Zee Entertainment hits 52-week high; surges 22% in two weeks

Shares of Zee Entertainment Enterprises (ZEEL) hit a 52-week high of Rs 363.50, up 4 per cent on the BSE in Monday’s intra-day trade in otherwise subdued market. The stock of broadcasting & cable TV operator has surpassed its previous high of Rs 362.85, touched on September 23, 2021. In comparison, the S&P BSE Sensex was down 0.35 per cent at 57,493 points at 10:17 am.

In the past two weeks, the stock has rallied 22 per cent after after Punit Goenka, MD and CEO of ZEEL said that merger talks between the company and Sony Pictures Networks India (SPNI) are in final stages.

ZEEL and SPNI had announced a merger in September of their India businesses with Sony holding the majority stake. About 53 per cent of the merged entity would be owned by Sony and the rest by Zee’s holders, according to the non-binding agreement signed in September. In past three months, the market price of ZEE more-than-doubled or up 102 per cent, against 1.4 per cent decline in the S&P BSE Sensex.

On September 14, 2021, Ace investor Rakesh Jhunjhunwala's Rare Enterprises had bought 5 million equity shares of ZEEL, worth of Rs 110 crore, at a price of Rs 220.44 per share through bulk deal transactions on NSE.

Meanwhile, analysts at Emkay Global Financial Services have maintained ‘buy’ rating on ZEEL with revised target price of Rs 415 (Rs 430 earlier). “With a clear focus on market share gains, content launches should remain at elevated levels in H2. Zee is also targeting the release of 17-18 original shows, with the view of increasing the revenues from Zee5. Ad revenues are expected to rise in H2FY22 and reach pre-Covid-19 levels, but this is contingent on market share recovery across key channels,” the brokerage firm said in September quarter result update.

The has management stated that the due diligence process for the Zee and Sony Pictures Networks India (SPNI) merger is progressing well. The successful competition of this, along with shareholder approval for the deal, would be the key near-term triggers for a re-rating, it added.