1 month ago
Zee Media Corporation (ZMCL) share was locked in its upper circuit for a fourth straight day, up 10 per cent at Rs 25.04 on the BSE in Tuesday's intraday trade, on the back of the news that the board has approved fund raising of up to Rs 200 crore by issue of warrants to foreign portfolio investors (FPIs).
The stock of the TV Broadcasting & software production company hit a 29-month high today, and has zoomed 79 per cent in the past one week. Zee Media share is trading at its highest level since April 2022. In the past eight trading days, the market price of Zee Media share has doubled from a level of Rs 12.48 seen on September 19.
Till 10:49 AM, a combined 57.49 million equity shares had changed hands on the NSE and the BSE. There were also pending buy orders for a combined 5.61 million shares on both the exchanges, data shows. In comparison, the BSE Sensex was down 0.18 per cent at 84,150.
On September 24, Zee Media's board approved issue of up to 133.33 million warrants of the company, for cash consideration, at an issue price of Rs 15 per warrant, aggregating to not more than Rs 200 crore, convertible or exchangeable for, 1 fully paid 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 warrants shall be adjusted against the issue price for the resultant equity shares.
The board approved allotment 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 allottees are FPIs entities forming part of the non-promoter / non-promoter group category.
The right attached to warrants may be exercised by the warrant holder, in one or more tranches, at any time on or before the expiry of 18 months from the date of allotment of the warrants. Post conversion of proposed warrants, UNICO Global Opportunities Fund Limited will hold 5.04 per cent stake in Zee Media followed by AL Maha Investment Fund PCC - Onyx Strategy (5.03 per cent) and Ebisu Global Opportunities Fund Limited (4.85 per cent).
ZMCL is one of the leading and largest news networks of India. It has a unique cluster of 19 TV news channels comprising 1 Global, 4 and 11 Regional language channels, together with 3 digital-only channels and multiple digital brands. Zee News is the flagship channel of the company and Zee Business is leading the Hindi business news segment with 60.3 per cent market share.
Zee Media has gradually expanded its basket of digital properties and has presence across various mediums including websites, social media pages and apps. In terms of the audience, it follows the same strategy as the TV segment to focus on a broader market along with products that cater to specific niches. Its digital portfolio includes multiple websites for niche channels which further have a multitude of language versions, sub brands and sections catering to different audiences.
"ZMCL had pulled out of Broadcast Audience Research Council India (BARC) rating system in September 2022 because of issues with the landing page and up-linking and downlinking with the satellites. This affected the advertising revenue generation capacity of ZMCL, which was reflected in declining quarter-on-quarter revenue. However, ZMCL has re-entered the BARC rating system since October 2023, which is expected to improve the operating performance of the company in the coming quarters, as demonstrated in Q4FY24," CARE Ratings said.
Meanwhile, Zee Media's promoter holding has declined significantly since June 30, 2020. As on March 31, 2024, total promoter holding in ZMCL stood at 0.42 per cent (March 31, 2023: 4.34 per cent).
CARE Ratings, on July 9, 2024, had downgraded the long term bank facilities of ZMCL.
"The rating downgrade and change in the outlook on the long-term rating to 'Negative' from 'Stable' reflects the moderation in the operating and financial performances of ZMCL and continued uncertainty on the ability of the company to generate adequate cash flow from operations relative to the sizeable debt repayment obligations in FY25," the rating agency said in rationale.
