Gautam Adani’s takeover of NDTV may have caused disquiet in the news industry, but it has proved lucrative to several employees of the TV news network. The billionaire’s purchase of about 30 percent of the broadcast company, and whispers about it in the preceding months, sent its share price soaring, enabling several top executives to make a tidy profit.
AMG Media Networks Limited, the fledgling media arm of Adani Enterprises, announced on August 23 that it was acquiring 29.18 percent of NDTV. The deal kicked in an open offer that enables Adani Enterprises to acquire another 26 percent of the media company, making it the majority shareholder. The open offer gets rolling on October 17.
The next day, NDTV shares were trading for Rs 384.50 on the Bombay Stock Exchange and Rs 388.20 on the National Stock Exchange, rising from 356.90 and 358.65, respectively. The day after, the price went up to 403.70 on BSE and 407.60 on NSE. By September 5, the share price had risen to 540.85 on BSE and 545.75 on NSE, the highest since 2008. The price, in effect, had doubled in a month. The TV company’s market capitalisation now is Rs 2,899 crore, making it the most valuable listed media company after TV 18 Broadcast and Network 18, according to a report in the Print. NDTV is twice as valuable as the TV Today Network, and almost three times as valuable as Zee Media.
Suparna Singh, NDTV Group president, sold all her 53,726 shares for about Rs 2.6 crore on September 1, when the company’s shares were trading at Rs 490.60 on the Bombay Stock Exchange and Rs 495.05 on the National Stock Exchange.
Basker Kasinathan, head of administration, had sold 11,000 of his 11,640 shares on August 22 for Rs 39 lakh. Hannah Issac, a senior executive, sold 3,000 of her 10,000 securities between August 18 and August 23, for a total of Rs 10.7 lakh. Issac had also sold some shares in March, around the same time Sonia Singh, editorial director of NDTV, sold 32,500 shares for Rs 79 lakh.
They all disclosed the trades to the stock exchanges as required by the Securities and Exchange Board of India’s guidelines prohibiting insider trading. If an employee has access to confidential information about their company and uses that to trade in its stocks or securities, it is known as insider trading. If the information is public, it’s not insider trading.
“Insider trading is when the person has access to news that no one else does," a financial planner who tracks stock markets explained.
In the case of NDTV, he said, there was “a sense” for the last six months that it could be up for purchase. “And a few people cashed out. NDTV isn’t usually a stock that people track, but stock prices rising like this happens often. The market goes by perception. It frontends good and bad news and factors in all future good news.”
Indeed, the share price of NDTV began rising about a year ago, when there was first talk about Adani Enterprises moving to acquire it. The media company issued a statement at the time declaring that it was “not in discussions now, nor has been, with any entity for a change in ownership or a divestment of any sort”. It also denied having any information as to why “there’s a sudden surge in the stock price”, adding that “NDTV cannot control unsubstantiated rumours”, or “participate in baseless speculation”.
In March 2022, Adani Enterprises signed a deal to purchase 49 percent of Quint Digital Media, which runs the digital news platform BQ Prime, further fuelling the rumours about the takeover of NDTV. It was around that time that Sonia Singh and Hannah Isaac sold some of their NDTV shares.
“If the employees have sold their shares and reported it to BSE, it is under the rim of the legal purview,” Monil Mehta, a Bank of America analyst, said. “They must have considered the legal possibilities and done it.”
In cases of mergers and acquisitions, he added, employees sometimes have the option to sell their shares but that depends on the clauses of the particular company.
The Adani group, according to its open offer letter, “intends to support the management of NDTV in their efforts towards sustained growth of the company". It decided to purchase a stake in the media company, the group says, because it considered NDTV, with its leading position in the news industry and its strong and diverse reach across genres and geographies, a suitable platform to deliver on the conglomerate's vision.
The acquisition is further in line with the Adani group’s objective of setting up, the letter states, a “credible next generation media platform with emphasis on digital and broadcast segments” which seeks to empower Indian citizens, consumers, and those interested in India with information and knowledge.
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