Shares of Zee Entertainment Enterprises soared 45 percent to touch an intraday high at Rs 270.85 on Tuesday on the BSE. The scrip was the best performer on Nifty 200 and ended 40 percent higher at Rs 261.50.
This comes after Manish Chokhani and Ashok Kurien resigned from the position of Non-Executive Non-Independent Directors of the company with immediate effect.
In a separate filing, the company’s shareholders, Invesco Developing Markets Fund and OFI Global China Fund LLC had called an extraordinary general meeting (EGM) seeking the removal of Punit Goenka, Manish Chokhani and Ashok Kurien as directors of the company.
This development comes ahead of the company’s annual general meeting which is scheduled for later today.
As of June-end, foreign portfolio investor Invesco Developing Markets Fund owned a 7.74 percent stake in the company while OFI Global China Fund LLC held a 10.14 percent stake.
Dipan Mehta, Director, Elixir Equities believes it is a step in the right direction. The present management has significantly diminished the value of Zee, it has been a massive underperformer.
"Getting new faces, new ideas can take the stock price higher. End of the day, Zee is a very strong brand and it has got a good network and is very strong in terms of its operations. But maybe the right type of management is what is missing over here," Mehta said.
Mehta also added that the valuations in Zee are attractive at this point in time and any such corporate action could trigger an upward movement in the stock price. So, if the company will have new faces, a new CEO who is an industry veteran can significantly move up the stock price from these levels.
CLSA Asia Pacific Markets had said in its report earlier this month, that the company’s stock has disappointed the Street lately owing to the pandemic crisis.
The stock is down over eight percent YTD. However, the brokerage firm expects strong growth going ahead, sees cash swell and believes the valuation is compelling, thereby retaining its “buy” rating.
First Published: IST