Promoters to inject Rs 2,237 crore into Zee as board backs growth plan
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The Board of Directors of Zee Entertainment Enterprises (ZEE) has approved the issuance of up to 16.95 crore fully convertible warrants to promoter group entities on a preferential basis at ₹132 per warrant, raising a total of ₹2 ,237.44 crore. The move is aimed at strengthening the company's financial base and accelerating its strategic ambitions in the content and technology sectors.The preferential allotment, which is subject to shareholder approval, will raise the promoter group's stake to 18.39%. Notably, the issue price exceeds the SEBI-prescribed minimum of ₹128.58 per warrant. 'The Board insisted on a higher price and the promoters agreed to pay ₹3.42 more per warrant,' the company noted.The decision followed two board meetings held earlier in the day. In the first, investment bank J.P. Morgan India Pvt. Ltd. presented a detailed review of ZEE's growth strategy, discussing new initiatives and market sentiment. During the second meeting, the Board considered various strategic options and subsequently approved the promoter group's capital infusion to bolster the company's balance sheet.Commenting on the development, R. Gopalan, Chairman of ZEE, said: 'The Board has deliberated upon the various alternatives discussed with J.P. Morgan and has conducted a thorough evaluation of the company's growth plans. The Board believes that the steps being implemented to enhance the promoter shareholding will ensure their added motivation to work in line with the enhanced business plan.'The media and entertainment sector is evolving rapidly, leading to a shift in consumer preferences across the entertainment landscape. The investment by the promoters, coupled with the strong, ambitious growth initiatives planned by the management team, will ensure that ZEE remains well-positioned to accelerate its strategic plans to achieve its targeted aspirations.'Shubham Shree, speaking on behalf of the promoter group, said the intention to increase their shareholding was conveyed to the Board on 1 May 2025, when ZEE's share price was ₹106.35. 'They are committed to the company and its business even at this higher price,' he stated.Previously, at a Board meeting held on 1 May, ZEE had approved the incorporation of three wholly owned subsidiaries as part of its business diversification strategy. On 8 May, the company also released a detailed investor presentation outlining its approved growth roadmap. At that meeting, the Board recommended appointing an investment banker to further assess the company's future strategy.As part of its transition into a leading content and technology powerhouse, ZEE has undertaken multiple initiatives to enhance its core operations and invest in high-potential emerging segments. The company recently announced a strategic investment in Bullet, a new-age content and tech start-up, to launch a micro-drama app aimed at younger audiences.
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Business Standard
2 hours ago
- Business Standard
Zee to raise over ₹2K cr from preferential issue of convertible warrants
Zee Entertainment Enterprises (ZEEL) will raise over Rs 2,237 crore from the preferential issue of convertible warrants, as its board of directors on Monday approved the promoters increasing their shareholding in the company. These warrants are proposed to be allotted to Altilis Technologies or Sunbright Mauritius Investments, according to the stock exchange filing. The promoters' shareholding in ZEEL will rise to 18.39 per cent from 3.99 per cent. 'In a second board meeting held later in the day, the board of directors considered the various alternatives discussed by JP Morgan and, after due deliberations, adopted and approved the enhancement of promoter shareholding by issuance of up to 16,95,03,400 fully convertible warrants to the promoter group entities on a preferential basis, at Rs 132 per warrant. The promoters of the company will participate in the fundraising exercise by investing Rs 22,37,44,48,800 (Rs 2,237.4 crore) for the company's next phase of growth, taking the total promoter shareholding to 18.39 per cent. The preferential issue is subject to shareholders' approval,' it said in a statement. Before this, the promoter and promoter group, led by Essel Group's Chairman Emeritus of ZEEL, Subhas Chandra, and his family, held 3.99 per cent of the shareholding in the company, according to the Bombay Stock Exchange (BSE). Its shares closed at Rs 138.25, up by 0.68 per cent, on NSE. Shubham Shree, on behalf of the promoter group, was quoted saying, 'The promoters submitted their desire to enhance their shareholding to the board on 1 May when the stock price was at Rs 106.35; however, they are committed to the company and its business even at this higher price.' The Mumbai-based broadcaster also had another meeting with JP Morgan, an investment bank, it stated in its release, where the latter presented an assessment of the company's growth plans and strategic initiatives and also discussed the market perception of the stock and potential alternatives with the board, ZEEL said. R Gopalan, Chairman, ZEEL, said in a statement that the board had deliberated upon the various alternatives discussed with JP Morgan and conducted a thorough evaluation of the company's growth plans. 'The board believes that the steps being implemented to enhance the promoter shareholding will ensure their added motivation to work in line with the enhanced business plan. The investment by the promoters, coupled with the strong, ambitious growth initiatives planned by the management team, will ensure that 'Z' (the new brand logo) remains well-positioned to accelerate its strategic plans to achieve its targeted aspirations,' he added. This comes a month after the company announced its rebranding process and a new phase of growth backed by its focus on content and technology, and its long-term vision around ZEEL's performance and profitability. These steps follow the company implementing several cost-cutting measures in FY25, after Punit Goenka, Chief Executive Officer (CEO), ZEEL, said in the earnings call for the January–March quarter that there is no room for cost-cutting right now for the expansion of its EBITDA margin. In June, the company also announced a strategic equity partnership with content and technology start-up Bullet, where ZEEL is expected to either invest or acquire a stake in the platform, it had stated in the stock exchange filing. Bullet developed India's first micro-drama application focused on fast-paced, creator-driven content through short-duration vertical format episodes targeted towards younger audiences.
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- Business Standard
Zee to raise ₹2,237 crore via promoter warrants, boost stake to 18.4%
Zee Entertainment Enterprise Ltd (ZEEL) on Monday said it plans to raise Rs 2,237.44 crore from promoter group entities, which will lead to an increase in promoter shareholding to 18.4 per cent.. The board of the company at its meeting held on Monday approved to "issue of up to 16.95 crore fully convertible warrants, for consideration to be received in cash" to Altilis Technologies and Sunbright Mauritius Investments, Promoter Group entities, on a preferential basis, said ZEEL. This fresh infusion of funds from promoters will enable the company to further fortify its core business segments and strengthen its financial foundation to explore value-accretive growth opportunities in the evolving Media & Entertainment landscape, it said. "The Promoters of the company will participate in the fund-raising exercise by investing Rs 2,237.44 crore for the company's next phase of growth, taking the total promoter shareholding to 18.39 per cent," said ZEEL. According to the company, the board approved the enhancement of promoter shareholding by the issuance of up to 16,95,03,400 fully convertible warrants to promoter group entities on a preferential basis, at Rs 132 per warrant.. The price as per the prescribed SEBI guidelines comes to Rs 128.58 per warrant, however, the Board insisted on a higher price and the promoters agreed to pay Rs 3.42 per warrant higher than Rs 128.58 per warrant. It further said an upfront payment of Rs 33 is required for warrant subscription, which is 25 per cent of the issue price. The promoter entity can convert into shares within a maximum period of 18 months from the date of allotment of Warrants upon payment of Rs 99 per warrant, which is 75 per cent of the issue price at the time of conversion into equity shares. The promoters currently own 3.99 per cent of ZEEL. As per the plan, ZEEL will issue warrants convertible into fully paid-up equity shares of the company having a face value of Re. 1/- each warrant at a price of Rs 132. The preferential issue is subject to shareholders' approval, ZEEL added. According to the company, this is in line with its strategic ambitions for the future, which is taking necessary steps to identify and invest in new avenues for growth and capitalise on emerging opportunities. ZEEL further said its board had sought an evaluation of its strategic growth plans from US investment banker JP Morgan. After conducting an assessment of ZEEL's strategic alternatives and growth initiatives, J.P. Morgan discussed various alternatives with the Board to strengthen its approach towards its targets, which include augmenting and strengthening the balance sheet of the Company to prepare for any exigencies. "The Board believes that the steps being taken by the Company will enable it to remain well-poised for future investments by further strengthening its balance sheet with access to significant growth capital," it said. ZEEL is convening an Extraordinary General Meeting on July 10, 2025, to seek approval of the members of the Company for the issuance of Warrants on a preferential basis. Commenting on the development, ZEEL Chairman R Gopalan said: "The Board believes that the steps being implemented to enhance the promoter shareholding will ensure their added motivation to work in line with the enhanced business plan. The Media & Entertainment sector is evolving rapidly leading to a change in consumer preferences across the realm of entertainment." For the financial year ended on March 31, 2025, ZEEL's profit was up multi-fold to Rs 679.5 crore. However, its total consolidated income was at Rs 8,417.5 crore, down 4 per cent. Last year, Sony Group cancelled the proposed merger of its India media business, Sony Pictures Networks India, now known as Culver Max Entertainment, and Bangla Entertainment, with ZEEL. The failed merger could have created a USD 10 billion media entity. The merged entity would have been even bigger than JioStar, the joint venture created after the merger of the media business of Reliance and the India business of global media giant Walt Disney. Shares of Zee Entertainment Enterprise Ltd (ZEEL) on Monday settled at Rs 137.95 on BSE, up 0.44 per cent from the previous close. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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