Even as credibility and finance are at all-time lows, the TV company has got yet another investor to pick up a big chunk of its equity

Its viewership claims are impossible to believe; its credibility at a nadir; and its finances in a mess. Yet, every few months, the financially beleaguered NDTV India pulls off a coup by getting deep-pocketed ‘strategic’ investors and top-flight private equity investors to abandon their stiff standards and pick up big chunks of its equity. Last week, DE Shaw group, a $20 billion investment and technology development company, picked up a 14.2% stake in NDTV providing an exit to Goldman Sachs, another blue-chip investor, which probably exited at a loss. Consider the trajectory of the NDTV stock. It got listed at Rs100 in 2004; since India was well into a ferocious bull run; the stock rose to Rs511 in January 2008 on the promise of a financial performance which has never materialised. Then came the global financial crash and, while the market has since recovered, the NDTV stock hasn’t stopped falling. It is now at Rs76—down 25% even from the issue price, after seven years of existence—and down a whopping 85% from its peak. This is hardly surprising. NDTV has been making losses ever since it got listed, right up to the recent quarter, when it apparently persuaded a top investor like DE Shaw to buy a stake. Interestingly, despite the DE Shaw acquisition, the stock has barely moved.

This is not the first perplexing investment NDTV has swung. Last month, it sold a 49% stake in NDTV Lifestyle Holding Pvt Ltd, to Malaysia’s Astro All Asia Networks for $40 million. Here, too, Astro All Asia was stepping in after NDTV terminated a previous agreement with Scripps Networks to sell a higher stake.

Interestingly, the DE Shaw investment in NDTV has happened in less than two weeks since it joined hands with Reliance Industries Ltd (RIL) to enter the Indian financial services sector. Now we know that Mukesh Ambani has a soft spot for NDTV’s promoters and anchors and that they had previously approached him for an investment. We will have to wait and see if DE Shaw demands performance or remains a mysteriously passive, undemanding investor, like all others who invested in this company.

(This article first appeared in the edition of Moneylife magazine, dated 5 May 2011 that was available on the newsstands on 21 April 2011.)