Adani group gains effective control of NDTV

The controversy and the mistrust is over and it looks like the Roy family comprising of Prannoy Roy and Radhika Roy will officially hand over the mantle of leading NDTV to the Adani group. Currently, while Adani is the largest shareholder, Radhika and Prannoy Roy still hold a very significant 32.26% stake in NDTV. However, in their farewell letter to the NDTV group, Prannoy Roy and Radhika have agreed to sell up to 27.26% stake out of their remaining 32.26% shareholding in NDTV to Adani group. Post this deal, the Roy family will hold just about 5% in NDTV while the Adani group will hold 64.71% of NDTV, giving them virtually effective majority control of one of India’s oldest media groups.

The Roy family comprising family, first lost a big chunk of NDTV to the Adani group, when Adani bought out VCPL, which had an indirect 29% stake in NDTV through its holding company RRPR Holdings Private Limited. Later, with the open offer just completed, the Adani group already has 37% in NDTV making them the largest shareholder. Perhaps, the Roy family realized that it was not a question of whether but when the control would effectively pass on to the Adani group. That has led the Roy family to sell out most of their holdings in NDTV so that Adani can have a free hand in the new business. It remains to be seen what business direction the company takes in the coming years.

Adani group has massive and aggressive plans in the media space through their own media company, AMG Media Network. There is a stark irony to the people who are the directors in AMG Media Network and have now become representative directors on the board of RRPR Holdings. Senthil Chengalvarayan and Sanjay Pugalia have been nominated to the board of the NDTV holding company, apart from the CFO of the Adani group. With that move, it was always clear that the Adani group eventually wanted majority control of NDTV and wanted to influence its editorial policy, which is normally the key to any media outfit. This also gives them a competitive edge with Reliance group, which already owns CNBC channels in India.

The separation was always coming. The first step was that Radhika Roy and Prannoy Roy had already stepped down from the board of RRPR Holdings Private Limited after the Adani group took full control of the business. That was about a month ago. During the open offer, Gautam Adani and the Roy family had been in constant touch. In fact, Adani had assured the Roy family that he would retain most of the editorial standards set and would let the business be managed by the professionals. Apparently, that has satisfied the Roy family and they have agreed to sell most of their stake in NDTV to Adani group and step down.

While Radhika and Prannoy Roy retain a 5% stake in NDTV, it is at best a long term holding in the media sector as an investment. Clearly, the days of the Roy family driving content and editorial policy is over. Media is a business that has always struggled to sustain without adequate corporate support and standalone editorial policy can only help up to a point. For the turnstiles to keep ringing, the media outfits need a solid advertisement and publicity franchise of the kind that the Times group has built. NDTV had done its best to survive for the last few years. The Roy family would surely be missed as would the traditional stamp of NDTV. But in the rough world of real business, this was the best option for NDTV.