Zee Media Corporation Limited (ZMCL) shares are experiencing a remarkable surge, hitting an upper circuit for the fourth consecutive day. In Tuesday's intraday trading, the stock rose by 10 percent to ₹25.04 on the Bombay Stock Exchange (BSE).
This surge followed the announcement of a board-approved fundraising initiative of up to ₹200 crores through the issuance of warrants to foreign portfolio investors (FPIs). This positive momentum highlights the growing interest in share market investment related to ZMCL.
Strong performance and market reactions
The stock has reached a 29-month high, having gained 79 per cent over the past week alone. As of today, it is trading at its highest point since April 2022. Remarkably, the share price has doubled from ₹12.48 recorded on September 19, showcasing the significant investor interest in the company.
By 10:49 AM, approximately 57.49 million equity shares had traded on both the National Stock Exchange (NSE) and BSE, with pending buy orders for an additional 5.61 million shares. In contrast, the BSE Sensex reported a decline of 0.18 per cent, landing at 84,150.
Fundraising details and impact
On September 24, ZMCL's board sanctioned the issuance of up to 133.33 million warrants at an issue price of ₹15 each, targeting a total fundraising of ₹200 crore. Each warrant is convertible into one fully paid equity share at the same price.
The warrants will be allotted to three FPI entities—UNICO Global Opportunities Fund, AL Maha Investment Fund PCC, and Ebisu Global Opportunities Fund—which are classified as non-promoter stakeholders.
The right to exercise the warrants can be claimed in tranches at any time within 18 months of allocation. Following conversion, UNICO Global Opportunities Fund Limited will hold a 5.04 percent stake in Zee Media, while AL Maha and Ebisu will hold 5.03 percent and 4.85 percent, respectively.
Company profile and digital expansion
ZMCL is among India's leading news networks. It comprises 19 TV channels, including global, national, and regional broadcasts, alongside three digital-only channels. Zee News, its flagship channel, is complemented by Zee Business, which leads in the Hindi business news segment with a 60.3 percent market share.
The company has also broadened its digital presence, with various websites and social media platforms catering to diverse audiences. It has launched niche channels in multiple languages, expanding its reach and enhancing audience engagement.
Recent challenges and recovery
In September 2022, ZMCL exited the Broadcast Audience Research Council (BARC) rating system, which negatively impacted its advertising revenue. However, the company re-entered the BARC system in October 2023, suggesting a potential recovery in operational performance in upcoming quarters.
Despite these challenges, promoter holdings plummeted from 4.34 percent on March 31, 2023, to just 0.42 percent by March 31, 2024. Additionally, CARE Ratings downgraded ZMCL’s long-term bank facilities on July 9, 2024, citing concerns over its operational and financial performance amid substantial debt obligations for FY25.
Key takeaways
Investors are keenly observing Zee Media Corporation’s movements, especially in light of its fundraising efforts and potential recovery in the share market investment landscape.
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