The board of Zee Entertainment Enterprises has approved issuing fully-convertible warrants worth ₹2,237.4 crore to the promoter group on a preferential basis, “to enhance the company’s financial foundation and implement strategic growth plan in the realm of Content & Technology”, it said in an exchange filing. This will bring the promoter shareholding to 18.39 per cent.
In a meeting, investment bank J P Morgan India presented an assessment of Zee’s growth plans, discussed the market perception of the stock and potential alternative.
The board noted that the enhancement of the financial foundation would be in the best interest of the company, considering various factors including the growth plans and strategic initiatives.
Preferential basis
After considering the alternatives, the board approved the enhancement of promoter shareholding by issuance of upto 16.95 crore fully-convertible warrants to promoter group entities on a preferential basis, at ₹132 per warrant.
The price as per the prescribed SEBI guidelines comes to ₹128.58 per warrant but the board insisted on a higher price and the promoters agreed to pay ₹3.42 per warrant higher than the prescribed norm.
Promoters will participate in the fund-raising exercise by investing ₹2,237.44 crore for Zee’s next phase of growth, it said.
“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. 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,” said Zee in the filing.
Growth push
Commenting on the development, R Gopalan, Chairman, Zee said, “The Media & Entertainment sector is evolving rapidly leading to a change in consumer preferences across the realm of entertainment. The investment by the promoters, coupled with the strong, ambitious growth initiatives planned by the management team, will ensure that ‘Z’ remains well-positioned to accelerate its strategic plans to achieve its targeted aspirations.”
Shubham Shree, on behalf of the promoter group said, “The promoters submitted their desire to enhance their shareholding to the Board on May 1, 2025 when the stock price was at ₹ 106.35, however, they are committed to the Company and its business even at this higher price.”
In the May meeting, the board of directors had approved the incorporation of three wholly owned subsidiaries of the company in order to diversify and expand the current business operations.
Furthermore, on May 8, the company uploaded a detailed investor presentation on its corporate website, highlighting the growth plans of the company as approved by the board.