Following a cash raising, CLSA maintains a "Hold" on Zed, but anticipates competition.

 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.

 

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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.