After founders Prannoy Roy and Radhika Roy announced they will sell the Adani Group their 27.26% ownership in the Indian news organization New Delhi Television Ltd (NDTV.NS), the company’s shares increased by more than 4% on Monday.
Following the agreement, the billionaire Gautam Adani-led Indian company will hold 64.71% of NDTV, with the founders keeping a combined 5%.
According to N. Chandramouli, CEO of TRA Research, investors may be interested in NDTV’s shares in the belief that its financial situation will improve.
The broadcaster generated earnings between 900 million rupees ($10.88 million) and 1.20 billion rupees over the previous four quarters. The revenue range for rival TV18 Broadcast Ltd (TVEB.NS) is between 12.7 billion and 15.7 billion rupees.
“NDTV has been extremely selective in the sponsors they accept. They don’t use Broadcast Audience Research Council (BARC) statistics, according to Chandramouli, who also noted that under the new administration, the channel might be more accessible to other advertisers.
BARC’s television audience viewership data is a crucial indicator used by the majority of Indian news stations to generate advertising.
In India, news networks rely heavily on advertising for funding.
In the September quarter, NDTV and TV18 both reported declining advertising sales.
In its September-quarter results update, NDTV had stated, “The management is aware that advertising in the news genre is declining this year and business plans are being managed accordingly to prevent any risks.”
TV18 added that the primary reason for its second-quarter revenue decline over the prior year was “de-growth in advertising income.”
Sanjay Pugalia, the head of Adani’s media division AMG Media Network, and Senthil Chengalvarayan were also named non-executive non-independent directors by NDTV on Friday.
Shares of NDTV were recently trading up by 2.4% at 348.70 rupees, which was less than the price of 368.43 rupees a share at which the Roys had previously sold their interest.
$1 is equal to 82.7480 Indian rupees.
