Zee Entertainment shares rise 3% as promoters to infuse funds

Shares of Zee Entertainment Enterprises rose over 3% in news today following the board's approval of a significant infusion of capital by its promoters. The company announced the issue of 16.95 crore fully convertible warrants, valued at approximately Rs 2,237 crore. Each warrant is priced at Rs 132, presenting a 4.5% discount to the previous day's closing price.

Zee Entertainment shares gained 3.58 per cent to Rs 142.90 against the previous close of Rs 137.95 on BSE. Total 4.86 lakh shares of the firm changed hands amounting to a turnover of Rs 6.89 crore. Market cap of Zee Entertainment rose to Rs 13,552 crore.

The stock hit a 52-week high of Rs 165.10 on June 18, 2024 and a 52-week low of Rs 89.29 on March 4, 2025 on BSE.

This move will see the allotment directed towards two promoter group entities: Altilis Technologies Private Limited and Sunbright Mauritius Investments Limited. The key objective of this allotment is to strengthen Zee's balance sheet and enhance the promoter stake from 4.28% to 18.39%.

In recent meetings, Zee's board reviewed strategic alternatives, with insights presented by JPMorgan India concerning growth initiatives. This capital raise aligns with Zee's ambition to evolve into a Content and Technology Powerhouse. The funds are intended not only to fortify the core business but also to explore value-accretive opportunities. As stated by Zee, the raise serves a dual purpose: fortifying the core business and potentially funding value-accretive growth opportunities, while enhancing promoter stake and accountability. Despite these developments, Kotak Institutional Equities maintains a 'Reduce' rating for Zee, with a price target of Rs 127, citing the need for clarity on the utilisation of growth capital and a recovery in the linear TV ad environment. The brokerage firm has raised its target multiple to 13x from the previous 12x, reflecting expectations of enhanced financial stability.

Previously, in July 2024, Zee had approved a Rs 2,000 crore fundraising plan via foreign currency convertible bonds, of which only Rs 200 crore had been utilised as of March 2025. The company's current cash and cash equivalents stand at Rs 2,406 crore. This strategic move is indicative of Zee's commitment to investing in new growth avenues and capitalising on emerging opportunities, as highlighted in their recent announcements. The infusion is seen as a step towards achieving greater financial resilience and positioning Zee to seize future growth prospects effectively. Furthermore, Zee's focus on transforming into a Content and Technology Powerhouse underscores its strategic foresight and readiness to adapt to market changes, ensuring sustainable growth in the long term.