Zee Entertainment shares up nearly 40% in 10 sessions ahead of June 10 board meet

Shares of Zee Entertainment Enterprises

Ltd. (ZEEL) are trading higher by 1% on Monday, June 8, after the company announced that its board will meet on June 10 to consider a fund-raising proposal through the issuance of equity shares or instruments convertible into equity. The stock has gained nearly 40% in 10 sessions ahead of the board meet.

The development comes less than a year after shareholders rejected a proposal to issue convertible warrants to the company's promoters.

In July 2025, the special resolution failed to secure the required 75% approval threshold, with only 59.5% of shareholders voting in favour and 40.5% opposing the proposal.

At the time, proxy advisory firms including IiAS, SES and InGovern had recommended shareholders vote against the warrant issuance. Their concerns centred around ZEEL's substantial cash reserves of over ₹2,400 crore, the rationale for raising additional capital, and the potential 15% dilution for non-promoter shareholders.

Had the proposal been approved, promoter shareholding would have increased significantly from 3.99% to 18.39%.

Additionally, Zee has recently acquired broadcasting and streaming rights for 39 global FIFA events in India, including the FIFA World Cup 2026 and FIFA World Cup 2030.

Under the agreement, Zee will televise and stream FIFA tournaments in India over the next eight years through its sports channels and streaming platform, ZEE5.

As of the March quarter, ZEEL's cash and cash equivalents stood at nearly ₹2,760 crore.

Investors may also seek clarity on the company's capital allocation strategy amid developments related to its foreign currency convertible bonds (FCCBs).

In July 2024, ZEEL's board approved FCCBs worth around ₹2,000 crore and subsequently drew down about ₹200 crore. However, nearly 18 months later, the board approved the redemption of the drawn amount during Q4FY26 and cancelled the remaining undrawn commitment of approximately $215.1 million.

The company also continues to face a major legal overhang from its dispute with JioStar. During Q4FY26, JioStar raised its damages claim to $1.097 billion (about ₹10,400 crore) from $940 million earlier. The claim relates to ZEEL's alleged failure to fulfil obligations linked to the ICC television rights agreement for the 2024-27 cycle, including payment of the first instalment of $203.6 million.

Notably, the claim size is almost equivalent to ZEEL's current market capitalisation of roughly ₹10,800 crore.

Operationally, the broadcaster witnessed a challenging FY26, with revenue declining about 2% year-on-year and net profit falling nearly 60%.

For the March quarter, ZEEL reported an EBITDA loss largely due to a change in its movie-rights amortisation policy, which resulted in accelerated amortisation charges of ₹408.4 crore. The company said the revised methodology better reflects evolving content consumption and monetisation trends across television and digital platforms.

Excluding the impact of the accounting change, adjusted EBITDA stood at ₹139.8 crore, down 51% from a year ago, highlighting continued weakness in the core business. The company also said advertising revenue was impacted during March due to the West Asia geopolitical crisis.

On the positive side, ZEE5 reported its second consecutive quarter of EBITDA profitability, while revenue from the streaming platform surged 71% year-on-year.

During the quarter, ZEEL also approved an investment of ₹116 crore in Phantom Digital Effects through compulsorily convertible debentures (CCDs). Additionally, the board approved the early redemption of all outstanding 5% FCCBs worth $23.9 million and cancelled the remaining undrawn FCCB commitment.

Shares of Zee Entertainment Enterprises Ltd. ended 7.63% higher at ₹112.39 on Friday. The stock has gained 24% so far this year.