Shares of Zee Entertainment surged by over 7 per cent on July 12, 2024, marking the biggest single-day gain since April this year. The rally came after the company announced a board meeting to consider significant fundraising proposals.

Fundraising proposal announcement

Zee Entertainment disclosed that its board of directors would meet on July 16 to discuss raising funds through various methods, including private placements, Qualified Institutional Placements (QIP), and preferential issues, in a statement to the exchanges on July 11. The announcement detailed the potential issuance of securities through multiple tranches, aiming to bolster the company’s strategic flexibility in pursuing future growth opportunities within the media industry.

This development followed the board’s decision on June 6 to approve raising funds amounting to ₹2,000 crore. The company emphasized that this capital influx is crucial for enhancing its strategic options and seizing growth prospects in the evolving media landscape.

The news of the potential fundraising was met with enthusiasm in the market, leading to a 7% surge in Zee Entertainment’s stock. Despite this positive movement, the stock has experienced a tumultuous year, with a 45% decline in value so far in 2023. The stock had seen some recovery over the past four months, but it had suffered significant corrections between January and March.

ZEEL share price was trading in green, up 6.90 per cent at ₹157.34, on July 12, at 12:21 pm on NSE. The company enjoys a market capitalisation of ₹15,112.81 crore. ZEEL stock price hit its 52-week high of ₹299.70 on December 12, 2023, which is around 47 per cent over the latest trading price.

Impact of the ZEEL-Sony merger collapse

Earlier this year, Zee Entertainment faced a severe blow when its proposed $10 billion merger with Sony was called off due to various issues. The merger’s collapse triggered a massive 30% drop in Zee’s stock in a single day, the largest in the company’s history. Following this event, several brokerages downgraded their ratings on the company, further contributing to the stock’s volatility.