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Zee Entertainment

Media & Entertainment Stocks Surge; Saregama, Tips Films Rally Up to 20%

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Shares of media and entertainment (M&E) companies surged in Wednesday’s intraday trade, with several stocks rallying up to 20%. Companies such as Saregama India, Tips Films, Mukta Arts, Pritish Nandy Communications, and Zee Entertainment Enterprises saw significant gains, supported by strong volumes in an otherwise range-bound market. Among the top performers, Saregama India hit a record high of Rs 622 per share, marking a 17% rally. The stock has soared 80% since April 2024, reflecting strong investor confidence in its evolving business model, which focuses on digital monetization through over-the-top (OTT) platforms and licensing income. Analysts expect the company’s profitability to remain robust due to increasing digital content consumption. Tips Films also hit the upper circuit, gaining 20% and closing at Rs 658. The company, known for producing and distributing films and web series, has projected an ambitious growth path. In its FY24 annual report, Tips Films emphasized its plan to produce 5 to 6 films per year, signaling strong prospects for content demand. Subhash Ghai’s Mukta Arts also saw a 20% rally, reaching Rs 97.09 after the company announced a new agreement with Zee Entertainment Enterprises for the satellite and media rights of 37 films, effective from 2027. Although the transaction value was not disclosed, the deal was reportedly 25% more lucrative than previous agreements. The media sector, as a whole, is experiencing strong growth, with the Indian M&E industry projected to reach Rs 23,800 crore by 2026. Analysts point to growing demand for Hindi films and digital content, alongside expanding revenue from tier-II and III cities and international markets. Shares of Pritish Nandy Communications also hit a 52-week high, locked at a 20% upper circuit at Rs 79.16, driven by the company’s successful ventures in film and digital series production. As per the FICCI-E&Y Report, the M&E sector is expected to grow by 10% annually, reaching Rs 3.08 trillion by 2026, with digital media leading the charge in content consumption. Source: Business Standard

Zee Entertainment Shareholders Approve Plan to Raise ₹2,000 Crore

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Zee Entertainment Enterprises Ltd. (ZEEL) shareholders have approved a plan to raise ₹2,000 crore through various financial routes, including equity shares and qualified institutions placements (QIPs). The special resolution, which allows the company to issue securities for an amount not exceeding ₹2,000 crore, was passed with 78.83% of the total votes, according to a scrutinizer’s report filed by Zee. The remote e-voting process for the special resolution began on Sunday and concluded on Monday, July 15, 2024, at 5 pm. ZEEL plans to raise the funds in one or more tranches through methods such as private placements, qualified institutional placements, preferential issues, or a combination of these options. While the company has not yet disclosed specific plans for the raised amount, industry experts expect it will be partially allocated toward business expansion. This fundraising comes after the termination of a merger agreement between Sony Corporation and ZEEL to combine their entertainment businesses in India. Following the deal’s termination, ZEEL announced a strategic realignment of its revenue verticals under the direct guidance of its MD and CEO. Karan Taurani, SVP at Elara Capital, commented on the development, stating, “This move could improve investor confidence, depending on the quality of the investors involved.” He added, however, that further clarity is needed on the fund’s potential utilization and the exact method through which it will be raised. Source: Business Standard

Makers of Kangana Ranaut’s ‘Emergency’ Approach Bombay High Court Seeking Film Release

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The makers of Kangana Ranaut’s film Emergency have approached the Bombay High Court, seeking its release and a censor certificate. Co-produced by Zee Entertainment Enterprises, the petition was filed on Wednesday, accusing the Central Board of Film Certification (CBFC) of arbitrarily withholding the censor certificate. According to the plea, the CBFC is allegedly ready with the certificate but has refrained from issuing it. The plea was mentioned before a division bench of Justices B.P. Colabawalla and Firdosh Pooniwalla, who agreed to hear the case later in the day. Originally slated for release on September 6, the film’s launch was postponed indefinitely following objections from Sikh organizations, including the Shiromani Akali Dal. The groups accused the movie of misrepresenting the community and distorting historical facts, sparking controversy around its content. Directed and co-produced by Kangana Ranaut, who also plays the lead role of former Prime Minister Indira Gandhi, the biographical drama has faced significant backlash. Ranaut, a BJP MP from Mandi, Himachal Pradesh, expressed disappointment over the delay, accusing authorities of imposing an “Emergency” on her movie. Reacting to the postponement, Ranaut stated, “It’s a very hopeless state. I’m quite disappointed by our country and the circumstances.” She argued that the events depicted in her film are not new, referencing other films like Madhur Bhandarkar’s Indu Sarkar and Meghna Gulzar’s Sam Bahadur, which portrayed similar historical episodes. Determined to release her film uncut, Ranaut vowed to fight the legal battle, stating, “I’ve made this film with a lot of self-respect, which is why the CBFC can’t point out any contention… I’ll fight in court and release an uncut version.” Source: Hindustan Times

Zee Entertainment Gains 7% as Board to Consider Fund Raising on July 16

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Shares of Zee Entertainment Enterprises Limited (ZEEL) surged by 7% to Rs 157.20 per share on the National Stock Exchange (NSE) during Friday’s intra-day trade, driven by heavy volumes. This uptick followed the company’s announcement that its board will convene on July 16 to deliberate on a fund-raising plan. In an exchange filing, ZEEL stated, “A meeting of the board of directors of the company is scheduled to be held on Tuesday, July 16, 2024, inter alia, to consider and approve the raising of funds through the issuance of appropriate instruments along with the terms and conditions of the appropriate instruments, subject to such regulatory/statutory approvals as may be required.” Last month, the board had given its in-principle approval for raising up to Rs 2,000 crore through the issue of securities via various modes, including private placement, qualified institutions placement (QIP), preferential issue, or other methods. By 11:15 AM, ZEEL emerged as the top gainer among the Nifty Midcap 100 index, rising by 6.2% to Rs 156.30. In contrast, the Nifty 50 and Nifty Midcap 100 index saw gains of 0.89% and 0.38%, respectively. A combined 26.16 million shares were traded on the NSE and BSE. Despite this recent surge, ZEEL has underperformed the market in 2024, declining by 45%, compared to a nearly 13% rally in the Nifty 50. The stock hit a 52-week low of Rs 125.50 on June 4, 2024. In its Q4FY24 earnings update, ZEEL mentioned significant ongoing efforts to implement margin improvement interventions across its business. The company anticipates that these efforts will enhance performance, with major costs incurred in Q1FY25 for implementing these interventions. This is expected to impact margins temporarily, with gradual improvement anticipated from Q2FY25. The company aims for industry-leading EBITDA margins of 18-20% by FY26. Emkay Global Financial Services noted that ZEEL’s Q1FY25 performance might be affected by a shift in advertisement spends, projecting marginal growth of 2% year-on-year for Q1 ad revenues. Subscription revenues are expected to grow steadily due to price hikes, while other sales and services should benefit from movie releases and syndication deals. ZEEL’s profitability may be impacted by one-time interventions as it strives to reach its medium-term targets.

Zee Entertainment Bears Rs 432 Crore Merger Costs Amid Failed Sony Deal

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Zee Entertainment Enterprises Ltd. faced significant financial setbacks amounting to Rs 432 crore due to its failed merger deal with Sony Group Corporation’s Indian media unit, Culver Max Entertainment. The merger agreement was terminated on January 22, sparking a series of financial implications for Zee Entertainment. Key Points: Merger Costs: Zee Entertainment incurred merger-related costs of Rs 432 crore during the financial years 2023-24 and 2022-23. These costs were attributed to the failed merger deal with Sony’s India unit. Impairment Charges: As part of portfolio rationalization and meeting merger conditions, Zee Entertainment incurred impairment charges of Rs 331 crore in 2022-23. This was due to the closure of certain businesses, including Margo Networks. Employee Termination Costs: Zee Entertainment recorded an employee termination cost of Rs 22 crore in a recent restructuring, which included a 15% reduction in its workforce as part of cost-cutting measures. Arbitration Cases: Zee Entertainment faces arbitration cases filed by Culver Max Entertainment and Star India. Culver Max is seeking $90 million in termination fees, while Star India is seeking directions regarding the implementation of the International Cricket Council TV rights agreement. Merger Plan Timeline: The $10-billion merger proposal between Zee Entertainment and Sony Group Corp. witnessed key events such as board approvals, termination of the merger plan by Sony in January 2024, and subsequent legal actions by Zee Entertainment against Sony Pictures Networks India. Reasons for Termination: Sony terminated the merger plans citing unsatisfied closing conditions after two years of negotiations. Disagreements over financial terms, cash availability, and leadership appointments, particularly regarding Punit Goenka, contributed to the termination. Financial Performance: Despite the challenges, Zee Entertainment reported a consolidated net profit of Rs 13.35 crore in the March quarter, marking a recovery compared to the previous fiscal period.  

ZEE Entertainment Withdraws Merger Application with Sony Pictures Networks

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ZEE Entertainment Enterprises Ltd. (ZEE) has opted to retract its merger application submitted to the National Company Law Tribunal (NCLT) in Mumbai, which sought the execution of its proposed merger with Sony Pictures Networks, now known as Culver Max. The merger agreement between Sony and Zee was initially disclosed on December 22, 2021. However, Sony Pictures later rescinded the merger proposal. Subsequently, Sony approached the Singapore International Arbitration Centre (SIAC) on February 4, seeking directives to prevent Zee from pursuing legal remedies in alternate legal forums, including the NCLT. Following SIAC’s dismissal of Sony’s request for urgent relief, Mad Men Film Ventures, a Zee shareholder, approached the NCLT urgently, seeking an order to ensure that any rulings issued by other forums concerning the Zee-Sony merger would be subject to the NCLT’s directives. In response, Zee approached NCLT Mumbai, seeking enforcement of the $10 billion merger scheme, previously sanctioned by the tribunal in August 2023, despite opposition from creditors such as Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship. However, ZEE has now chosen to withdraw its application. In a disclosure to the Bombay Stock Exchange, the company elucidated its decision to retract the application filed on January 24 of this year. “This decision will also enable the Company to pursue growth and evaluate strategic opportunities to generate higher value for all shareholders….This decision to withdraw the implementation application will enable the Company to continue to aggressively pursue all its claims against Sony in the ongoing arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and in other forums,” the filing stated.  

Zee Entertainment Launches 18 South Asian Channels on YouTube TV for Diverse US Audience

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Zee Entertainment has made a significant move in the digital space by launching 18 South Asian channels on YouTube TV, catering to the diverse audience in the United States. This collaboration aims to meet the evolving content preferences of the expanding South Asian population in the US. The ‘Zee Family’ package offers a selection of 18 premium channels on the YouTube TV platform, dedicated to captivating the diverse and vibrant South Asian community across the United States. This partnership between Asia TV USA and YouTube TV marks a milestone in catering to the diverse needs of the South Asian population in the USA, particularly regional language speakers such as Telugu, Tamil, Kannada, Marathi, etc. The lineup includes flagship channels like Zee TV along with 17 additional ZEE channels, covering a variety of languages such as Zee Cinema, &TV, Zee Bangla, Zee Tamil, Zee Telugu, Zee Kannada, Zee Keralam, Zee Marathi, Zee Punjabi, Zee World, and others. Punit Misra, president of content and international markets at Zee Entertainment Enterprises, highlights the significance of the U.S. market within ZEE’s global strategy. He emphasizes the commitment to fulfilling the evolving content preferences of the expanding demographic in the US, providing viewers with a vast repertoire of rich, multi-lingual content from India. Ashok Namboodiri, CBO for International Business at Zee Entertainment Enterprises, underscores the importance of the partnership with YouTube TV in realizing growth objectives in the U.S. market. The collaboration ensures the provision of a diverse range of entertainment options specifically curated for the South Asian audiences subscribing to YouTube TV. Overall, the launch of these 18 South Asian channels on YouTube TV signifies a strategic move by Zee Entertainment to cater to the diverse cultural and linguistic preferences of the South Asian diaspora in the United States, enriching the viewing experience for consumers nationwide.

Sony Confirms Termination of $10 Billion Merger Deal with Zee Entertainment, Legal Battle Looms

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Sony Corporation officially announced on Monday the termination of its proposed $10 billion mega-merger deal with Zee Entertainment, marking the collapse of the ambitious alliance that aimed to create India’s largest entertainment company. The agreement was intended to provide substantial financial prowess, positioning the unified entity to compete with global streaming giants like Netflix Inc. and Amazon.com Inc., as well as local conglomerates such as Reliance Industries Ltd, currently exploring potential partnerships with Disney. The termination notice served by Sony brings an abrupt end to the negotiations, which had been anticipated as Sony Group Corp signaled its hesitancy to extend the discussions beyond the originally agreed-upon deadline. The termination follows a report on January 21 by ET (Economic Times) indicating that Sony was unlikely to prolong the good faith negotiations with Zee Entertainment Enterprises Ltd. (ZEEL). Zee Entertainment, in response to Sony’s move, expressed its intention to take legal action against the Japanese conglomerate, setting the stage for a potential legal battle between the two entities. The fallout from the failed merger deal adds a layer of complexity to the media landscape, with Zee Entertainment now reassessing its strategic options. In a prior development, Zee had requested Sony to extend the merger deadline from December 21, 2023, citing the need for more time. The merger deal, initially inked on December 22, 2021, faced hurdles and uncertainties, ultimately leading to its termination. The termination of the Sony-Zee merger deal raises questions about the future trajectory of both companies in the highly competitive Indian entertainment market. Industry observers are closely watching the aftermath of this high-profile breakdown and its potential implications for the broader media and entertainment landscape in India.

ZEE Entertainment Shares Rebound After Initial Plunge on Director’s Exit Ahead of AGM

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ZEE Entertainment Enterprises Ltd (ZEE) witnessed a brief setback as its shares tumbled by 9% during Thursday’s trading session following the unexpected exit of non-executive non-independent director Adesh Kumar Gupta from the board. However, the stock demonstrated resilience, recovering most of its losses as the session progressed. Gupta, who served as a crucial member of the audit committee and chairman of the risk management and stakeholders relationship committees, cited personal reasons and commitments for his departure ahead of the upcoming annual general meeting (AGM). The initial market reaction led to a decline of 8.79%, with the stock hitting a low of Rs 284.10 on the BSE. In his resignation letter, Gupta expressed regret for being unable to continue as a director due to personal reasons and commitments. He withdrew his re-appointment at the AGM but extended his best wishes for the company’s success, particularly emphasizing the completion of the pending merger with Sony. ZEE Entertainment responded by confirming Gupta’s exit from key committees after the AGM. The company’s 41st AGM is scheduled for Saturday, December 16, at 4:00 pm (IST). ZEE has announced that the AGM will be conducted through video conferencing and other audio-visual means, adhering to circulars issued by the Ministry of Corporate Affairs and the Securities and Exchange Board of India. Investors, initially concerned about the sudden exit, regained confidence as the trading session progressed, reflecting the market’s anticipation of a smooth AGM and positive outcomes for the pending merger with Sony.

Zee Entertainment signs global media rights contract with UAE’s T20 League

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Zee Entertainment announced today that it has signed a long-term global media rights agreement with the UAE’s T20 League, giving the broadcaster access to 34 matches from the cricket tournament. The league matches will be broadcast on both Zee’s linear channels as well as ZEE5, a streaming platform. The tournament will be broadcast in English, Hindi, and Tamil on ten linear channels in Hindi-speaking markets in the south and east. The broadcaster claims to have a global presence in over 190 countries, which will enable them to reach more than 100 million households with the league. “ZEE has decided to re-enter sports broadcast with UAE’s T20 League being the first media rights acquisition,” said Khalid Al Zarooni, Chairman UAE’s T20 League. Reliance Industries Limited, Adani Sportsline, Knight Riders, Lancer Capital, GMR Group, and Capri Global are among the six teams in the UAE T20 League. “We believe that the league, which is already attracting globally, the biggest cricket stars and team franchisees, will provide fantastic cricket and entertainment to viewers across the world,” said Rahul Johri, President – Business, South Asia, Zee Entertainment Enterprises Limited.