Following the termination of its $10 billion mega merger with Sony earlier this year, Zee Entertainment Enterprises Limited (ZEEL) announced on June 6 that its board has granted in-principle approval to raise up to Rs 2,000 crore through the issuance of shares or eligible securities.
After the fundraising approval, Zee’s shares rose by 5 percent to Rs 153.75 apiece on the BSE on June 6, marking a 12.5 percent gain over the past month. Zee had previously stated that it would consider fundraising through the issuance of equity shares and/or via private placement, qualified institutions placement, preferential issue, or other methods, subject to necessary approvals.
Since the merger with Sony was scrapped in January, Zee has implemented various measures to cut costs and reduce losses, including a 15 percent reduction in its workforce and a reorganization of its leadership structure.
In the recent fourth quarter, Zee reported a profit of Rs 13.35 crore, compared to a loss in the same period last year. This turnaround was driven by strong advertising demand and reduced expenses. Domestic advertising revenue for the quarter increased nearly 11 percent year-on-year, boosted by the ongoing recovery in the macro advertising environment and increased spending by FMCG (fast-moving consumer goods) clients.
The stock surged as much as 7.69% to Rs 157.55 apiece before paring gains to trade 3.69% higher at Rs 151.70 apiece as of 2:49 p.m., compared to a 0.53% advance in the NSE Nifty 50.
Over the past 12 months, the stock has risen by 23.31%. The total traded volume for the day so far is 1.9 times its 30-day average. The relative strength index (RSI) stands at 55. According to analytical data, out of 21 analysts tracking the company, seven maintain a ‘buy’ rating, six recommend a ‘hold,’ and eight suggest ‘sell.’ The average 12-month consensus price target indicates a downside of 22.6%.
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