Dish TV India had touched a 10-year low on January 28, slipping 43 per cent in two trading sessions, driven by promoters’ pledge and media reports that suggested a link which emerged between Essel Group and a company being probed for suspected demonetisation deposits. However, the company had clarified that it had no dealings whatsoever with Nityank Infrapower and Multiventures.
On January 25, 2019, ECL Finance, the lending arm of Edelweiss Group, and IIFL Wealth Finance sold 24.4 million shares of Dish TV India, equivalent to 1.5 per cent of Dish TV India. IIFL Wealth Finance sold 12 million shares at price of Rs 24.23 per share, while ECL Finance offloaded 12.4 million shares at Rs 23.2 per share on the NSE, bulk deal data showed.
Meanwhile, Dish TV India’s promoter group firms World Crest Advisors LLP (0.86 per cent), Direct Media Distribution Ventures (0.80 per cent) and Veena Investments Pvt Ltd (0.35 per cent) sold shares worth Rs 97.34 crore in the company between January 25 and January 29, 2019, the company said.
“Stake sale in Zee and group’s infra asset portfolio is an immediate re-rating trigger. It may play-out soon. This would lead to resolution of overhang on pledge shares,” analysts at HDFC Securities said in Q3FY19 results review.
Sharpened focus and tightened execution on subscriber quality are inevitable for sustained re-rating. Our faith keeps diminishing as DITV mgmt/promoters have been unable to deliver over a long period. But, the possibility of it getting acquired (hostile or strategic) with management change is possible, it added.
The lenders have offered a 90-day period to Zee Entertainment to close a deal with a strategic partner; until this, they would not invoke the pledged shares. Almost 97% (value terms) of lenders have agreed to the terms and talks are ongoing with the rest. A unanimous agreement has been reached, largely due to collateral pledged by ZEE as well as lenders’ confidence on its intrinsic value.
“We expect price performance to remain with a positive bias in anticipation of an open offer for stake sale, selling pressure evading, as lenders hold on to their positions and fundamental business valuation turns inexpensive currently (trading at 16x FY20E P/E). We believe medium to longer-term performance still depends on the strategic partner deal structure, which is still uncertain,” analysts at Elara Capital said in Zee Entertainment update.
The stock of Zee Entertainment was up 2 per cent at Rs 439 in intra-day trade today. It bounced back 52 per cent from its January 25 low of Rs 289 on the BSE.