Zee Entertainment Enterprises Ltd., incorporated in the year 1982, is a Large Cap company (having a market cap of Rs 33349.11 Crore) operating in Media & Entertainment sector.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 1808.56 Crore, down -8.86 % from last quarter Total Income of Rs 1984.39 Crore and up 35.13 % from last year same quarter Total Income of Rs 1338.41 Crore. Company reported net profit after tax of Rs 208.77 Crore in latest quarter.
Investment Rationale
Zee Entertainment Enterprises (ZEEL) and Sony Pictures India (Sony) have entered into a non-binding agreement to merge their operations in India with post-merger stake of 47% for existing ZEEL shareholders and 53% for Sony; it would also include Sony infusing cash of US$1.575bn. ZEEL MD&CEO Punit Goenka will retain the same position in the merged entity and ZEEL will retain one Board seat in it with majority of the Board members to be nominated by Sony. However, the EGM called by Invesco, ZEEL largest shareholder, to remove Mr. Goenka from the Board remains a risk for the deal. Sony has also agreed to transfer certain stake to ZEEL promoters to maintain their stake at 4% as non-compete fees, and ZEEL promoters will have the option to increase their stake up to 20%. ZEEL has not disclosed much on merger cost synergies, but we do anticipate material savings. Key to watch would be the upcoming EGM, and filing of a binding agreement for the merger. The brokerage havs updated model to factor ZEEL’s FY21 annual report.
Promoter/FII Holdings
Promoters held 4 per cent stake in the company as of June 30, 2021, while FIIs held 57.8 per cent, DIIs 18.1 per cent and public and others 20.1 per cent.
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