NDTV Rights Issue: 2% of public shares subscribed in 4 days; what’s next

New Delhi: NDTV’s ongoing Rs 396.5 crore rights issue, which opened on September 22, 2025 and closes on October 8, 2025, is shaping up to be more than just a capital-raising exercise.

As of Day 4, trading in Rights Entitlement (RE) shares on the stock exchanges stood at 3,46,090, representing 0.71% of the 4.83 crore new shares on offer. The issue entitles shareholders to apply for three new shares for every four held, at Rs 82 per share.

The issue aims to raise Rs 396.5 crore. Of this, approximately Rs 231 crore is earmarked for repayment of loans owed to Adani Enterprises, Rs 71 crore for marketing, content expansion and distribution, and Rs 94.3 crore for general corporate purposes.

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

Before the rights issue, NDTV’s total outstanding shares stood at 6.44 crore. Of these, 4.17 crore shares belong to the Adani Group, which holds roughly a 64.7% stake in the company. The remaining 35.2% (2.27 crore shares) belongs to the public.

Post-issue, NDTV is offering 4.83 crore shares in a 3-for-4 ratio (three new shares for every four held) at Rs 82 per share. This will take the total shares outstanding to 11.27 crore.

Under the rights mechanism, the promoter group (Adani), which holds 4.17 crore shares, would be entitled to 3.13 crore new shares, taking its total to 7.30 crore shares. Public shareholders are entitled to 1.70 crore new shares, which would ideally take their holding to 3.97 crore shares.

Based on public participation against the base of 1.70 crore entitled shares, the subscription stands at ~2% on Day 4.

If both the promoter group and public shareholders fully subscribe to their entitlements, NDTV will raise Rs 396.5 crore, of which around Rs 230 crore is earmarked for repayment of the Inter-Corporate Deposit (ICD) from Adani Enterprises Limited (AEL).

An Inter-Corporate Deposit is a loan that one company gives to another. It is usually unsecured and carries a fixed interest rate. Companies use it for flexibility and speed, especially when bank finance is slow or expensive.

NDTV availed an ICD facility of up to Rs 300 crore from AEL. The loan carries an annual interest rate of 8.5% and matures on March 31, 2029. As of August 31, 2025, NDTV owed Rs 251.947 crore to AEL under this loan.

According to stock-exchange filings, NDTV will channel a major chunk of the rights proceeds to reduce the loan of around Rs 251 crore. Notably, this is similar to what the Adani Group would spend to take up its full entitlement (3.13 crore shares × Rs 82 = Rs 256 crore).

Alongside this, the public would need to subscribe to 1.70 crore shares, which amounts to roughly Rs 140 crore at Rs 82 per share.

Simply put, the ~Rs 250 crore put in by Adani to maintain its stake will effectively retire the very loan NDTV seeks to reduce, and the fresh external money raised would be the ~Rs 140 crore expected from the public.

Scenarios

Scenario 1: Public participation at 70% of entitlement

At 70% participation, about 1.19 crore shares taken up by the public, the company remains on a safe path. Promoters end at roughly 67.8% and the public at 32.2%.

Here, NDTV raises close to Rs 359 crore. This is the minimum realistic level of public participation needed to protect liquidity and compliance while ensuring capital inflow.

Scenario 2: Public participation at 50% of entitlement

If public shareholders subscribe to only half their entitlement, about 85 lakh shares, while promoters take their full portion, promoter stake rises to around 71.2% and public falls to about 28.8%.

In this scenario, NDTV raises about Rs 326 crore, and the reduced public float remains above SEBI’s 25% requirement, though liquidity would be tighter than under full participation.

Scenario 3: Public under-subscribes; promoters mop up the rest (the grave phase)

If public investors do not fully take up their entitlement, the balance can either remain unsubscribed or be picked up by the promoter group.

For instance, if public investors take up only 40% of their entitlement, promoter holding would rise significantly because they would end up with not just their own share but also most of the unsubscribed public portion.

In such a case, promoter holding could climb to around 77-78%, while public shareholding would fall to 22-23%, breaching SEBI’s 25% minimum public shareholding norm.

If not corrected through subsequent measures, such as promoters offloading shares via an OFS, QIP or secondary sale, the company risks non-compliance with listing norms, unless this is an intended move.

If public participation remains weak, the optics shift from growth to control. The balance sheet may look cleaner, but the public float could fall below mandated levels.