Here’s Why a Flurry of Brokerages are Bullish on Zee Entertainment: Rationale Here

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Here’s Why a Flurry of Brokerages are Bullish on Zee Entertainment: Rationale Here
Credit: © Reuters.

By Malvika Gurung -- Shares of the media conglomerate Zee Entertainment (NS: ZEE ) tumbled over 2.5% on Wednesday after it signed a definitive agreement to merge with Sony Pictures Networks India Private Limited (SPNI). However, by the end of the session, the stock managed to pare losses and closed 0.27% up.

Following the merger finalization, different brokerages are initiating Buy calls on the media stock, predicting that when the deal seals, Zee will value at historical highs.

Domestic brokerage Motilal Oswal (NS: MOFS ) has upgraded its rating on Zee to ‘Buy’ with a target price of Rs 425/share, an upside of almost 22% compared to its current market value of Rs 348.75.

It states that a strategic partner like Sony will leverage large opportunities for Zee, thereby turning it into a dominant player. 

Foreign brokerage CLSA (HK: 6877 )continues to maintain its Buy rating on Zee, with a target price of Rs 395/share, backed by the rationale that when the deal is sealed, which according to the agreement would take at least 8 months, the valuation of the stock has high chances of returning to highs of 30 times its PE.

Citi too has maintained its Buy target on the stock, with a target price of Rs 395/share, and states that while all are on the approvals now, detailed monitoring of how Invesco Oppenheimer and other key institutions vote, will be required.

According to the signed definitive agreement, Zee will merge with SPN, and the newly merged company will be publicly listed on the Indian exchanges. The promoters of Zee will receive Rs 1,101 crore, as per an agreement, which it will use to purchase 3.67 crore shares in the merged company, priced at Rs 300 apiece.

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  • nath corporation @nath corporation
    If bought 350 whether i shld hold or sell in short term
    Like 0

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