Zee-Sony merger approved by NCLT

The National Company Law Tribunal (NCLT) has approved the proposed merger of Zee Entertainment Enterprises Ltd with Sony India. Initially reserving its verdict on the merger between Zee Entertainment Enterprises and Culver Max Entertainment (previously known as Sony Pictures Networks India) on July 10, 

The NCLT’s approval led to a 15% jump in the company’s shares, hitting the upper circuit price limit of Rs 278.40 each on the BSE. Investors are celebrating the NCLT’s decision. 

Zee Entertainment’s shares experienced a sharp rise, jumping by 15% and getting locked into the upper circuit. The stock opened at Rs 243.05, remaining flat compared to the previous day’s closing price of Rs 242. While writing the article, the shares are trading at Rs 281 each on the BSE.

Today’s share volumes indicate a substantial increase of more than 7 times the average trading volumes on the BSE. 

In December 2021, Zee Entertainment and Sony Pictures reached an agreement to merge their businesses. Subsequently, both media companies approached the tribunal to seek approval for the merger, having already obtained necessary permissions from the National Stock Exchange (NSE), the Bombay Stock Exchange (BSE), and other regulatory bodies such as the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI). 

During the Q1 FY24 earnings conference of Zee, the leadership conveyed a positive outlook regarding the seamless finalization of the merger. Punit Goenka, the CEO of Zee Entertainment, clarified that his legal circumstances and the merger process were separate issues. The company emphasized that, apart from the stipulation solidifying its position as a crucial component of the merged enterprise, no other alterations were made to the clauses within the agreement. 

In the June quarter results posted on August 09, the company’s revenue from operations experienced an 8% YoY increase, rising from Rs 1843 crore to Rs 1984 crore. The operating profit of the company declined from Rs 268 crore to Rs 159 crore. On a sequential basis, it grew from Rs 152 crore to Rs 159 crore. The operating profit stood at 8%, down from 15% during the same period in the last quarter. 

However, the company’s net loss amounts to Rs 53 crore, in contrast to a net profit of Rs 107 in the same quarter last year. 

The stock has displayed remarkable performance recently, delivering a 20% return in a week and an impressive 46% return in the last three months. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.