Zee Shareholders Block ₹2,237 Crore Warrant Proposal, Signal Pushback Against Promoter Control

Image Source: CNBC TV18

Zee Entertainment Enterprises Ltd faced a major shareholder revolt as investors rejected the company’s proposal to issue 16.95 crore convertible warrants worth ₹2,237 crore to promoter entities. The vote, held during the July 6–9 window ahead of the Extraordinary General Meeting, reflects growing concerns over governance, dilution, and promoter entrenchment.

Key Highlights:

The proposed warrants were priced at ₹132 each, marginally above SEBI’s floor price of ₹128.58, and would have raised promoter stake from 3.99% to 18.39%.
Proxy advisory firms including InGovern, IiAS, and SES (initially opposed, later supportive) flagged issues around excessive dilution, lack of capital urgency, and Zee’s governance track record.
Investors cited Zee’s existing cash reserves of ₹2,240 crore and questioned the need for additional fundraising via preferential allotment.
Promoters planned to use the upfront 25% payment (~₹574 crore) for new business initiatives like short-form content, edutainment, and live streaming, with the remaining 75% due upon conversion within 18 months.

Governance and Market Reaction:

The rejection follows earlier shareholder resistance to Punit Goenka’s reappointment as MD, amid regulatory scrutiny and SEBI’s interim orders on fund diversion.
The vote outcome signals investor demand for more transparent capital-raising mechanisms such as rights issues or QIPs.
Zee’s stock remained volatile post-vote, trading near ₹146.30 on the NSE, with brokerages adopting a wait-and-watch stance.

Sources: Moneycontrol, CNBC-TV18, Storyboard18, The Hindu BusinessLine, BestMediaInfo, Zee BSE Filings (July 2025)