Zee Entertainment Enterprise shares zoomed to 271.80, translating into the gain of 3.79 per cent or 9.90 points. The shares of Zee rose rose after Rakesh Jhunjhunwala’s stock trading firm Rare Enterprise and BofA securities picked up stake in the Zee Entertainment Enterprise. On Tuesday, the scrip of Zee Entertainment rose 40 per cent to 260.50 apiece after investors sought the removal of its three directors, including its chief executive officer Puneet Goenka. Invesco Developing Markets Fund and OFI Global China Fund LLC, with a combined 17.9 per cent stake in the company, called for an extraordinary general meeting of shareholders to remove Punit Goenka, Manish Chokhani and Ashok Kurien from the board. However, Manish Chokhani and Ashok Kurien have resigned from the position of non-executive non-independent directors of the company with immediate effect.
It has touched a 52-week high of Rs 295.15. It has touched an intraday high of Rs 295.15 and an intraday low of Rs 262. It was trading with volumes of 4,235,668 shares, compared to its five day average of 1,693,108 shares, an increase of 150.17 percent. Zee Entertainment Enterprise stock lost 19 per cent in the last three months.
Another factor that is propelling this massive rally is the buying of shares by Rare Enterprise and Bofa Securities, the share of Zee Entertainment surged after Rakesh Jhunjhunwala’s stock trading company Rare Enterprise along with BofA securities picked up half percent stake in the Zee Enterprise.
“Invesco is one of the largest stakeholders in the company called for rejig of management as per the report the roadblock for Zee was the corporate governance which on solving has boosted market sentiments on stocks. It is a big brand with a strong network and operations and its stock is trading at attractive valuation. Investors can hold as Defensive entry one can add this at a retracement level at about Rs 200-210(retest) and aggressive entry can be at current levels at Rs 262 (breakout taken),” Manoj Dalmia, founder and director, Proficient Equities Pvt Ltd said.
Rare Enterprise, a stock trading firm owned by ace investor Rakesh Jhunjhunwala bought nearly 5 million shares of Zee Entertainment Enterprises Ltd for Rs 110.22 crore in a block deal, according to NSE Data. The ace investor picked up the 0.52 per cent stake at ₹220.44 apiece through his investment arm Rare Enterprises. In addition to this deal, another deal took place that involved BofA Securities Europe SA, which bought 4.86 million Zee Entertainment shares for Rs 115 crore at ₹236.20 apiece. As of June, BofA Securities held a 1.03 per cent stake in Zee.
Zee Entertainment Enterprises, founded by Essel Group’s Subhash Chandra, is majority-owned by foreign institutional investors, including Invesco Developing Markets Fund and OFI Global China Fund. Essel Group holds just 3.9 per cent, although the company continues to be run by Chandra’s son
“As we see after the boardroom drama, Zee Entertainment stocks rallied more than 50 per cent in the last two days. Many HNI invested in this stock with Vanguard picking up 59 lakh shares in the last financial year. Now we can see a technically very strong breakout with huge volumes. The target price of Zee entertainment share will be around Rs 500 in one year. As OTT platform is the future, Zee Entertainment will continue to find valuation as per growth,” said Ravi Singhal, vice chairman, GCL Securities Limited.
The company reported consolidated sales of Rs 1808.56 crore for the quarter ended in June 2021, down 8.86 per cent from previous quarter’s Rs 1,984.39 crore and down 35.13 per cent from the year-ago quarter’s Rs 1,338.41 crore. The net profit for latest quarter stood at Rs 213.74 crore, up 603.79 per cent from the corresponding quarter last year. A report by Ficci and consultant EY pegged India’s television market at ₹68,500 crore in 2020 and forecast it to grow to ₹84,700 crore in 2023.