The curious case of Adani-NDTV open offer 

Spread the love

Why do people come to stock markets? Why would one invest in shares, when there are safer investment instruments available which also offer the added benefit of assured returns?

To make money, of course. To be more precise, earn more money than in relatively safe ways.

Then, isn’t it surprising that one is willing to sell shares at a certain price, even though the same set of shares could easily be sold at a much higher price. To be specific, one is ready to sell shares of New Delhi Television Limited (NDTV) at Rs 294, even though the shares can easily be sold at Rs 387 in the open market.

Simply put, one is ready to forgo an additional assured profit of about 32 per cent by tendering shares in an open offer instead of selling them in the open market.

So, who is tendering the shares in the open offer?

Market participants say that it is quite common for potential acquirers to incorporate “friendly entities” before making an initiative to acquire a company, so that they can be assured of a substantial stake in case of any eventuality.

“Logically, the market price and the open offer price indicate that the shareholder should sell the shares in the market instead of tendering in the open offer. However, it has been observed that many times friendly intermediaries deposit stocks on behalf of interested parties. Arun Kejriwal of Kejriwal Research and Investment Services says such stocks are offered at a discount even in open offers.

NDTV’s list of shareholders includes little-known names such as Confirm Realbuild, Adesh Broking House, Grid Securities and Drolia Agencies, each of which owns more than one per cent, while their cumulative holding stands at 7.13 per cent or around 46 lakh equity. Share is.

Interestingly, only Drolia Agencies and Aadesh Broking House hold shares of NDTV for over a year, while the other two entities are relatively new.

Moreover, as per the latest shareholding structure of NDTV, a total of 11 foreign portfolio investors (FPIs) hold a cumulative stake of 14.72 per cent in the company. More importantly, LTS Investment Fund, which has stakes in other Adani Group entities, holds 9.75 per cent or 62.85 lakh shares in NDTV.

Again, big questions remain over the future of the listed firm with both Adani and Roy – Prannoy Roy and wife Radhika Roy – holding significant stakes in the company. Founders Pranay and Radhika hold 15.94 per cent and 16.32 per cent stake, respectively, in NDTV.

In short, this is a bizarre case of an open offer by the Adani group, which seeks to acquire more NDTV shares after indirectly acquiring a 29.18 per cent stake in the media company.

It did so by acquiring the shares of Vishwapradhan Commercial Private Limited, which in turn acquired the shares of RRPR Holding Private Limited, the promoter group company of NDTV.

Read also: NDTV shares continue to rally on fourth day of Adani’s open offer

Read also: NDTV acquisition a ‘responsibility’, says Adani, India’s richest man

Source link

Spread the love

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.