Following a cash raising, CLSA maintains a "Hold"
on Zee, but anticipates competition.
18/7/2024,
The shareholders have approved Zee Entertainment's plan to
fund Rs 2,000 crore by placing qualified institutions as buyers and by issuing
equity shares (QIPs).
The price of Zee Entertainment shares has dropped more than
30 per cent in the last year and more than 45 per cent so far this year, making
them underperformers.
Following shareholder approval for Zee Entertainment to
finance Rs 2,000 crore through a variety of channels, including the issuance of
equity shares and qualified institutional placements (QIPs), CLSA has
maintained a "Hold" position on the media firm, with a target price
of Rs 150.
Following a cash raising, CLSA maintains a "Hold"
on Zee, but anticipates competition.
The shareholders have approved Zee Entertainment's plan to
fund Rs 2,000 crore by placing qualified institutions as buyers and by issuing
equity shares (QIPs).
The price of Zee Entertainment shares has dropped more than
30 per cent in the last year and more than 45 per cent so far this year, making
them underperformers.
Following shareholder approval for Zee Entertainment to
finance Rs 2,000 crore through a variety of channels, including the issuance of
equity shares and qualified institutional placements (QIPs), CLSA has
maintained a "Hold" position on the media firm, with a target price
of Rs 150.
Zee's low promoter ownership of only 4% of the company was
another issue raised by the brokerage.
Sign up to receive updates whenever we post new content on
our market blog.
The stock of Zee Entertainment has underperformed this year,
down over 45 per cent thus far, and over 30 per cent the year before.
This decline came after the Sony Group demanded a $90
million break-up fee and withdrew from its merger agreement with Zee, citing
unmet requirements.
Zee has denied going against the agreement, which was first
declared in December 2021. The CEO of ZMCL, Abhay Ojha, left the company in May
after being fired.
After the unsuccessful merger, Zee declared on June 6 that,
subject to the required permits, it would explore raising money by issuing
equity shares or using a private placement, a placement for qualifying
institutions, a preferential issue, or other means.
The media company has now put in place several cost-cutting
initiatives, such as a 15% employment reduction and a leadership
reorganisation, to reduce financial losses and stabilise operations.
Comments
Post a Comment