Zee Entertainment Shares Rise Over 2% After NCLAT Rejects IDBI’s Insolvency Plea

The National Company Law Appellate Tribunal (NCLAT) has dismissed IDBI Bank’s plea seeking insolvency proceedings against Zee Entertainment Enterprises Ltd (ZEEL). The appellate body upheld the earlier decision of the National Company Law Tribunal (NCLT), which had rejected the bank’s plea.

The ruling is a relief for Zee Entertainment, which had opposed the initiation of insolvency proceedings and the issuance of any notice in this regard.

Tribunal Allows Liberty for Fresh Plea

While dismissing the appeal, the NCLAT has granted IDBI Bank the liberty to file a fresh application against Zee Entertainment for defaults that occurred beyond the COVID-19 moratorium period. The appellate tribunal stated that the lender can pursue a fresh case if the alleged defaults are found to be outside the protection window provided during the pandemic.

IDBI Bank had approached the NCLAT after the Mumbai bench of the NCLT rejected its insolvency plea in May 2023. The appellate body had first agreed to hear the matter in August 2023.

Loan Guarantee Linked to Siti Networks

In its original petition, IDBI Bank claimed that Zee had provided a guarantee for loans extended to Siti Networks through a Debt Service Reserve Account (DSRA) mechanism. The bank argued that the DSRA was to be maintained by Siti Networks, and that Zee, having issued the guarantee, was liable for any shortfalls.

The bank added that Zee was informed of the shortfall in the DSRA and was thus responsible for addressing the default. Zee, however, countered the claims, challenging the very basis of the insolvency plea and urging its dismissal.

Stock Performance 

On April 08, 2025, Zee Entertainment Enterprises share price traded 2.73% higher at ₹99.83 at 9:21 AM (IST). Zee Entertainment Enterprises share price reached a 52-week high of ₹168.70, and a 52-week low of ₹89.29. As per BSE, the total traded volume for the stock stood at 0.39 lakh shares with a turnover of ₹39.47 lakhs.

According to exchange data, Zee Entertainment Enterprises shares are trading at a price-to-earnings (P/E) ratio of 15.22x, based on its trailing 12-month earnings per share (EPS) of ₹6.56, and a price-to-book (P/B) ratio of 0.92.

Conclusion

The NCLAT’s dismissal of IDBI Bank’s insolvency plea offers short-term relief for Zee Entertainment, though the door remains open for future legal action based on post-Covid defaults. The ruling reinforces the importance of clearly defined liabilities during moratorium periods.

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