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Zee Media Corporation (ZMCL) stock was locked in its upper circuit for a fourth consecutive day, up 10 per cent at Rs 25.04 on the BSE in intraday trade on Tuesday, following the announcement that the board has approved fundraising of up to Rs 200 crore through issue of warrants. to foreign portfolio investors (FPI).
Shares of the television broadcasting and software production company hit a 29-month high today and have soared 79 percent over the past week. Zee Media stock is trading at its highest level since April 2022. Over the last eight trading days, the Zee Media stock price has doubled from a level of Rs 12.48 seen on September 19.
Till 10:49 am, a total of 57.49 million shares had changed hands on the NSE and BSE. There were also pending buy orders for a total of 5.61 million shares on the two exchanges, the data showed. In comparison, the BSE Sensex was down 0.18 percent at 84,150.
On September 24, the board of directors of Zee Media approved the issue of up to 133.33 million warrants of the company, for cash consideration, at an issue price of Rs 15 per good, totaling not more than Rs 200 crore, convertible or exchangeable for 1 fully paid up. equity share of the face value of Re 1 each of the company at a price of Rs 15 per equity share for each warrant. The amount paid against the warrants will be adjusted in relation to the issue price of the resulting capital shares.
The Board of Directors approved the grant of warrants to UNICO Global Opportunities Fund Limited, AL Maha Investment Fund PCC – Onyx Strategy and Ebisu Global Opportunities Fund Limited. The company said all beneficiaries are REIT entities falling under the non-promoter/non-promoter group category.
The right attached to the vouchers may be exercised by the holder of the vouchers, in one or more installments, at any time no later than the expiration of a period of 18 months from the date of allocation of the vouchers. After conversion of the proposed warrants, UNICO Global Opportunities Fund Limited will hold 5.04 percent stake in Zee Media, followed by AL Maha Investment Fund PCC – Onyx Strategy (5.03 percent) and Ebisu Global Opportunities Fund Limited (4.85 percent).
ZMCL is one of the leading and largest news networks in India. It has a unique group of 19 television news channels comprising 1 global channel, 4 national channels and 11 regional channels, as well as 3 digital-only channels and several digital brands. Zee News is the company’s flagship channel and Zee Business is the leader in the Hindi business news segment with 60.3 per cent market share.
Zee Media has gradually expanded its basket of digital properties and is present across various mediums including websites, social media pages and apps. In terms of audience, it follows the same strategy as the TV segment: focusing on a broader market as well as products aimed at specific niches. Its digital portfolio includes several websites for niche channels which additionally have a multitude of language versions, sub-brands and sections catering to different audiences.
“ZMCL withdrew from the Broadcast Audience Research Council India (BARC) rating system in September 2022 due to issues related to the landing page and satellite uplinks and downlinks. This affected the capacity to generate ZMCL’s advertising revenue, which was reflected in quarter-on-quarter revenue decline However, ZMCL has re-entered the BARC rating system since October 2023, which is expected to improve the company’s operational performance in the year. over the coming quarters, as demonstrated in Q4 FY24,” CARE Ratings said.
At the same time, Zee Media’s promoter stake has declined significantly since June 30, 2020. As of March 31, 2024, the total promoter stake in ZMCL stood at 0.42 percent (March 31, 2023: 4.34 percent).
CARE Ratings, on July 9, 2024, had downgraded ZMCL’s long-term banking facilities.
“The rating downgrade and change in the long-term rating outlook from ‘Negative’ to ‘Stable’ reflect the moderation in ZMCL’s operational and financial performance and continued uncertainty over the company’s ability to generate adequate operating cash flows relative to significant debt repayment obligations in FY25,” the rating agency explained in its rationale.
First publication: October 1, 2024 | 11:44 a.m. STI