NDTV rights issue: A retail investors’ playbook

New Delhi: With NDTV preparing to raise money through a rights issue, the role of retail investors is key to the success of the franchise. Simply put, if they participate fully, NDTV can achieve its Rs 394 crore target. If not, the listed company risks losing its listing.

Since the details were announced last week, BestMediaInfo.com has been flooded with questions from both retail investors and industry stakeholders.

This article presents a detailed analysis of the offer from a retail investor’s point of view.

What is on offer

Three new shares for every four you already own. The price is Rs 82 per rights share. If the offer is fully taken, NDTV will issue up to about 4.835 crore new shares. That will take the total number of shares to roughly 11.28 crore after listing.

While the record date was Friday, September 12, 2025, rights got credited to demat accounts by September 16. 

The issue opens on Monday, September 22. The last day to trade Rights Entitlements on exchange is Friday, October 3. 

The issue closes on Wednesday, October 8. Listing of the new shares is expected around Monday, October 13.

The typical 90 per cent minimum subscription condition does not apply for an issue with these stated objects. That means the offer can close even if many investors pass. Any undersubscription can be allotted as per the rules while maintaining the minimum public shareholding.

The ‘purpose’

NDTV declared that the fresh money will be used for three things:

Debt repayment: The big line item here is an inter corporate deposit from Adani Enterprises priced at 8.5 per cent. As of August 31, 2025, the outstanding on this loan was around Rs 251.95 crore. NDTV plans to use about Rs 229 crore from net proceeds to repay part of this borrowing.

Spend on growth levers: About Rs 71 crore is earmarked for distribution and market expansion, for marketing and brand building, and for developing new intellectual properties, both television and digital. 

General corporate purposes: Up to Rs 94.308 crore can be used for working capital and other lawful purposes within the regulatory cap of 25 per cent of gross proceeds.

Read together, retail investors find debt down, equity up, finance cost lower, some fuel for reach and brand.

Even as the issue does not fix revenue by itself, it does buy time, and it reduces pressure on the profit and loss account from interest.

Media balance sheets are sensitive to finance cost because margins are thin in a slow ad economy, and repaying high-cost borrowing reduces finance cost at once.

A rights issue gives the value of the discount to the existing shareholder base, who can either subscribe and take cheaper stock or sell the entitlement and take cash.

The risks that matter

It is often said that balanced decisions begin with risks, and the following factors would be at play for retail investors;

Operating losses

If operations do not improve, new equity will get consumed even after interest falls. A recap makes the balance sheet safer, but it does not make the business stronger by itself. Ratings, yields, content and distribution execution must do the heavy lifting.

Debt repayment

A large part of the proceeds will repay a loan from a group company. This has been disclosed, and necessary approvals are in place.

No 90 per cent floor and no underwriting

The issue can still close even if many investors pass. This essentially means that any under-subscribed portion can be allotted within the rules and within the requirement to maintain public float. The ownership mix can shift more than casual investors expect.

Dilution math

A three for four issue increases the share count by about 75 per cent if fully subscribed. Future profits, whenever they come, will be spread over a larger base. If you neither subscribe nor sell, you give up value and you lose percentage ownership.

Making a decision

In the next year to year and a half, do investors see a path where lower interest plus the Rs 71 crore push on distribution, brand and new IP reduces losses meaningfully? Those whose answer is no, are likely to sell the entitlement and keep the cash. Those in agreement will subscribe to avoid dilution and back the cleaner balance sheet.

Some retail investors expressed their concerns about NDTV using proceeds for repaying a loan to a group company. Those who are not comfortable may skip subscription.

What changes for NDTV after the issue

If the plan works, the debt will fall, and so will the interest. The Rs 71 crore pool strengthens distribution and brand.

Program brands and digital formats attract sponsorship. As the ad market improves, yields recover. With a larger equity base the earnings per share will need more profit to look strong, but the lower finance cost narrows the loss line first. The balance sheet looks cleaner and the business has space to recover.

In case the plan stalls, losses continue, which eats into the fresh equity. The balance sheet looks safer but not stronger. The share price tends to drift to fundamentals after the one time adjustment for rights. Over time the company may need to restructure costs, sell assets, or raise more capital. Those who subscribed carry that risk. Those who sold entitlements kept value without adding cash.

Because there is no underwriting and no 90 per cent floor, investors who do subscribe can end up with a larger stake if many skip, while the minimum public shareholding is maintained. Promoters have signalled they will take up their own rights. If public holders pass in large numbers, promoter influence can rise within the regulations.