Mumbai: Global proxy advisory firm Glass Lewis has recommended that shareholders of Zee Entertainment Enterprises Limited (ZEEL) vote in favour of the company’s proposal to issue convertible warrants to its promoter group. The proposal, which will be put to vote at the Extraordinary General Meeting (EGM) on July 10, 2025, seeks approval for the preferential allotment of up to 169.5 million warrants to Sunbright Mauritius Investments Limited and Altilis Technologies Private Limited—both part of ZEEL’s promoter group. The issue is priced at ₹132 per warrant and could potentially raise ₹2,237 crore for the company.
According to ZEEL’s board, the funds will be utilised to scale up strategic business initiatives, maintain adequate liquidity in an increasingly competitive media environment, and finance bolt-on acquisitions in high-growth areas. The warrants will be convertible into equity shares on a 1:1 basis, with 25% of the issue price payable upfront and the remaining 75% within 18 months from allotment. The proposed issuance is expected to result in a dilution of approximately 15% of the share capital—a level Glass Lewis has termed as reasonable.
In its analysis, Glass Lewis noted that the proposed issuance complies with SEBI’s pricing norms for preferential allotments and does not raise concerns regarding fairness or governance. The proxy advisory firm has therefore advised institutional shareholders to vote in favour of the resolution, which requires a 75% majority to be passed.
While ZEEL has seen subdued market performance in recent years—with total shareholder returns (TSR) of -28.4% over one year and an average of -29.7% over three years—the company’s ESG profile remains robust. ESG risk rating agency Sustainalytics has classified ZEEL as being at low risk of material financial impacts driven by environmental, social, and governance factors. The company also ranks favourably in ESG Book’s governance metrics, placing in the 90th percentile within the broadcasting sector.
However, Glass Lewis did flag concerns regarding ZEEL’s cybersecurity posture. BitSight, a global cybersecurity rating firm, placed the company in the bottom 5% of the entertainment industry based on observable security performance indicators. While no publicly disclosed data breaches have occurred in the last 18 months, the low security score suggests a need for improved digital safeguards, especially as ZEEL accelerates its digital and streaming ventures.
ZEEL’s shareholding is widely distributed, with over 95% of equity held by public shareholders. Key investors include Sprucegrove Investment Management (5%), LIC (4.63%), Norges Bank (3.95%), and several domestic mutual funds and institutional investors. With strong institutional presence and Glass Lewis’s endorsement, the company is expected to garner substantial support for the resolution.
The EGM will be held in a virtual-only format, and the record date for determining shareholder eligibility was July 3, 2025. If approved, the preferential issue is expected to strengthen ZEEL’s financial flexibility and support its long-term strategic pivot in the dynamic media landscape.
