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Informist, Thursday, Jul. 3, 2025

 

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--Zee Ent: Fund raise will help co keep up with peers' mind-boggling work 
--CONTEXT: Comments by Zee Ent mgmt in conference call 
--Zee Ent: Preferred fund raise via warrants as unsure of market response 
--Zee Ent:Punit Goenka missed concall; on urgent, personal unscheduled travel 
--Zee Ent: Seek to cover entire spectrum of content to attract advertisers 
--Zee Ent: Financials are strong, but competition has 10 times more money

 

By Anand JC and Sunil Raghu

 

NEW DELHI/AHMEDABAD – Zee Entertainment Enterprises Ltd. Thursday said it is looking to raise funds via warrants and not a rights issue or qualified institutional placement as it is unsure how the market would respond to those options. "Given the general noise around the company, we cannot deny or shy away from the fact that there has been some noise for right or wrong reasons around our company," an executive told investors in a conference call.

 

Zee Entertainment is looking to raise INR 22.37 billion from promoter group entities by issuing up to 169.5 million fully convertible warrants. The promoters currently hold 3.99% stake in Zee Entertainment. This may go up to 18.4% if the fundraising goes through.

 

The company's Chief Executive Officer Punit Goenka's bid to be appointed Zee Entertainment's managing director did not meet with shareholders' approval last year. According to media reports, proxy advisory firms have asked shareholders this time to vote against the proposal to raise funds, as they feel it could result in Goenka getting greater control of the company despite not being a director. This could also lead to a dilution in the stakes of public shareholders.

While Zee Entertainment Chairman Emeritus Subhash Chandra was present on the call, Goenka was absent. Grilled by investors on his absence during the crucial call three days before investors vote on the fundraising exercise, executives said Goenka had to undertake urgent, unscheduled travel for personal reasons.

 

The company is looking to raise money right now as its new initiatives are capital-intensive, and doing so will help it keep up with competitors whose work is "mind-boggling", an executive said during the "Ask Me Anything" conference call. The company assured investors that its balance sheet remains strong, and said the fundraising would make it stronger. "Looking at the competition... what they have, they have 10 times more money than we have," an executive at the media conglomerate said.

 

Asked by investors about being transparent only before key voting events, the company said it has been more transparent in the past two months, especially with its weekly communication via newsletters. On its business plans, it said it is focused on ensuring Zee5 turns profitable. "You know, a lot of investments have gone through in this business and we don't want to talk about breakeven alone," the company said. In the past five years, the company has invested over INR 60.00 billion in this business.

To further augment the business, the company recently launched multilingual packages. "I think we have found our sweet spot and our sweet spot is language," an executive said. "And we clearly believe that this strategy will help us differentiate ourselves."

 

Zee Entertainment also plans to make a comeback in the sports telecast business. The company had sold its sports channel Ten Sports to Sony Pictures Networks for $385 million in 2017. "However, with a focus on profitability, we will not chase high, you know, high-cost properties only for the purpose of top line," the company said.

 

Currently, the company is not "cricket-ambitious", it said, as it is not a viable business model for Zee Entertainment. "But there are some of the emerging properties in sports where we are going local, we are picking up local sports properties which are very popular in that area and then we are exporting it to other parts of the country," the company's management said.

 

In terms of content, the company said it is looking to cover the entire spectrum of offerings from long-form to short-form to attract advertising opportunities. 

 

For the March quarter, Zee Entertainment had reported a consolidated net profit of INR 1.88 billion on a revenue of INR 21.84 billion. Thursday, its shares closed at INR 143.94 on the National Stock Exchange, up 2.1%.  End

 

Edited by Rajeev Pai

 

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