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The Adani Group on Friday gained full control of news broadcaster NDTV Limited after it acquired most of the stake of founders Prannoy Roy and Radhika Roy, at a premium of almost 17% over the rate it paid to minority shareholders of the firm.

The Adani Group now holds 64.71% of New Delhi Television Ltd (NDTV), according to a regulatory filing.

In a later development, NDTV said the Roys, along with four other directors, have resigned following the change of ownership.

Besides, the former promoters of the news broadcaster have asked to be re-classified from ‘promoter’ to ‘public’ category shareholders, which was approved by the Board of Directors, subject to the approval of the shareholders of the company, stock exchanges, and other necessary approvals.

The other directors who have resigned are Darius Taraporvala and independent directors Kaushik Dutta, Indrani Roy, and John Martin O’Loan.

Prannoy and Radhika were the Executive Co-Chairpersons of NDTV. Prannoy Roy held 15.94% stake in NDTV, of which, he has sold all but 2.5% stake. His wife, Radhika Roy, too sold all but 2.5% of the 16.32% stake she had in NDTV.

Meanwhile, NDTV said its board also approved the appointments of Aman Kumar Singh as a non-executive additional director and Sunil Kumar as an additional director.

The Adani group, run by Asia’s richest man Gautam Adani, used RRPR Holdings Pvt Ltd, a company that was founded by the Roys and bears their initials in its name, to buy 27.26% from Prannoy Roy and Radhika Roy at Rs 342.65 per share, it said.

The price paid to Roys, which translates into Rs 602 crore, is almost a 17% premium to Rs 294 a share Adani Group offered in an open offer to minority shareholders after taking control of RRPR Holdings. Shares of NDTV closed at Rs 345.60 apiece on the BSE.

In a statement, the Adani group said subsequent to the change in control, the Board of NDTV has been further strengthened with the appointment of two more members – Sunil Kumar (former IAS officer) and Aman Kumar Singh (former civil servant).

These two appointments are in addition to the two Adani Group nominees, Sanjay Pugalia and Senthil Sinniah Chengalvarayan, who were appointed last week.

All the new directors have diverse experience in the fields of news, literacy and public policy, governance, media, branding, communication, technology, and economy and their rich set of competencies, skills and experience will be extremely valuable to NDTV, it added.

Commenting on the development Gautam Adani, Founder and Chairman of the Adani Group, said, “The Adani Group is privileged to further bolster NDTV with world-class infrastructure and talent and transform NDTV into a thriving multi-platform global news.”

Adani Group first acquired Vishvapradhan Commercial Private Limited, a little-known company that had given Rs 403 crore of an interest-free loan to RRPR Holdings in 2009-2010 in exchange for warrants that allowed it to buy a stake in the newsgroup at any time. Adani group exercised those rights in August this year, which NDTV said was done without its consent.

By virtue of that, the Adani group took control of RRPR Holdings, which held a 29.18 per cent stake in NDTV. Thereafter, it made an open offer to acquire an additional 26 per cent from public shareholders.

That open offer found investors willing to sell over 53 lakh shares of NDTV despite the deep discount on the stock”s trading price. The stock tendered translated to an 8.26 per cent shareholding.

Its stake through RRPR Holdings, open offer acquisition and buying 27.26 per cent from Roys have now given Adani group full control of NDTV with a 64.71 per cent interest.

Market experts said Adani group paid Roys a higher price using a so-called inter-se transfer or share sale between entities linked to NDTV’s owners, which allows paying a premium. RRPR Holdings is an existing NDTV holding company that has bought shares from Roys.

Also, Adani group announced the share purchase from Roys a full 18 days after the close of the open offer – a timeframe that allows the takeover code not to kick in.

“RRPR, an indirect subsidiary of the company and member of the promoter/promoter group of NDTV, has acquired a 27.26% equity stake in NDTV from Prannoy Roy and Radhika Roy by way of inter-se transfer…,” said a regulatory filing from Adani Enterprises.

On December 23, Prannoy Roy and Radhika Roy announced they would sell 27.26% out of their remaining 32.26% shareholding in the NDTV to the Adani Group.

“Vishvapradhan Commercial Private Limited (an indirect subsidiary of the company) holds an 8.27% equity stake in NDTV and RRPR (prior to the present acquisition) held 29.18% equity stake in NDTV. Consequent to the present acquisition, RRPR will hold 56.45%,” the filing said.

Adani Group acquired Roys’ shares at the price of Rs 342.65 per share. Based on this price, the sale of 1.75 crore shares would have fetched the Roys up to Rs 602.30 crore.

“The acquisition was completed on December 30, 2022 on the block deal window of NSE,” it added.

NDTV will give Adani Group a footprint in the media space as part of its broader diversification spree that has led to the expansion of the conglomerate beyond coal mining and ports into airports, data centres, cement, and digital services.

In 2009, RRPR, or Radhika Roy Prannoy Roy Holdings Private Limited, took an interest-free loan of Rs 403 crore from a firm linked to Reliance Industries that eventually ended up with a closely-held firm Vishvapradhan Commercial Pvt Ltd (VCPL). The loan allowed VCPL to convert warrants into shares of RRPR Holdings, which held a 29.18% stake in NDTV.

In August, Adani Group acquired VCPL and sought the conversion of warrants arising from unpaid loans into equity.

NDTV initially said the move was “executed without any input from, conversation with, or consent of” its founders. But late last month, the conversion was agreed to, and Adani got 29.18% shares of NDTV.

Post takeover, Adani Group appointed two of its executives, Sudipta Bhattacharya and Sanjay Pugalia, to the RRPR Holdings board, as well as Senthil Chengalvarayan, a journalist who is an independent director at Quintillion Business Media Pvt, another media firm in which Adani bought a stake earlier this year. Pugalia, a former journalist, is the CEO and editor-in-chief of media initiatives at Adani Group