ZEE approves ₹3,144 crore preferential warrant issue to promoter group entity

The board of Zee Entertainment Enterprises Ltd (ZEEL) on Wednesday approved a preferential issue of fully convertible warrants worth up to ₹3,143.5 crore in favour of promoter group entity Sunbright Mauritius Investments Ltd, paving the way for a major capital infusion into the company. The board also approved the launch of a new employee stock option scheme (ESOP 2026).

The proposed fundraising, which is subject to shareholder and regulatory approvals, involves the issuance of up to 24.95 crore fully convertible warrants at an issue price of ₹126 each. Every warrant will be convertible into one fully paid-up equity share with a face value of Re 1 within a maximum period of 18 months from the allotment date.

As per the company, the overall issue size is estimated at around ₹3,143.52 crore. The warrants will be issued on a preferential basis to Sunbright Mauritius Investments Ltd, a promoter group entity, in accordance with the Companies Act, 2013 and Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

In line with the issue terms, the proposed allottee will pay 25% of the warrant price, equivalent to ₹31.50 per warrant, at the time of subscription. The remaining 75%, or ₹94.50 per warrant, will be payable upon exercising the conversion option. The warrants can be converted into equity shares in one or multiple tranches within 18 months from the date of allotment. Any warrants that remain unexercised after the prescribed period will lapse, and the subscription amount already paid will be forfeited.

The company stated that upon conversion, the proposed preferential issue would enable Sunbright Mauritius Investments Ltd to hold up to 24.95 crore warrants, accounting for as much as 20% of ZEEL’s fully diluted equity share capital. Before the proposed allotment, the promoter group entity did not own any shares in the company.

ZEEL said the issue price of ₹126 per warrant comprises a premium of ₹125 over the face value of Re 1 per share. The price reflects an 11.86% premium over the value determined under the SEBI ICDR Regulations and a 16.33% premium compared to the company’s closing share price on the National Stock Exchange on July 1, 2026. The company further stated that the pricing was finalised after considering both a pricing report and a valuation report prepared by a registered valuer in accordance with the applicable SEBI regulations.

Apart from the capital-raising proposal, the board also approved the introduction of ESOP 2026, subject to shareholder approval. The employee stock option scheme will be implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, along with other applicable legal provisions.

Under the proposed scheme, ZEEL may grant up to 3.74 crore employee stock options, with each option being convertible into one equity share having a face value of Re 1. The exercise price for every option has been fixed at ₹126 per share. The company said additional details regarding vesting schedules, exercise periods and other key terms will be disclosed while seeking shareholder approval.

The board also approved convening a shareholders’ meeting to obtain approval for both the preferential issue of warrants and the ESOP 2026 proposal.

ZEEL said that both the preferential allotment and the proposed ESOP scheme remain subject to approvals from shareholders as well as relevant statutory, regulatory and government authorities, wherever required. Pitchonnet