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The scrip was trading 4.13 per cent higher at Rs 359.50 at around 1.20 pm (IST), taking their three-day rally to over 25 per cent during November 18-22.
Shares of country’s biggest listed media company were sold in block deals on the NSE on Thursday at Rs 304 apiece. While the promoters are now left with just 5 per cent stake in the company, they raised more than Rs 4,500 crore from the deals to repay lenders.
Citi and JP Morgan were the book runners for the block deals.
Among the domestic funds that bought into the stock were SBI Mutual Fund, ICICI Prudential, Sundaram, Axis Mutual Fund, and the Edelweiss Group. Among the other overseas funds were Morgan Stanley, Societe Generale, Fidelity, and Nomura.
According to ICICIdirect, one key positive takeaway form the stake sale was removal of overall stock price led volatility owing to pledge issue. “However, we note that sale to financial investors was a tad disappointing as strategic investors coming in would have added value to the stock. On the operating front, the aggressive spending to build a content library as well as related party dues remains a spoiler,” the brokerage house said.
The brokerage house further added that the near-term concerns include softer advertisement outlook due to macroeconomic challenges as well as possible risks of tweak in NTO policies.
Emkay Global Financial Services has ‘Hold’ rating on Zee with a target price of Rs 389. On the positive side, the brokerage house believes that the deal removes the pledge overhang while also ensuring the continuation of the current management team. However, on the other side it added that net cash in the balance sheet fell to Rs 1,480 crore in Q2FY20 from Rs 3,240 crore in Q4FY18.
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