Merely hours after a Fitch Group unit, CreditSights, came up with a report that called the Adani Group “deeply overleveraged” and that the group’s “overly ambitious debt-funded growth plans could… spiral into a massive debt trap”, the Adani Group, in an unrelated press release, said it had made a bid to take over NDTV by first indirectly acquiring a 29.18% stake and then by making an open offer for another 26% ownership stake in the media entity.

NDTV is one of India’s most well-known media brands, with its flagship NDTV 24/7 being a pioneer of sorts in the English television news space, its website NDTV.com being among the most read English news websites and some of its current and erstwhile anchors being well recognised public figures. In a survey published in the recent Reuters Institute Digital News Report for 2022 — whose respondents were mainly English-speaking online news users in India — NDTV online polled the highest weekly usage, and while 24-hour TV news channels were perceived by survey respondents as being less-well-trusted compared with print counterparts, NDTV ranked the highest among Indian TV outlets.

It’s ironic that CreditSights’ warning for the Adani Group that a debt trap could leave some of its companies in distress was exactly how a similar situation played out for the media entity after a series of financial transactions made by the promoters of NDTV led the company into the financial doldrums in the late 2000s and early 2010s.

Cluttered space

Television news in India today is a cluttered space with several English news channels — many of whose editors cut their teeth at NDTV — and the model of news business is also much changed from what it was when NDTV pioneered the modernisation of TV news reporting in India. NDTV was launched in 1984 by Radhika and Prannoy Roy first as a production house for news broadcasts that were predominantly made for the monopoly TV network and state-owned Doordarshan before becoming a commercial news network in 1988. Radhika Roy had a career in journalism with stints in the  Indian Express and  India Today before co-founding NDTV, while Prannoy Roy worked as macroeconomist at Delhi School of Economics with a distinct interest in psephology after completing his doctoral degree at the same institute besides being a certified chartered accountant.

NDTV’s best known offering in the late 1980s on Doordarshan was the slickly produced ‘The World This Week’, a news programme that brought reporting and analysis of world events. Soon, NDTV went on to produce special shows related to election coverage and analysis, budget specials and then broadcast a daily news bulletin on DD Metro. These shows were appreciated for bringing a reporter-driven focus and production values of an international standard — with live (or near-live) dispatches from reporters, graphics and the use of file images and videos. This was a strong contrast to the more staid and desk-read out news bulletins brought out by Doordarshan and soon NDTV’s model of news gathering and presentation became popular, transforming television news.

NDTV went on to launch a 24-hour news channel in partnership with Star India in 1998 before branching out on its own as an independent broadcaster in 2003. It followed a strategy of recruiting talent with familial ties to the establishment—bureaucracy, polity, military, etc. Besides being reporter-driven in its news gathering and presentation, the channel also promoted its anchors who gained sufficient mileage and attention, becoming the faces of the news network. Some of these anchors — Rajdeep Sardesai and Arnab Goswami — branched out to new news networks as editors and ‘star’ anchors quickly, others such as Barkha Dutt remained for a few years before moving out while some such as Sreenivasan Jain, Sonia Singh and Vishnu Som continue to ply their work at the channel.

The larger-than-life promotion of anchors as arbiters of news had its own set of consequences: anchors at NDTV, apart from other news organisations, were accused not only of closeness to the establishment but using it to undercut reporting the inner workings of the government-corporate nexus as the later release of the Radia Tapes and its aftermath revealed.

NDTV’s expansion between 2003 and 2008 — with the launch of news channels NDTV India (Hindi news), NDTV Profit (business news) — also came at a time when it no longer held a dominant position in the English and Hindi news space with more channels in the fray and NDTV’s foray into lifestyle and entertainment channels, NDTV Good Times and NDTV Imagine, were attempts to create new brands to fund the news operation. The expansion was helped with investments from banks such as Morgan Stanley. But the financial costs of news operations had also burgeoned significantly for the company that was listed in the stock exchanges in the early 2000s.

The promoters’ decisions to buy back shares came at an inopportune time as the stock market crashed during the global financial crisis in 2008, with NDTV’s stock price also falling. This led to the promoter/founders resorting to a series of transactions that began with their availing a loan of ₹501 crore from Indiabulls in July 2008, taking a loan of ₹375 crore from ICICI Bank to repay Indiabulls in November 2008 and a total of ₹403.85 crore in two tranches (in August 2009 and March 2010) from Vishvapradhan Commercial Pvt. Ltd. (VCPL), an entity indirectly controlled by Mukesh Ambani’s Reliance Industries, to repay ICICI. The VCPL loan agreement led to the promoters transferring a portion of their shares to a holding entity Radhika Roy Prannoy Roy Holding (RRPR) in such a way that RRPR held 29.18% of NDTV and allowed VCPL to acquire 99.9% of the RRPR equity, through the conversion of warrants, in case the loan was unpaid. This decision enabled the “hostile bid” by the Adani Group to seek control over NDTV almost a decade and a half later.

Revenue model

NDTV’s expansion into new forays had begun to hurt its financials and its revenue model — dependent heavily on advertisements — in a crowded TV news market had also begun to provide diminishing yields. A prolonged period of financial decline was reflected in the company’s stock prices and market capitalisation which fell significantly by the mid-2010s.

With a TRP TV ratings model, later shown to be flawed, governing advertisement placements, NDTV no longer remained the favoured destination for commercials. Meanwhile, the Bharatiya Janata Party’s coming to power in 2014 also changed the nature of public discourse favoured by the television channels, besides its focus on news operations as well.

Today, the primetime offerings of the English news channels are limited to studio “discussions” and polarised “debates”. General news reporting barely features in-depth investigation or coverage of issues related to livelihoods or broader, deeper trends of political economy, international affairs or public policy in English news channels as was the case in the 1990s. More noticeably, predominant channels in television news media in India underwent an accelerated “Foxification” — the imitation of the controversial U.S. news channel Fox News.

NDTV did seek to remain as one among a rapidly dwindling number of exceptions to this trend. Financially, years of cost-cutting through a reduction in the size of the workforce and the scale of operations besides a flourishing digital operation allowed it to turn around. In FY 2020-21, NDTV made a revenue of ₹357.63 crore and a profit of ₹74.86 crore, but these numbers are also a reflection of the size of operations of the group, whose heydays were more than a decade ago.

The Adani Group has now bought VCPL from its current owners, Mahendra Nahata (a Reliance group associate) of the HFCL group, reportedly for ₹113.74 crore (much lower than the ₹403.85 crore that was loaned from VCPL to NDTV) and immediately exercised the warrants to acquire the stake in NDTV and issued an open offer to acquire a majority stake.

The Adani Group’s rise as a leading and diverse business entity has coincided with the ascension of former Gujarat Chief Minister and current Prime Minister Narendra Modi and its promoter’s proximity with the current Union government is well known. It has now embarked to seek majority control of what remains one of the few independent TV and digital media groups in the country that is willing to take critical positions on the government of the day, leading to NDTV staring at an uncertain future.