Abneesh Roy of Edelweiss Securities is positive on Zee Entertainment as he believes the company has addressed all the issues that led to fall in the stock on Friday.
“In Friday’s crash, only 0.6 percent of the promoters’ stake got sold so still 41 percent stake management continues to have. If the infrastructure deals happen, I think most of the pledging will go away. So they are going to file this lawsuit because they have said that the promoters are not being investigated and Zee and Essel don’t have any linkage to that. So most of the key concerns why the Zee stock fell on the bankruptcy kind of issue, I think as of now that is getting addressed,” said Roy.
“They have signed this formal deal with the bankers which will give them more time to do the deal. There was a section of the street which had doubts whether deal will happen or not. now, with these developments, I think deal definitely will happen. Timelines – the good part is it is beyond two-three months, so it is not necessarily in the next two-three months, the deal has to happen but my sense is they would like to do it earlier. Good part is 96-97 percent of the lenders have agreed and the balance also, the management is working,” he added.
“The stock from here clearly is looking to be trailing what happens on the deal but fundamentally Zee business doesn’t get impacted by this and 15-16 times, post the Friday fall, I think the stock is definitely interesting from a medium-term to long-term perspective,” said Roy, adding “We have a buy on Zee Entertainment".