Promoters to infuse Rs 2,237 cr via warrants in Zee Entertainment, promoters' stake to rise to 18.39 pc

According to a release, this move will increase the promoter group's stake in the company to 18.39 per cent, subject to shareholders' approval.

The infusion by the promoters is intended to provide significant growth capital, bolster ZEEL's balance sheet, and enable it to capitalise on emerging opportunities in the evolving media and entertainment landscape.

As per the release, the board of directors met twice today to deliberate on the company's strategic direction.

In the first meeting, investment banker JP Morgan presented its assessment of the company's growth roadmap and strategic initiatives. JP Morgan, which was appointed to evaluate ZEEL's long-term strategic alternatives, outlined key steps needed to align the company with its ambitions of becoming a leading content and technology powerhouse.

In the second meeting, the board approved the issuance of up to 16,95,03,400 fully convertible warrants to the promoter group.

"In a second Board meeting held later in the day, the Board of Directors considered the various alternatives discussed by J.P. Morgan and after due deliberations, adopted and approved the enhancement of promoter shareholding by issuance of up to 16,95,03,400 fully convertible warrants to the promoter group entities on a preferential basis, at Rs 132 per warrant. The Promoters of the Company will participate in the fund-raising exercise by investing Rs 22,37,44,48,800 for the Company's next phase of growth, taking the total promoter shareholding to 18.39%. The preferential issue is subject to shareholders' approval," the release stated.

ZEEL's Chairman R Gopalan said the decision reflects the board's confidence in the company's transformation strategy and underlines the promoters' commitment to its success and noted that the fast-changing dynamics of the media industry, combined with shifting consumer preferences, make it essential for the company to remain agile and financially prepared.

"The Board has deliberated upon the various alternatives discussed with J.P. Morgan and has conducted a thorough evaluation of the Company's growth plans. 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. The investment by the promoters, coupled with the strong, ambitious growth initiatives planned by the management team, will ensure that ZEEL remains well-positioned to accelerate its strategic plans to achieve its targeted aspirations," Gopalan stated.

Promoter representative Shubham Shree highlighted that the promoters had expressed their intent to increase their stake as early as May 1, 2025, when the stock was trading at Rs 106.35, and that their continued commitment remains unchanged despite the higher price of Rs 132 per warrant.

Earlier on May 1, the board approved the incorporation of three wholly owned subsidiaries to expand and diversify business operations. On May 8, ZEEL released a detailed investor presentation outlining its future strategy and also decided to engage an investment bank to conduct a formal evaluation.