Why is Zee Entertainment stock rising despite equity market slump?

Indian equity market-listed media giant Zee Entertainment has big plans for its linear television, digital platforms, movies, and music offerings under the ‘Z’ brand. For this, the company later on Monday announced its plans to raise a staggering ₹2,237.44 crore from its promoters. Shares opened green on this news, as investors took the news positively.

The Zee Entertainment stock—trading as ZEEL on the National Stock Exchange—rose as high as 3.9 per cent to hit a morning high of ₹143.30 apiece.

“In line with its strategic ambitions for the future, ‘Z’ is taking necessary steps to identify and invest in new avenues for growth and capitalize on the emerging opportunities as a leading content and technology powerhouse,” Zee Entertainment said while announcing the capital raising.

The firm’s board on Monday approved a preferential issue of up to 16.95 “fully convertible warrants, for consideration to be received in cash” to promoters Altilis Technologies and Sunbright Mauritius Investments.

The preferential issue, which is subject to shareholder approval, will lead to promoters holding 18.39 per cent of the company’s stake.

”The Promoters of the company will participate in the fund-raising exercise by investing ₹2,237.44 crore for the company’s next phase of growth, taking the total promoter shareholding to 18.39 per cent,” the company said in a statement.

“The Media and Entertainment sector is evolving rapidly, leading to a change in consumer preferences across the realm of entertainment. The investment by the promoters, coupled with the strong, ambitious growth initiatives planned by the management team, will ensure that ‘Z’ remains well-positioned to accelerate its strategic plans to achieve its targeted aspirations,” pitched in Zee Entertainment Chairman R. Gopalan.

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