VCCircle

The promoters of the leading Indian media company NDTV Ltd have bought 7.73 per cent stake from private equity fund General Atlantic for Rs 192 crore. The promoters - husband-wife duo Prannoy and Radhika Roy - have bought the stake (4,836,000 shares) from GA Global Investments, an entity of the PE fund, thus increasing their stake in the company to 61 per cent. Indiabulls Financial Services is believed to have brokered the transaction. The shares have been pledged with Indiabulls, a stock exchange announcement showed.
Following the deal, the promoters have made an open offer to acquire a further 20 per cent stake from the public shareholders at Rs 438.98 a share (which is below the current market price of Rs 462). Acquiring 12,525,446 shares of the company would cost the promoters Rs 550 crore. Morgan Stanley India is managing the open offer.
It's not clear why promoters have chosen to buy back shares. Post-buy back, the foreign holding in the company will come down. Now foreign investors or NRIs can pick up an additional 7.73 per cent in the company, it informed the stock exchanges. The Roys had wanted to gift a 15 per cent of their stake to their daughter Tara Roy, who is an NRI. This proposal was not approved by the RBI since the foreign holding in the company had reached the upper limit. Now the buy-back will allow the Roys the leeway to effect the transaction.
The deal will give General Atlantic almost 2X returns. In September 2005, GA bought 7.95 per cent stake from Shyam Cellular for Rs 116 crore at Rs 240 a share.