Zee Entertainment Shares Fall 3% On Friday Despite Rs 600 Crore Buyback at Rs 91 Per Share

Shares of Zee Entertainment Enterprises Ltd (NSE: ZEEL | BSE: 505537) declined on Friday, November 13, despite the company announcing a Rs 600 crore share buyback at Rs 91 per share. The company's board approved the proposal on November 12, 2026, offering shareholders a buyback price at a premium of approximately 23.81 per cent to Thursday's closing price of Rs 73.50. However, the announcement failed to sustain buying interest, and the stock witnessed selling pressure during the trading session.

The company's board approved the repurchase of up to 6,59,34,065 fully paid-up equity shares with a face value of Rs 1 each. The total buyback amount will not exceed Rs 600 crore, excluding applicable transaction costs and Taxes. The proposed buyback represents approximately 6.86 per cent of the company's total paid-up equity share capital. The transaction will be conducted through the tender offer route, allowing eligible shareholders to tender their shares at the specified buyback price.

The company has fixed the buyback price at Rs 91 per share, with the maximum number of shares proposed to be repurchased at 6,59,34,065. The record date has been set for November 25, 2026, to determine eligible shareholders. The promoter group has indicated that it will not participate in the proposed buyback.

Zee Entertainment shares opened at Rs 75 on November 13, above the previous closing price of Rs 73.50. However, the stock subsequently declined and touched an Intraday low of Rs 71.05, falling approximately 3.33 per cent from Thursday's closing price. At around 1:04 PM, shares were trading at Rs 72.22, down 1.74 per cent, despite the announced buyback premium.

One important factor is that shareholders are not guaranteed to sell their entire holdings at Rs 91. Under the tender offer mechanism, the number of shares accepted depends on the shareholder's entitlement, the quantity of shares tendered and the overall participation in the offer. Consequently, the announced buyback price does not automatically become the prevailing market price. The stock has also experienced considerable volatility, with a 52-week high of Rs 118.35 and a 52-week low of Rs 60.60.

The buyback announcement follows a quarter in which Zee Entertainment reported higher operating revenue but weaker profitability. In Q2FY27, consolidated operating revenue increased 13 per cent year-on-year (YoY) to Rs 2,224.60 crore from Rs 1,969.20 crore in the corresponding quarter of the previous financial year.

However, EBITDA declined 52 per cent YoY to Rs 70.80 crore compared with Rs 146.40 crore in Q2FY26. The EBITDA margin contracted to 3.2 per cent from 7.4 per cent. Net profit also declined approximately 40 per cent YoY to Rs 45.60 crore from Rs 76.50 crore. While subscription revenue increased 30 per cent YoY, advertising revenue remained broadly flat. Higher expenditure weighed on the company's overall profitability.

Zee Entertainment has fixed November 25, 2026, as the record date for determining shareholders eligible to participate in the buyback. At least 15 per cent of the proposed buyback shares, or the applicable higher entitlement, will be reserved for small shareholders under the prescribed regulations. The company will separately announce the tender offer period, participation process and other relevant timelines.

The proposed buyback could reduce the company's outstanding equity shares once completed. However, the actual financial impact will depend on the final number of shares accepted and the cash utilised for the transaction. Going forward, the company's ability to improve advertising revenue, operating margins and overall profitability will remain important factors for investors alongside the announced capital-return initiative.

Disclaimer: The article is for informational purposes only and not investment advice.