Highlights
- Zee Entertainment approved a preferential warrant issue aggregating up to Rs. 3,143.52 Cr.
- The Board also approved the proposed ESOP 2026, subject to shareholders' approval.
- Warrants may be converted into equity shares within 18 months from the allotment date.
Zee Entertainment Enterprises Limited (NSE:ZEEL) has approved a preferential issue of fully convertible warrants aggregating up to Rs. 3,143.52 Cr. The decision was taken at the company's Board meeting held on July 1, 2026, and remains subject to shareholder and other statutory or regulatory approvals.
According to the filing, the company proposes to issue up to 24,94,85,563 fully convertible warrants to Sunbright Mauritius Investments Limited, a promoter group entity. Each warrant will be convertible into one fully paid-up equity share of face value Re. 1.
Source: Analysis by Kalkine
Issue Priced at Rs. 126 Per Warrant
The Board approved the issue price of Rs. 126 per warrant, comprising a face value of Re. 1 and a premium of Rs. 125 per warrant.
As per the approved structure, subscribers will pay 25% of the issue price, or Rs. 31.50 per warrant, at the time of allotment. The remaining 75%, amounting to Rs. 94.50 per warrant, will be payable when the warrants are exercised.
The company stated that the warrants may be converted into equity shares in one or more tranches within 18 months from the date of allotment. If the warrants remain unexercised after the stipulated period, they will lapse and the subscription amount paid at the time of allotment will stand forfeited.
Promoter Group Entity to Receive Warrants
The proposed allotment will be made to Sunbright Mauritius Investments Limited, which currently does not hold any shares in Zee Entertainment.
Following conversion of the warrants, the proposed allottee could hold up to 24,94,85,563 equity shares, representing up to 20% of the company's fully diluted share capital, based on the enhanced outstanding share capital after conversion.
The company stated that the issue price has been determined in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, after considering pricing and valuation reports obtained from a registered valuer.
Board Approves ESOP 2026 Proposal
The Board also approved the introduction of an Employee Stock Option Plan (ESOP 2026), subject to shareholder approval.
Under the proposed scheme, the company may grant up to 3,74,22,835 stock options, with each option convertible into one equity share of face value Re. 1. The exercise price for each option has been fixed at Rs. 126.
The company stated that the plan will be implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, after obtaining the required approvals.
Shareholders' Approval to Be Sought
The Board has approved convening a shareholders' meeting to seek approval for both the preferential warrant issue and the ESOP 2026 proposal in accordance with the Companies Act, 2013 and applicable SEBI regulations.
The Board meeting commenced at 3:00 p.m. and concluded at 6:27 p.m.
Key Risks
- The preferential issue remains subject to shareholder and regulatory approvals.
- Warrant conversion depends on payment of the remaining exercise amount.
- Equity dilution may occur upon conversion of warrants and ESOPs.
- Market conditions could influence future capital-raising outcomes.
Summary
Zee Entertainment has approved a preferential issue of up to 24.95 crore fully convertible warrants worth approximately Rs. 3,143.52 Cr to Sunbright Mauritius Investments Limited at Rs. 126 per warrant. The Board also approved the proposed ESOP 2026 covering up to 3.74 crore options, subject to shareholder approval. Both proposals will be placed before shareholders for approval.
FAQs
Q: What capital raising proposal has Zee Entertainment approved?
A: The Board approved a preferential issue of up to 24,94,85,563 fully convertible warrants aggregating approximately Rs. 3,143.52 Cr.
Q: Who is the proposed allottee of the preferential warrants?
A: The warrants are proposed to be allotted to Sunbright Mauritius Investments Limited, a promoter group entity.
Q: What is included under the proposed ESOP 2026?
A: The proposed ESOP 2026 covers up to 3,74,22,835 stock options, each convertible into one equity share at an exercise price of Rs. 126.