Prannoy plans to gift 9,120,386 shares amounting to 15% stake, to Tara Roy.
Prannoy and Radhika Roy, promoters of New Delhi Television Ltd, plan to divest a part of their holding in the company to their non-resident Indian daughter Tara Roy.
At present Tara Roy holds just 13 shares in NDTV. Prannoy and Radhika Roy now plan to gift 9,120,386 shares in the company to Tara Roy. (The NDTV share, which has a face value of Rs 4, is currently trading at about Rs 187.10.) Once the transfer of shares is completed, Tara Roy’s stake in NDTV will be 15 per cent.
This transfer will bring down Prannoy and Radhika Roy’s holding in the company to 39.78 per cent from the present 54.78 per cent. Phone calls to Prannoy Roy’s office elicited no response. His office said he was in a meeting and would get back later.
According to government sources, NDTV has made a proposal to the Foreign Investment Promotion Board (FIPB) to this effect.
This, according to government sources, is one of the first cases where shares in a company that operates in a sector with stringent foreign investment restrictions are being gifted to an NRI relative.
The FIPB has made an observation that promoters wanting to gift shares to their NRI relatives will have to get a clearance from the government as such a transfer can be categorised as foreign investment, even though it may not result in any funds inflow.
The FIPB is also of the view that this is more critical in sectors that have strict foreign investment conditions in order to ensure that ownership is not transferred to foreign owners.
While considering the case of NDTV, the FIPB said such an equity transfer was possible as long as the foreign equity in the company did not exceed 26 per cent, as stipulated by guidelines governing investments in news channel companies.