NDTV’s Rights Issue: A lifeline for broadcaster or a power play for Adani?

New Delhi: NDTV Limited, the legacy broadcaster that became part of the Adani Group in 2022, is at another inflection point. 

Its board of directors is set to meet on September 2, 2025, to consider a fundraising exercise through a rights issue or other equity instruments. 

On paper, this looks like a routine corporate action. In reality, it could shape NDTV’s financial survival, redefine promoter control, and alter the competitive dynamics of India’s news industry.

BestMediaInfo.com takes a deep dive into NDTV’s planned rights issue to answer numerous queries from industry stakeholders and retail investors, such as what it means, why it matters, how it impacts investors, and what it signals for the broader media ecosystem.

Lessons from Zee and Network18

The Indian broadcast industry has already seen attempts at similar capital restructuring, some successful, some disastrous.

Take for example, Zee Entertainment. Once the crown jewel of India’s entertainment industry, Zee tried repeatedly to secure lifelines. Its merger with Sony was meant to solve exactly the kind of problems NDTV now faces: funding digital growth, strengthening distribution, and repaying debt. But governance disputes, promoter infighting, and regulatory pushback sank the deal earlier this year. 

In the meantime, Zee’s efforts to raise fresh capital on its own have hit a wall, because investors distrust a company weighed down by litigation and credibility issues. Zee’s failure shows that a rights issue or merger can only work if markets trust the management and promoters to deliver.

Now look at Network18, owned by Reliance. Its fundamentals are not vastly better than NDTV’s, but Reliance’s balance sheet changes the picture entirely. Losses or rising costs don’t spook investors when Mukesh Ambani can bankroll expansion at will. 

Reliance has also integrated its media arm with its digital platforms, Jio, JioCinema, and telecom services, creating scale that justifies long-term investments. Where Zee failed due to mistrust and promoter weakness, Network18 succeeded because of promoter strength and clarity of vision.

NDTV sits somewhere in the middle. It is making losses like Zee, but unlike Zee, it has a promoter with deep pockets and a long-term appetite for control. The rights issue reflects that: a company struggling operationally but cushioned by Adani’s capital. Unlike Zee, NDTV is unlikely to run out of money. But unlike Network18, it still lacks integration into a broader ecosystem that guarantees revenues.

How large could the rights issue be?

A rights issue is one of the oldest ways for listed companies to raise fresh money. Instead of borrowing from banks or inviting new investors, a company creates new shares and offers them to its existing shareholders first. The “rights” to buy these shares are given in proportion to the number of shares the investor already holds.

The offer price is usually set lower than the current market price. This discount is meant to reward existing shareholders for backing the company and to encourage maximum participation.

The eventual size of NDTV’s rights issue will be determined not just by market appetite but also by the company’s authorised capital, the legal ceiling on how many shares it can issue.

According to its Annual Report 2024-25, NDTV’s authorised share capital stands at Rs 173.3 crore, divided into 43.32 crore equity shares of Rs 4 each. Of this, only 6.44 crore shares have been issued, subscribed, and fully paid-up. In other words, NDTV has headroom to issue almost 36.9 crore additional shares without first seeking shareholder approval to increase its authorised capital.

This is a significant cushion. For context, the current equity base of 6.44 crore shares means even a moderately structured rights issue could sharply expand the share count. A 1-for-2 rights issue, for example, would add ~3.22 crore shares, taking the total to ~9.66 crore. A 1-for-1 issue would double the base to nearly 12.9 crore shares. In extreme terms, NDTV has the legal room to expand its share capital almost sixfold before hitting the authorised cap.

The price band will be the other critical variable. At today’s market price of around Rs 140, the board is expected to set the rights issue price at a meaningful discount, likely in the Rs 90-120 range. This discount serves two purposes: incentivising retail and public shareholders to participate, and ensuring the issue is fully subscribed.

With the Adani Group already holding 64.71% of NDTV through RRPR Holding and Vishvapradhan Commercial, its full subscription is a given. If retail and institutional shareholders also participate proportionately, the balance of power remains unchanged. But if public subscription is weak,  as often happens when companies report consecutive losses, Adani can easily mop up unsubscribed shares. Even a 10% rise from current levels would take the promoter shareholding close to 75%, the delisting threshold. Crossing it would give Adani the option to take NDTV private, subject to SEBI norms.

NDTV has the legal flexibility to structure a sizeable rights issue and raise hundreds of crores without delay. But the real question is not how much it can raise, but how the participation pans out. For Adani, this is an opportunity to tighten grip. For small shareholders, it is a test of conviction - either put in more money to protect their stake, or see their holding diluted in a bigger pool of shares.

NDTV’s financial health: mounting pressure

The rights issue comes against a backdrop of rising losses. NDTV’s quarterly results for April-June 2025 (Q1 FY26) showed a standalone net loss of Rs 65.55 crore, widening 48.4% from Rs 44.15 crore a year earlier. On a consolidated basis, including subsidiaries such as NDTV Convergence and NDTV Worldwide, the loss ballooned to Rs 70.65 crore, up from Rs 47.02 crore in the same quarter last year.

Marketing and distribution costs have jumped sharply. On a standalone basis, they rose from Rs 31.8 crore to Rs 40.7 crore year-on-year. On a consolidated basis, the figure was even higher at Rs 57.2 crore, marking a 26% jump. In plain terms, NDTV is spending aggressively to stay relevant in a crowded market, but revenue growth is lagging behind.

The broadcaster has ambitions to pivot into a digital-first media company. This means new products, new content formats, and deeper distribution. But all of that requires capital, and internal accruals are not enough. A rights issue is, therefore, both a necessity and an opportunity.

How much does the ownership structure matter?

NDTV currently has about 64.5 million shares outstanding. The Adani Group, through RRPR Holdings and Vishvapradhan Commercial, owns around 64.7% of these shares. Public shareholders own roughly 35%, while institutional investors such as mutual funds and foreign portfolio investors have almost no presence. The company’s founders, Prannoy and Radhika Roy, together hold less than 5% and are no longer classified as promoters.

This ownership pattern has a crucial implication. In companies with a large institutional presence, rights issues often see broad-based subscription. In NDTV’s case, with promoters already holding nearly two-thirds and public investors forming the rest, the outcome of the issue depends heavily on how many retail and small corporate investors choose to participate.

If every shareholder buys their full entitlement, the ownership structure remains largely the same. But this rarely happens. Retail investors often hesitate to put in fresh money, especially when the company is reporting losses. Promoters, on the other hand, almost always subscribe fully, both to show commitment and to protect their control. If the public skips, promoters can mop up the unsubscribed portion, leading to a higher percentage holding.

For Adani, this presents a strategic opening to consolidate control further. With promoters already at ~65%, even a modest under-subscription by the public could push the figure closer to 70%. Crossing the 75% threshold would allow NDTV to explore delisting, offering minorities an exit and potentially taking the company private.

What does this mean for small investors?

For retail shareholders, the rights issue is a test of conviction. Consider an investor holding 100 NDTV shares bought at Rs 140 five years ago. If the company announces a one-for-two rights issue at Rs 100, this investor is entitled to buy 50 more shares at the discounted price.

If they subscribe, they spend another Rs 5,000, but their average cost per share drops, and their ownership percentage remains intact. If they ignore the offer, their 100 shares remain, but in a larger pool of shares they represent a smaller slice of the pie.

Markets also adjust downward after a rights issue. In this example, the theoretical ex-rights price might fall to around Rs 127. The investor who skipped the issue sees the value of their existing holding fall from Rs 14,000 to Rs 12,700. That is the hidden cost of not participating.

Companies cannot force shareholders to buy, but the financial penalty for skipping is dilution, both in ownership percentage and in value.

How the numbers could play out

NDTV currently has 6.44 crore issued shares, of which the Adani Group controls 64.71% (4.17 crore shares). Public shareholders, including retail investors and the Roys, together hold 35.29% (2.27 crore shares).

If the board opts for a 1-for-2 rights issue at a discounted price band (say Rs 90-120 against the current ~Rs 140), here’s how the ownership could shift under different subscription scenarios:

(Note: These scenarios assume a 1-for-2 rights issue. A 1-for-1 issue would double the equity base to ~12.9 crore shares, magnifying dilution risks even further.)

Industry implications: money, media, and influence

The NDTV rights issue raises bigger questions about India’s media landscape. On one hand, it shows that deep-pocketed promoters are essential for survival in a market where advertising revenues are under pressure and digital transformation is expensive. On the other hand, it highlights the risks of concentrated ownership in a sector that plays a critical role in democracy.

If NDTV raises substantial funds and executes its digital-first strategy well, it could emerge stronger and more competitive against rivals like Times Now and Republic. But if the issue results in further concentration of ownership with Adani, concerns over editorial independence and media pluralism will intensify.