Why is Invesco offloading its stake in Zee Entertainment?

Invesco Developing Markets Fund, which currently owns about 10.14% stake in Zee Entertainment, had already announced plans to sell half of its stake in the company in a block deal on Tuesday, the 18th of October 2022. As per exchange report on bulk deals, about 53 million shares of Zee Entertainment changed hands in the first hour on Tuesday, roughly representing half of the stake held in Zee by Invesco Developing Markets Fund. The deal was worth Rs1,396 crore on the stock exchange as per reports of the block deal executed on the National Stock Exchange (NSE).

The deal happened at a price of Rs263.70 per share on an average and the deal also led to the stock price surging to above Rs280 in early trades on Tuesday. While the seller was known, the block deal indicated that there was substantial appetite and the entire supply was absorbed rapidly in the market. Kotak Securities had been mandated by Invesco to execute the block deal on their behalf. The price of Rs263.70 represents the upper price band at which Invesco intended to execute the entire trade. The deal was actually executed through the OFI Global China Fund, which is part of the Invesco family.

Interestingly, this block deal is the second in the last seven months. Earlier, in April 2022, Invesco had offloaded 7.8% stake in Zee Entertainment worth Rs2,092 crore and had reduced its stake from above 18% in Zee Entertainment to just above 10%. Now its stake will be just above 5% in Zee post the latest block deal. Clearly, Invesco is looking to exit the entire holdings at a decent return on investment and is not interested in a long term investment post the deal with Sony. This also removes any friction in the way of the Zee Sony deal since now Invesco is just left with a little over 5% stake in the company.