The board of Zee Entertainment Enterprises Ltd has approved a proposal to raise ₹2,000 crore through various routes.

Zee said the funds will offer “strategic flexibility to pursue future growth opportunities in the evolving media landscape’’.

It did not offer details on the purpose of raising funds.

The amount would be raised in one or more tranches, through private placement, a qualified institutional placement (QIP), preferential issue or a combination of them.

“The board of directors of the company at its meeting held today (Thursday) has, inter-alia, considered and given its in-principle approval to raise funds... not exceed ₹2,000 crore,” a regulatory filing from the company said.
The stock markets reacted positively to the announcement with its shares jumping 5.71 per cent to close at ₹154.65 on the NSE.

This fundraising from the Punit Goenka-led company is the first after Sony Corporation terminated a $10 billion deal early this year.

After the termination, Zee announced a streamlined organisational structure. It led to MD and CEO Punit Goenka assuming direct charge of critical verticals, including the domestic broadcast business. Zee will have four key business segments — broadcast, digital, movies and music.

At a conference call with analysts after its fourth quarter results, Goenka said that the company has made significant progress on the proposed roadmap of attaining EBITDA margin of 18-20 per cent for 2025-26.

Commenting over the development, Karan Taurani SVP of Elara Capital said: “We believe this will boost investor confidence, which has been low since the merger with Sony was called off. The total fundraising amount is up to ₹2,000 crore, which is about 14 per cent of the current market cap, though we don’t expect the entire amount to be raised.”

The cash infusion could lead to improved investor confidence and sentiment and business expansion and investments, given the increased competitive intensity in the sector following the RIL-Disney merger.