Zee’s largest shareholder, ICICI Prudential Mutual Fund, sells 42% of holding

Bengaluru: Embattled Zee Entertainment Enterprises Ltd’s largest shareholder, ICICI Prudential Mutual Fund, has sold 42% of its holding in the company after Japan’s Sony Corp. called off the merger of its Indian entity with Zee, the country’s largest media and entertainment company.

ICICI Prudential Mutual Fund, which owned 7.25% in Zee Entertainment as of 31 December, sold 2.15% equity between 20 January and 30 January. It is now the third-largest shareholder in Zee Entertainment, owning 5.09%. 

Post this transaction, Nippon Mutual Fund is the largest shareholder in Zee, owning 6.12%, and Life Insurance Corp of India is the second-largest investor, owning 5.12% as of 31 December.

“The fund under its scheme has carried out net sale of 18,76,304 shares of the company on January 30, 2024. As a result, the shareholding of the Fund has decreased by 2.15% of the paid-up capital of the company as compared to previous disclosure on January 20, 2023 for 7.24%,” ICICI Prudential Asset Management said in a stock exchange filing dated 31 January.

“It may be further noted that the schemes of the Fund have carried out net sale of 2,06,48,930 shares of the company from the last filing submitted on January 20, 2023 (for positions held as on January 19, 2023),” it said.

The volume-weighted average price (VWAP) of Zee shares between 20 January and 30 January was ₹177.09 apiece, implying ICICI Prudential Mutual Fund earned ₹365.7 crore from the share sale.   

Mint could not ascertain the buyer of the shares.

It is significant to note that Sony India informed the board of Zee of its decision to call off the merger on 22 January. Subsequently, on the same day, Zee informed the exchanges about the development. But ICICI Prudential Mutual Fund’s filing says that the fund had started to sell some of its shares on 20 January itself.

When markets resumed trading on 23 January, Zee shares plunged 33%.

Zee’s founder and chairman emeritus Subhash Chandra and his family own 3.99% of the company, while domestic mutual funds and insurance companies own the largest chunk, 43.15%. Foreign investors own 27.2%, while retail shareholders own 12.41%. Corporate entities and other investors own the remaining 13.3% of the Mumbai-based entertainment company.  

Sony in a statement had said it was “extremely disappointed" in failing to close the merger and has demanded $90 million in damages from Zee for its failure to comply with conditions needed to close the deal. 

The Japanese group has taken Zee to the Singapore International Arbitration Centre, even as Zee has denied any shortcoming on its part and filed a case at the Mumbai bench of the National Company Law Tribunal.