Explained: NDTV, the loans that cost control, and the paths Prannoy Roy didn’t take

New Delhi: For years, NDTV’s crisis looked like a newsroom story. But a closer look reveals it was a capital-structure story of a promoter holding company borrowing against control, swapping interest pain for a contract that made a future loss of control almost inevitable.

BestMediaInfo.com reconstructs how that choice played out, what Prannoy Roy actually pocketed on exit, and what he could have done differently, earlier and later, to avoid the outcome.

The day the balance sheet overtook the newsroom

It is tempting to look at NDTV’s change of control in 2022 as a single dramatic moment.

The real story is slower and more structural. It begins in 2008-10, above the listed company, inside the promoter vehicle RRPR Holding Pvt Ltd (RRPR).

RRPR took on debt to consolidate promoter ownership of NDTV.

First, it borrowed from Indiabulls; then it refinanced with ICICI Bank (about Rs 375 crore) against pledged NDTV shares.

In 2009-10, RRPR replaced that bank exposure with a zero-coupon facility from VCPL (roughly Rs 404 crore across two tranches).

The cash solved an immediate problem, expensive bank debt and pledged shares, while embedding a longer fuse: VCPL’s rights over RRPR. Those rights later allowed the option-holder to take 99.99% of RRPR and, through it, the 29.18% RRPR held in NDTV.

To be clear, the liability sat with RRPR (the promoter company), not with NDTV the listed company.

A future rights issue by NDTV could never have been used, legally or ethically, to retire a promoter-side personal loan. The “patient” in 2009 was RRPR, not NDTV.

Why borrow at the promoter level at all?

Because the promoters were consolidating control during a turbulent period.

In 2007-08, a negotiated block purchase triggered a mandatory open offer under the takeover rules, which meant the promoters had to show proof of funds to pay any shareholder who might tender.

Debt was the practical route: first Indiabulls, then ICICI against pledges, and finally VCPL’s zero-interest money that retired the bank loan.

The intent wasn’t to fund NDTV’s operations, but to own more of NDTV.

The VCPL line looked like oxygen: it carried no interest and provided immediate relief from pledged-share pressure without public dilution. But the price was hidden in the control mechanics. VCPL’s warrants and options, signed in 2009-10, were not decorative. They were designed to be exercised.

“Why didn’t the Roys just do a rights issue back then?”

Because a rights issue at NDTV would not fix an RRPR problem. The contracts of 2009 were between RRPR and VCPL, and NDTV wasn’t a party.

Even if NDTV had raised money, the proceeds could not simply be diverted to pay the promoters’ personal debt.

And even if RRPR had found money somewhere else, the VCPL call, the lever that allowed near-total takeover of RRPR, would not automatically vanish. The instrument lived in RRPR’s contract.

There was also the post-Lehman market reality. Media valuations were weak; litigation and regulatory noise clouded confidence. A big, dilutive equity raise at NDTV in 2009-12 would have been slow and value-sapping, and still wouldn’t have defused VCPL’s rights.

What changed in 2022, and why the outcome felt mechanical

In 2022, the option changed hands. Adani’s media holding acquired VCPL, and with it, the right to take 99.99% of RRPR.

Once exercised, the chain was simple: step into RRPR, inherit its 29.18% of NDTV, trigger the mandatory open offer, and then complete the control move via a block purchase from the founders.

To those who see this as a long-planned trap, it was a short-term financing decision that swapped interest outgo for an option over control. A rational choice in 2009 can still be the wrong choice in 2022.

Did Prannoy Roy make enough money on exit?

Yes, in rupees. The founders’ final sale of their shares is widely estimated to have fetched about Rs 600 crore. That headline number is true and deserves to be stated cleanly.

Cash-wise, it was a profitable exit. Strategically, it was a forced exit.

There is another way to look at it. Back in 2009-10, the promoters essentially sold an option on their control to avoid a large public dilution, intrusive strategic capital, or high-interest bank debt. A decade later, the option was exercised by a new owner.

Could Roy have avoided the outcome?

Yes, at several points, with enough pain.

Earlier (2009-12): He could have accepted a deeply discounted equity raise at NDTV to strengthen the operating company and reduce reliance on promoter pledges, or brought in a strategic investor with strong rights.

That would have been slow, value-dilutive and culturally difficult, but it would not have created a control option against RRPR. A plain-vanilla refinance of the ICICI loan (instead of VCPL) was another path: higher interest, tighter covenants, fewer surprises.

Mid-course (2015-19): The cleanest fix would have been to buy back or refinance the VCPL instrument, expensive and messy, but decisive. It didn’t happen.

Endgame (2020-22): A last-minute white knight at RRPR to replace VCPL with ordinary debt or equity might have preserved control, but anyone writing that cheque would have asked for strong rights. No such backer appeared, and the mechanism ran its course.

None of these paths was easy. But all of them were easier than losing control later.

What Adani did differently after control

Adani bought the lever (VCPL), pulled it, and then set about cleaning the operating company’s balance sheet the regular way.

NDTV took an inter-corporate deposit (ICD) from an Adani entity during a loss-making stretch, and now proposes to swap debt for equity through a rights issue.

The stated allocation is orthodox: repay borrowings in part; invest in distribution, marketing and new IP; keep a portion for general corporate purposes. That is the textbook playbook for a newly consolidated asset: take out interest, buy time, and spend a defined pot on growth.

The rights issue also contains the usual flexibilities, such as the ability to allot under-subscribed shares to specific investors, with prior public disclosure, ensuring the recap happens even if retail appetite is thin.

The 90% minimum-subscription rule does not apply to rights issues under current regulations, further de-risking completion. These are standard, lawful features of a modern rights process, and they matter to execution certainty.

​​What Adani actually paid

To secure control of NDTV, the Adani group first bought the lever, VCPL, and then paid to close out the cap table. Across the three legs of that sequence (acquiring VCPL, the mandatory open offer, and the founders’ block sale), the total cash outlay is widely estimated at about Rs 900 crore.

Control, however, is only the opening move. Once inside, NDTV still needed working capital through a loss-making patch. That is where the inter-corporate deposit (ICD) comes in. 

Over roughly the past two years, about Rs 300 crore was extended to NDTV as an ICD from an Adani entity, carrying a conventional interest rate and rolling as the broadcaster worked through weak operating quarters. In other words, after paying to own the asset, the new owner also had to fund it.

What the current rights issue means (and doesn’t)

A rights issue reduces interest and extends runway; it also dilutes existing shareholders. If management converts the Rs 71 crore earmarked for distribution, brand and new intellectual property into ratings, revenue and operating leverage, equity holders may come out ahead. If not, equity holders will wear the downside that debt-holders used to carry. That is the risk transfer every recap involves.

For those asking “why should public money repay an Adani ICD?”, the honest answer is: this is company-level debt and this is company-level equity funding. It cleans the P&L of interest and makes the balance sheet lighter. It does not guarantee a turnaround. It creates the conditions for one.

What happened when

2008: The promoters move to consolidate. Early financing via Indiabulls is put in place; pledges backstop the exposure. The goal is control and a buffer against market volatility.

October 2008: The Indiabulls facility is replaced with an ICICI Bank loan of roughly Rs 375 crore, secured by pledged NDTV shares. The debt is at RRPR, not at NDTV.

July 2009 / 2010: VCPL arrives with zero interest and heavy rights. RRPR takes ~Rs 350 crore in 2009 and Rs 53.85 crore in 2010, uses it to repay ICICI, and relaxes the collateral pressure. The control risk moves off the page, into the contract.

2010s: The promoters continue to consolidate into RRPR (for instance, a 3.18% internal transfer in March 2010), keeping the RRPR stake at 29.18% and the combined promoter holding north of 60% for years. Control at the listed company looks safe; the RRPR contract remains a latent risk.

2018-2021: SEBI actions and appeals raise the governance temperature around NDTV and RRPR/VCPL; some penalties are reduced and parts stayed. It is an environment in which raising large, clean public capital would always be harder than in a normal media cycle.

2022: VCPL changes hands. The new owner exercises the RRPR option, steps into 29.18%, runs the open offer, and completes control with a block from the founders. The contracts of 2009-10 decide the outcome in 2022.

2024-25: NDTV takes an ICD from an Adani entity to bridge losses, then proposes a rights issue to repay part of the ICD, invest in distribution/brand/new IP, and fund general corporate needs. The recapitalisation is classic: debt down, equity up, time bought.

Key numbers

ICICI at RRPR (2008): ~Rs 375 crore against pledged NDTV shares; later repaid.

VCPL to RRPR (2009/10): ~Rs 350 crore + Rs 53.85 crore; zero coupon, control rights embedded.

RRPR’s stake in NDTV: 29.18%; the hinge on which control turned.

Founders’ cash on exit: ~Rs 600 crore (approx., by market arithmetic at the time).

NDTV rights, objects today: part-repayment of borrowings; distribution, marketing, IP; general corporate purposes.

Rights process flex: 90% minimum not applicable; under-subscribed portion may be allotted to specific investors with prior disclosure.

Effectively, Prannoy Roy didn’t “lose NDTV in 2022”. He sold the option to lose it in 2009-10 when RRPR accepted zero-coupon money with a control hook. That choice postponed pain and preserved pride at the time.

Years later, it determined the end. The ~Rs 600 crore the founders took home is real and should not be hand-waved away. But it came after ceding the one thing founders value above cash: control.

There were other paths, each uglier than the last: a painful equity raise at NDTV, a costly plain-vanilla refinance at RRPR, a strategic investor with strings.

None was pursued decisively enough to defuse the contract that mattered. When that contract changed hands, the finish was formulaic.

Remember: debt terms live longer than news cycles. Choose them as if they will one day write your final headline, because sometimes, they do.