Shares of Zee Entertainment Enterprises Ltd (ZEEL) saw a positive start on the bourses on Tuesday, June 17, as the promoters plan to hike their stake in the firm to 18.39 percent, up from 4.28 percent.
ZEEL's board of directors approved the issue of nearly 17 crore fully convertible warrants for a total cash consideration of around Rs 2,237 crore. The price per warrant is Rs 132, indicating a discount of 4.5 percent from the stock's closing price on June 16.
The promoters of the company earlier in March this year had bought nearly 27 lakh shares of the company from the open market worth nearly Rs 27 crore, taking their total stake to 4.28 percent from 3.99 percent earlier.
At 9.20 am, shares of ZEEL were quoting Rs 141.25 per share, higher by 2.4 percent on the NSE.
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The preferential issue is subject to shareholders' approval, for which an extra ordinary general meeting will be convened on July 10, 2025, the company announced in an exchange filing.
In line with its strategic ambitions for the future, Zee is taking necessary steps to identify and invest in new avenues for growth and capitalize on the emerging opportunities, the broadcaster added.
"Under the guidance of the Board, the Company had sought an evaluation of its strategic growth plans. 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."
The firm added, "Additionally, the infusion of funds from the 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."
Domestic brokerage Motilal Oswal said, "While the intended use of funds has not been disclosed yet, capital allocation will remain a key monitorable. At the outset, we view the promoters’ move to raise their stake in the company as a positive development. Our earnings remain unchanged as we await further clarity on usage of funds."
The brokerage decided to maintain its 'neutral' tag on the firm, but hiked its target price to Rs 150 per share, up from Rs 125 earlier.
Kotak Institutional Equities also noted that it awaits further clarity on the usage of the growth capital, while also waiting for a broad-based recovery in the television advertising environment. Kotak kept its 'reduce' call intact, with a price target of Rs 127 apiece.
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