Shares of New Delhi Television Ltd surged 20% today to hit the upper circuit, taking the overall gain to as much as over 60% in three trading sessions in a row. NDTV shares ended at Rs 56.75 on BSE on Tuesday, up 60% from Rs 35.45 at Thursday’s close. However, there seems to be no clear reason to which these gains could be attributed.
Earlier last week, the Delhi High Court upheld a decision of the Income Tax Appellate Tribunal that the Prannoy Roy and Radhika Roy-run news media company is entitled to income tax deduction on export of television news software. NDTV had sought deduction from taxability of income from export of news programming to Star TV as far back as 1999-2000, PTI reported.
Separately, the Business Standard reported over the weekend that Indian capital markets regulator SEBI (Securities and Exchange Board of India) had issued a show-cause notice to a Gurgaon-based company Vishvapradhan Commercial Pvt Ltd (VCPL) over failing to disclose that it has acquired the control of substantial promoter holding in NDTV and not making an open offer thereafter. The notice was reportedly issued in December last year.
If a SEBI action on the change in control of NDTV’s ownership triggers VCPL to make an open offer, it may end up benefitting the minority shareholders, a broker said requesting anonymity.
Earlier this year, the CBI (Central Bureau of Investigation) raided various premises of Radhika Roy and Prannoy Roy, the promoters of NDTV Group. The raids had its roots in a series of loans that the Roys took starting in 2008 because they wanted to buy back a large chunk of NDTV’s shares from the market.
The Gurgaon-company VCPL, which is now under the SEBI scrutiny for control of NDTV, had given the media firm an interest-free loan worth Rs 350 crore to the Roys and RRPR Holdings — a holding company of NDTV, as was reported by journalist Sucheta Dalal’s Moneylife. The Roys reportedly used this money to repay a loan from ICICI Bank in full. In exchange, the Roys were to issue convertible warrants to VCPL which had the option to convert those debentures into the equity shares amounting to 99.99% equity share capital of RRPR Holdings, which in turn owns 29.18% stake in NDTV Ltd.