Zee Entertainment Shares Zoom As Promoters Sell Stake

Shares in Zee Entertainment Enterprises Ltd (ZEEL) soared by 12 per cent on Thursday, a day after media baron Subhash Chandra-led Essel Group said it was planning to sell up to 16.5 per cent in the company. Subhash Chandra's Essel Group said it sought to sell the stake in ZEEL to financial investors in order to repay loan obligations to certain lenders. After the transaction, promoters' stake in Zee Entertainment would be reduced to 5 per cent, which means that Subhash Chandra will lose control of Zee Entertainment Enterprises.

Zee Entertainment shares surged as much as 14.99 per cent to touch the upper circuit at Rs 353.20 apiece amid high volumes, before giving up some of those gains.

Prior to Wednesday's announcement, Mr Chandra's Essel Group companies held a 22.37 per cent promoter stake in Zee.

Of this, 21.48 per cent was pledged as collateral against finances availed by Essel Group firms. After the stake sale, the overall holdings of the Group in ZEEL will be 5 per cent, out of which encumbered holdings of the group will reduce to 1.1 per cent. This means that Mr Chandra will lose control of Zee Entertainment Enterprises.

Zee Entertainment shares ended at Rs 345.25 apiece on the BSE, up 12.4 per cent from their previous close, outperforming the benchmark Sensex index which was down 0.19 per cent at 40,573.62.

Around 22.00 lakh shares had changed hands on the BSE at that time, as against an average of 8.57 lakh over the past two weeks, according to exchange data.

The Zee Entertainment Enterprises stock had ended Wednesday's session 7.89 per cent higher at Rs. 307.15 apiece on the bourse.

Shares in rival Dish TV erased early gains to end deep in the red at Rs 15.8 on the BSE, down 6.1 per cent from the previous close.