with Adani. As individuals, Radhika and Prannoy Roy own 32% of the stake of NDTV. Adani would then get 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 shareholder of NDTV, can sell their shares to Adani. Since NDTV is a listed company, 29,691 individuals own the stock of NDTV. These people have invested less than ?200,000. These people can sell their shares 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 I Fund holding 4.42%. Both investor funds are based in Mauritius. Currently, the NDTV shares are priced at ?384.05 on the stock market. Whereas Adani has offered ?294. So why would anyone want to sell their share to Adani? For the individuals invested in NDTV, this would make no sense. Why would they sell their shares at a loss? But LTS Investment Fund is said to be a potential candidate, which may sell its stake. 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 speclated that these 4 companies may sell their stake to Adani. According to the Hindu BusinessLine, they too have an indirect connection to the 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 a 50% stake in NDTV. People are now worried that NDTV’s journalistic nature is under threat now. You might be wondering, if there’s 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 may not have the money to do so. Because if they had the money, wouldn’t they have repaid the loan? The second thing that can be done here, is the appearance of a White Knight, a rich person with a lot of money, and offer to buy the other shares. They would have to spend their 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 this process is being called a Hostile Takeover. NDTV’s management doesn’t 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’ll 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 NDVT? Will NDTV become a blind follower of the government? Will Ravish Kumar and other journalists have to leave the channel? If it happens, will the channel lose its core viewers? Will they have to hire other unethical journalists to run the channel? And if it does happen, won’t NDTV lose its essence? In ancient Greek philosophy, the Ship of Theseus is discussed. A skip whose components are taken apart and replaced one by one, the wood, engine, iron, masts, take out everything and replace it, Is the resulting ship the original ship? If all the components have been replaced, will it be correct to call the ship the original Ship of Theseus? Something to think about.