There is nothing that can stop Adani's bid to acquire NDTV's promoter firm RRPR: Elara Capital

New Delhi: Adani group on Friday rejected NDTV's assertion that Sebi's approval is necessary to acquire interests in RRPR, saying the promoter entity is not a part of the regulator's order that restrained Prannoy and Radhika Roy from accessing the securities market.

Terming the contentions raised by RRPR as "baseless, legally untenable and devoid of merit", VCPL said the holding firm is "bound to immediately perform its obligation and allot the equity shares" as specified in the Warrant Exercise Notice.

Elara Capital’s Karan Taurani told NewsDrum that legally, there is nothing that can stop Adani’s move. 

“This is not a case of acquisition through the purchase of stake. Rather, Adani’s have simply converted the unpaid loan into shares as per the agreement. There is a low likelihood that the merger will be called off, basis the loan convertibility into shares,” said Taurani.

In Friday’s regulatory update, Adani Enterprises Ltd said VCPL has received a reply on behalf of RRPR to the Warrant Exercise Notice dated August 23, 2022.

"RRPR is not a party to the SEBI Order dated 27th November 2020. Consequently, the restraints as pointed out by RRPR in paragraphs 111(b) and 112 of the SEBI Order do not apply to RRPR," Adani Enterprises said in the regulatory update.  The Warrant Exercise Notice was issued by its subsidiary Vishvapradhan Commercial Private Ltd (VCPL) under a contract, which is binding on RRPR, it added.  "RRPR is therefore obligated to comply with its contractual obligations," Adani Enterprises said.

The group also said the performance of obligations by RRPR pursuant to the Warrant Exercise Notice will not result in violation of the Sebi order as "there is no, direct or indirect, dealing in any securities of Prannoy Roy or Radhika Roy" pursuant to the exercise of the warrants by VCPL and allotment of shares by RRPR.

"VCPL, therefore, does not agree with RRPR that prior written approval from SEBI is required for allotment of shares to VCPL on the exercise of warrants," it added.

On Thursday, NDTV had said the approval from market regulator Sebi is "necessary" for VCPL to acquire interests in NDTV's promoter entity RRPR Ltd against an unpaid loan.