Zee Entertainment announces ₹600 crore buyback at 24% premium

MUMBAI: Zee Entertainment Enterprises Ltd has approved a ₹600 crore share buyback at ₹91 apiece, offering investors a premium of more than 23% to the stock’s last closing price. The move comes as the company seeks to restore investor confidence amid concerns over its growth prospects and profitability.
The buyback price represents a 23.8% premium to Zee Entertainment’s closing price of ₹73.50 on the National Stock Exchange on Thursday. Announced after market hours, the buyback will cover 6.86% of the company’s paid-up equity, Zee said in a press release.

The company’s promoters, the Goenka family and related entities, will not participate in the buyback. Together, they hold a 3.99% stake in Zee Entertainment.

“The Board recognized the buy-back as an optimal approach to reward the shareholders, as well as reinstate confidence in its robust fundamentals and strategic roadmap for the future,” the company said in the statement.

“The Board believes that the Company's intrinsic value is not appropriately reflected in its current market valuation, and the buy-back represents a prudent opportunity to reinforce confidence in the Company’s capabilities to generate long-term value for shareholders,” chairman R Gopalan added.

Zee’s largest non-promoter shareholders include state-owned insurer Life Insurance Corp. of India (LIC), foreign portfolio investors (FPIs), including Vanguard, and individual shareholders, who collectively hold more than 37% of the company. The latter category comprises investors holding shares worth up to ₹2 lakh each.

In July, the Goenka family proposed investing ₹3,143 crore in Zee through fully convertible warrants priced at ₹126 apiece, which would raise their stake to as much as 25%. The investment was proposed to be completed within 18 months of the subscription date.

Zee reported cash and cash equivalents of ₹2,570 crore as of September 2026. Its operating revenue rose 13% year-on-year to ₹1,969.2 crore in the September quarter, while net profit fell 40% to ₹76.5 crore.

Advertising revenue remained flat at around ₹800 crore, weighed down by weakness in linear television. Subscription revenue, however, grew 30% year-on-year to ₹1,332 crore.

In June, Zee secured comprehensive eight-year rights to the FIFA World Cup and related properties for an estimated $30 million, Mint reported. The rights to the marquee football event had remained unsold for weeks ahead of this year's tournament, with Zee acquiring them just before the start of the event.

Despite aggressive investments in sports and early signs of a turnaround in its digital streaming business, analysts remain cautious about Zee’s longer-term growth prospects.

“FIFA-led subscriber retention of ~35-40% is encouraging, although elevated content investments and the structural shift in advertising spends toward digital remain key concerns,” analysts at Motilal Oswal wrote in a note dated 1 November.

“We cut our FY27/28E Ebitda estimates by 11%, driven by subdued ad environment and weaker profitability amid higher content investments. Despite a continued trend of decline in ad revenue for the past several years, we have built in ~4% annual growth in ad revenue in FY28/FY29, which has downside risks from the structural shift in ad spends to digital.”

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