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The proposed fund raise could support Zee Entertainment Enterprises Ltd’s stated ambitions in content and technology expansion | Photo Credit: Andrii Yalanskyi
Proxy advisory firm InGovern Research has recommended shareholders to vote against the proposed fund raise of Zee Entertainment Enterprises Ltd via issuance of fully convertible warrants to the promoter group entities on preferential basis.
Earlier this month, the company’s board cleared the issuance of up to 16.95 crore fully convertible warrants at ₹132 per warrant on a preferential basis for a fundraise of ₹2,237.44 crore. This move, subject to shareholder approval, will raise the promoter group’s stake in the company to 18.39 per cent. The company’s EGM is scheduled for July 10.
“Given the excessive dilution from the proposed warrants issue and the recent challenges faced by Zee Entertainment Enterprises Ltd, the above increase in promoter holding through issue of warrants may not be in the best interest of the minority shareholders. We recommend shareholders vote “Against” the resolution,” InGovern Research noted in its voting recommendation report.
“The proposed fund raise could support Zee Entertainment Enterprises Ltd’s stated ambitions in content and technology expansion. However, we believe that the Board should address several important concerns to ensure that shareholder interests are fully protected and value creation is maximised,” it added.
The firm has said that shareholders must seek enhanced disclosures from the company’s Board. It has recommended seeking a detailed breakdown of the fund raise including project-wise allocation and expected return on investment metrics and clear articulation of how it will drive long-term shareholder value. It has also asked shareholders to seek disclosures on whether alternative capital-raising options (such as QIP or rights issue) were evaluated and the rationale for preferring the current route. InGovern has also recommended shareholders to ask the broadcaster if the proposal “received a thorough review by the Audit Committee consisting of only Independent Directors.”
Meanwhile, another proxy advisory firm, Institutional Investor Advisory Services has also recommended shareholders to vote against the broadcaster’s proposal as per its site.
In a statement released on June 16, Zee Entertainment said it that “it is taking necessary steps to identify and invest in new avenues for growth and capitalise on the emerging opportunities as a leading content & technology powerhouse.”
Published on June 29, 2025
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