A major media and entertainment conglomerate known for its television channels and content production faces significant news. Shareholders have decisively rejected a critical proposal, effectively blocking the promoter family’s plan to substantially increase their stake in the company. This unexpected rejection triggered an immediate sharp decline in the company’s stock price.
Zee Entertainment Enterprises Limited’s stock, with a market capitalisation of Rs. 13,270 crores, fell to Rs. 133.10, hitting a low of up to 6.2 percent from its previous closing price of Rs. 141.90. Furthermore, the stock over the past year has given a negative return of 6 percent.
Voting Outcome
The company failed to secure enough votes to issue warrants, blocking the Goenka family’s plan to increase their stake. Only 59.5% of shareholders supported the move, falling short of the 75% approval needed. This would have raised Rs 2,237 crore through warrant issuance to Altilis Technologies and Sunbright Mauritius Investments, both linked to the Goenka family, increasing their stake from 3.99% to 18.39%.
The company had pitched the fundraising as essential for its growth strategy in the competitive media space. Zee highlighted the need for a financial cushion to navigate a fast-changing market and rising competition. However, the setback follows the cancellation of Zee’s planned merger with Sony’s India business, after which the company shifted focus to cutting costs and reinforcing its core operations.
Despite management’s optimism, proxy advisory firms InGovern and Institutional Investor Advisory Services opposed the proposal. They raised concerns over shareholder dilution and questioned the use of warrants as a fundraising tool. The rejection signals shareholder resistance to the promoter family’s attempts to increase their control at the cost of minority investors.
Also read: 20% Upper Circuit: Penny stock skyrockets after partnering with Indonesian airline to launch AeroHub
Company Shareholding
As of March 2025, Zee Entertainment’s shareholding is largely dominated by public investors, who hold 57.18%, while major institutions like HDFC Mutual Fund, Life Insurance Corporation of India, and Norway’s Government Pension Fund Global also hold significant stakes within the broader investor categories.
Promoters own just 3.99%, while foreign institutional investors (FIIs) and domestic institutional investors (DIIs) hold 22.83% and 15.87%, respectively, and the government holds a minor 0.13%. This strong public and institutional ownership has influenced key decisions before; in November 2024, shareholders had already voted against the reappointment of CEO Punit Goenka to the board.
Q4 Financial Highlight
The company reported revenue of Rs. 2,184 crore in Q4FY25, showing a marginal YoY growth of 0.6 percent from Rs. 2,170 crore in Q4FY24 and a QoQ growth of 10.4 percent from Rs. 1,979 crore in Q3FY25. Despite stagnant sales over the past three years, the recent sequential growth indicates improving momentum.
Net profit for Q4FY25 surged to Rs. 188 crore, a sharp 1,346 percent increase from Rs. 13 crore in Q4FY24 and up 14.6 percent from Rs. 164 crore in Q3FY25. However, over a three-year period, profit has contracted at a CAGR of -10 percent, while ROE has grown modestly at a 3 percent CAGR, reflecting challenges in sustaining long-term profitability despite short-term improvements.
Written By Fazal Ul Vahab C H
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
