Investment of Rs 1 lakh in this media stock would have turned to Rs 2.07 lakh in just four months!

The stock which was trading at Rs 168 on August 24, closed at Rs 349 yesterday, on 22 December 2021, giving returns of 107% in just 4 months! The stock has a 52-week high of Rs 378.6 and a 52-week low of Rs 166.80.

Zee Entertainment Enterprises Ltd (ZEEL), which is the Essel Group-owned Indian media conglomerate, has turned into a multibagger by delivering staggering returns of 107% in the last four months. In September itself, the stock soared by 74.21% on a month-on-month basis.

This surge came on the back of the announcement of a mega-merger with Sony Pictures Networks India (SPNI). While the decision of merger was approved by the Board of Directors in September, the definitive agreements were signed yesterday, on 22 December 2021, after 90 days to conduct due diligence for the process. As per the agreement, Sony will invest USD 1.5 billion and hold a 50.86% stake in the merged entity, the promoters (founders) of ZEEL will hold 3.99% whereas Zee will hold the remaining 45.15%. The merged entity shall have a nine-member board, which will include five Sony executives.

The merged entity shall own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India) making it the largest entertainment network in India. This merger will enable the merged entity to drive sharper content creation across platforms, bolster its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fast-growing sports landscape and pursue other growth opportunities.

The company was in controversy because of a feud with Invesco, which is its largest minority shareholder. This is because the company’s official press release in September stated that ‘the promoter family was free to increase its shareholding from 4% to up to 20%, in a manner that is in accordance with applicable law.’ The latter had openly questioned this stake enhancement decision of the promoter family and had demanded the removal of Punit Goenka, who is the MD and CEO of ZEEL.

At 11.57 am, the share price of Zee Entertainment Enterprises Ltd (ZEEL) was trading at Rs 347, which was a decline of 0.57% from the previous day’s closing price of Rs 349 on BSE.