Zee Entertainment Enterprises share price saw sharp decline of more than 25% on the NSE and the BSE, post Sony ended its merger agreement and demanded $90 million in termination fee. As the stock erased more than ₹5000 Crore market-cap, all investors including Mutual funds were at the receiving end.
The Mutual Funds are likely to have seen wealth erode by more than ₹1900 crore
As per the shareholding pattern data available on the BSE , at the end of December'2023, 29 mutual Funds were holding shares in the Zee Entertainment Enterprises. The total mutual fund shareholding percentage stood at 32.49% as the mutual funds held 31,20,70,141 shares in the Zee Entertainment Enterprises.
Overall while 7 promoters were holding 3.99% stake in Zee Entertainment Enterprises, public share holding stood at 96.01%.
The major mutual fund share holders included ICICI Prudential Value Discovery Fund that was holding 7.25% stake in Zee Entertainment Enterprises. Other prominent mutual funds were Nippon Life India Trustee Ltd-A/C Nippon India Multi Cap Fund that held 6.12% stake while HDFC Mutual Fund - HDFC Mid-Cap Opportunities Fund's share holding stood at 5.2%
Among others were Tata Large And Mid-Cap Fund, Aditya Birla Sun Life Trustee Private Limited A/C Aditya Birla Sun Life Arbitrage Fund, Kotak Equity Arbitrage Fund holding 2% or more stakes.
About 51 Mutual Funds bought and 33 Mutual Funds sold Zee Entertainment Enterprises Ltd. in the month of December 2023 for a net change of 1,415,436 stocks as per Trendlyne.com data
Zee Entertainments Enterprises share price decline was led by Japan's Sony Group Corp decision on terminating its merger with Zee Entertainment Enterprises Ltd. On Sunday 22nd January, Sony had sent termination letter citing its plans to call off the merger between its India unit and the media network.
Sony not only ended the merger agreement, it also has demanded $90 million in termination fees. Zee rejected the demand and said it plans to take legal action to protect stakeholder interests.
Various Brokerages have downgraded the Zee Entertainments stocks .
Motilal Oswal Financial Services downgraded the stock and indicated for more than 13% downside.
We do not expect a recovery in earnings in the near term. Zee has not stated whether it will pursue the merger while the litigation with Sony could hinder improvements in operations or explore a merger with other players, said analysts at MOFSL.
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