Zee shares jump on board's nod to infuse ₹2,237 crore via promoter warrants

Business Standard

5 hours ago

Shares of Zee Entertainment Enterprise rose over 3 per cent on Tuesday after it approved raising over ₹2,237 crore from the preferential issue of convertible warrants.
The Mumbai-based broadcaster's stock rose as much as 3.51 per cent during the day to ₹142.7 per share, the steepest advance since June 12 this year. The stock pared gains to trade 1.52 per cent higher at ₹140 apiece, compared to a 0.35 per cent decline in Nifty 50 as of 10:10 AM.
The stock currently trades at the highest level since December 11 last year and has surged over 57 per cent from its March lows. The counter has risen 15.4 per cent this year, compared to a 5.2 per cent fall in the benchmark Nifty 50. Zee Entertainment Enterprises has a total market capitalisation of ₹13,447.27 crore.
Zee to raise over ₹2K crore from preferential issue
The company will raise over ₹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 the firm will rise to 18.39 per cent from 3.99 per cent.
Before this, the promoter and promoter group, led by Essel Group's Chairman Emeritus, Subhas Chandra, and his family, held 3.99 per cent of the shareholding in the company, according to the Bombay Stock Exchange (BSE).
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, it said in an exchange filing.
Kotak Securities on Zee fundraise
According to Zee, the capital raise aims to strengthen the core business and potentially fund value-accretive growth opportunities, and increase promoter stake and accountability, Kotak Securities said in a note.
"We have raised our target multiple to 13x (from 12x earlier) and our fair value to ₹127 (from ₹115), but maintain a 'Reduce' rating as we await clarity on the end-use of the growth capital, and a broad-based recovery in the linear TV advertising environment."
Zee Q4 results
The company reported a 14-fold increase in its consolidated net profit to ₹188.4 crore for the January–March quarter (Q4FY25) compared to the same period last year.
The revenue from operations rose marginally by 0.7 per cent year-on-year (Y-o-Y) to Rs 2,184.1 crore in Q4FY25. The modest growth was largely due to a sharp 24.56 per cent decline in advertising revenue, which fell to ₹837.5 crore.
Zee's failed merger with Sony
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 $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.