Shares of Zee Entertainment surged over 7% on July 12, 2024, after the company announced plans to raise ₹2000 crore to support its growth. This marks the biggest single-day gain since April this year.
Fundraising Announcement
Zee Entertainment revealed that its board will meet on July 16 to discuss raising funds through methods like private placements, Qualified Institutional Placements (QIP), and preferential issues. The funds will be raised in multiple stages to help the company seize future growth opportunities in the media industry.
This decision follows a June 6 board meeting where the company approved the ₹2000 crore fundraising plan. Zee believes this capital is essential for enhancing its strategic options and growth prospects in the evolving media landscape.
Market Reaction
The fundraising news was well-received by investors, resulting in a 7% increase in Zee Entertainment’s stock. Despite this positive movement, the stock has had a tough year, dropping 45% in value so far in 2023. However, it has seen some recovery over the past four months after significant drops between January and March.
As of 12:21 pm on July 12, Zee Entertainment’s share price was up 6.90% at ₹157.34 on the NSE, with a market capitalization of ₹15,112.81 crore. The stock hit its 52-week high of ₹299.70 on December 12, 2023, which is 47% higher than the latest trading price.
Impact of the ZEEL-Sony Merger Collapse
Earlier this year, Zee Entertainment faced a major setback when its proposed $10 billion merger with Sony was called off. This led to a 30% drop in Zee’s stock in a single day, the largest drop in the company’s history. Following the collapse of the merger, several brokerages downgraded their ratings on the company, adding to the stock’s volatility.
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