Zee Entertainment to raise Rs 2,237.44 cr from promoter group entities, issue convertible warrants

New Delhi: Zee Entertainment Enterprise Ltd (ZEEL) on Monday said it plans to raise Rs 2,237.44 crore from promoter group entities, which will lead to an increase in promoter shareholding to 18.4 per cent..

The board of the company at its meeting held on Monday approved to "issue of up to 16.95 crore fully convertible warrants, for consideration to be received in cash" to Altilis Technologies and Sunbright Mauritius Investments, Promoter Group entities, on a preferential basis, said ZEEL.

This fresh infusion of funds from 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, it said.

"The Promoters of the company will participate in the fund-raising exercise by investing Rs 2,237.44 crore for the company's next phase of growth, taking the total promoter shareholding to 18.39 per cent," said ZEEL.

According to the company, the board approved the enhancement of promoter shareholding by the issuance of up to 16,95,03,400 fully convertible warrants to promoter group entities on a preferential basis, at Rs 132 per warrant..

The price as per the prescribed SEBI guidelines comes to Rs 128.58 per warrant, however, the Board insisted on a higher price and the promoters agreed to pay Rs 3.42 per warrant higher than Rs 128.58 per warrant.

It further said an upfront payment of Rs 33 is required for warrant subscription, which is 25 per cent of the issue price. The promoter entity can convert into shares within a maximum period of 18 months from the date of allotment of Warrants upon payment of Rs 99 per warrant, which is 75 per cent of the issue price at the time of conversion into equity shares.

The promoters currently own 3.99 per cent of ZEEL.

As per the plan, ZEEL will issue warrants convertible into fully paid-up equity shares of the company having a face value of Re. 1/- each warrant at a price of Rs 132.

The preferential issue is subject to shareholders' approval, ZEEL added.

According to the company, this is in line with its strategic ambitions for the future, which is taking necessary steps to identify and invest in new avenues for growth and capitalise on emerging opportunities.

ZEEL further said its board had sought an evaluation of its strategic growth plans from US investment banker JP Morgan.

After conducting an assessment of ZEEL's strategic alternatives and growth initiatives, J.P. Morgan discussed various alternatives with the Board to strengthen its approach towards its targets, which include augmenting and strengthening the balance sheet of the Company to prepare for any exigencies.

"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," it said.

ZEEL is convening an Extraordinary General Meeting on July 10, 2025, to seek approval of the members of the Company for the issuance of Warrants on a preferential basis.

Commenting on the development, ZEEL Chairman R Gopalan said: "The Board believes that the steps being implemented to enhance the promoter shareholding will ensure their added motivation to work in line with the enhanced business plan. The Media & Entertainment sector is evolving rapidly leading to a change in consumer preferences across the realm of entertainment." For the financial year ended on March 31, 2025, ZEEL’s profit was up multi-fold to Rs 679.5 crore. However, its total consolidated income was at Rs 8,417.5 crore, down 4 per cent.

Last year, Sony Group cancelled the proposed merger of its India media business, Sony Pictures Networks India, now known as Culver Max Entertainment, and Bangla Entertainment, with ZEEL.

The failed merger could have created a $10 billion media entity. The merged entity would have been even bigger than JioStar, the joint venture created after the merger of the media business of Reliance and the India business of global media giant Walt Disney.

Shares of Zee Entertainment Enterprise Ltd (ZEEL) on Monday settled at Rs 137.95 on BSE, up 0.44 per cent from the previous close.