Why are NDTV shares booming? Who is buying? Delisting?

Stock price has gone up from Rs.39 to Rs.66 in just five days

Indian Stock Market is wondering as to what is happening behind the sudden boom in the share price of NDTV last week. On September 4, Monday, the share opened at Rs.39.80 and ended on September 8, Friday at Rs.63.35. In just five days, there was a surge of around 70 percent in the share price of NDTV, which is a wonder, especially as the media company is in all kinds of financial trouble.

Is NDTV expecting support from “big wigs” in the current government to escape from SEBI cases filed by minority shareholders like Sanjay Dutt and get the company delisted?

On Monday, September 4, the NDTV shares opened at Rs. 39.80 and quickly rose to Rs. 47.30, when markets ended for the day. On Tuesday, September 5, the shares closed at Rs. 56.75. In just two days, the shares had jumped 40 percent for no apparent reason. On Wednesday shares reached up to Rs.63 and on Thursday the share reached its week’s highest to Rs.66.65 and closed on Friday at Rs.63.75. What is the reason behind this huge leap of shares when NDTV is suffering its worst financial crisis and has been caught by the Government for several illegalities of money laundering, bank frauds, insider trading allegations?

Experts in the stock trading industry suggest that someone is buying all the shares of NDTV that are available in the stock market. Why would someone buy shares of a company, which is facing inquiries from various government departments? Perhaps this might give you a clue.

About 80% of the shares of NDTV are with Mukesh Ambani’s Reliance Industries Limited linked companies and promoters Prannoy Roy, his wife Radhika Roy and their shell company RRPR Holdings Pvt Limited. The remaining 20 percent are held by around 40,000 small investors which is what is traded on the Stock Exchanges. So who is mopping up these 20 percent shares and for what?

Some say that when the shares in the stock market go below 10 percent, then with the consent of SEBI (Securities Exchange Board of India), the promoters can delist the shares and get off from the stringent SEBI and Stock Exchange Rules and Regulations. Now NDTV is facing several complaints in SEBI from investors for insider trading and stock exchange manipulation. But it may not be as easy as it sounds, to get the shares delisted. Moreover, the Enforcement Directorate is also probing the stock related trading complaints and money laundering aspects. Is NDTV expecting support from “big wigs” in the current government to escape from SEBI cases filed by minority shareholders like Sanjay Dutt and get the company delisted?

As NDTV owes around Rs.600 crores to the Income Tax Department (ITD), the ITD has a lien on NDTV’s assets, as the fine is not paid. Another angle for this huge leap in share prices is that the promoters might be readying the company for sale and wanted to get a good value for their shares and maybe getting it, with the help of some “friendly” market operators.

Whatever be the reason, it is time for SEBI to protect the interest of the 40000 shareholders of NDTV and act on the complaints laying with the Regulators for insider trading and siphoning of money by promoters.