In a move that has created significant ambiguity, the Securities
and Exchange Board of India ("SEBI") has
recently ruled in the matter concerning NDTV Limited
("NDTV") that acquisition of warrants
and call option rights is sufficient to trigger an open offer under
certain circumstances.1 This decision comes as a major
hindrance for structuring investments into listed companies, and
also adversely impacts various promoter funding avenues.
Background
NDTV is a company incorporated in New Delhi, with its securities
listed on BSE and NSE. In 2008, RRPR Holding Private Limited
("RRPR"), Prannoy Roy and Radhika Roy
(collectively, the "Promoters")
initiated an open offer for purchase of NDTV shares. In order to
fund this open offer, RRPR (on behalf of the Promoters) availed a
loan of Rs. 450 crore from Indiabulls Financial Services Ltd. To
repay this, the Promoters availed a loan Rs. 375 crore from ICICI
Bank.
