Zee Entertainment promoter allotted convertible warrants

Each warrant can later be converted into one equity share of Rs 1 face value, at Rs 126 per share.
Moneycontrol News
August 22, 2026 / 11:58 IST
Zee Entertainment

Zee Entertainment Enterprises Limited (ZEEL) has allotted 20,94,47,805 fully convertible warrants to Sunbright Mauritius Investments Limited, a promoter-group entity, at Rs 126 per warrant. The allotment was made on August 21, 2026, after approvals from the shareholders and the stock exchanges, and following a favourable order from the Securities Appellate Tribunal (SAT).

Each warrant can later be converted into one equity share of Rs 1 face value, at Rs 126 per share. So far, Sunbright has paid 25% of the price upfront — Rs 31.50 per warrant, totalling about Rs 659.76 crore. The remaining 75%, or Rs 94.50 per warrant, must be paid within 18 months of allotment i.e. by February 21, 2028 for the warrants to convert into shares. Until that payment is made, ZEEL’s paid-up share capital stays unchanged.

If all warrants are eventually converted, Sunbright’s shareholding in ZEEL would rise to approximately 17.90% on a fully diluted basis, marking a notable increase in promoter-group ownership through this preferential issue.

In a major relief for Zee Entertainment Enterprises Ltd, the SAT last week allowed the company to raise funds through preferential warrants from its promoter group. The tribunal also permitted ZEEL to access its mutual fund investments to meet operational expenses.

Additionally, SAT granted the company an extra week to complete the preferential allotment process.

Member technical of the tribunal Meera Swarup read out the order on behalf of the bench. “Appellant company and Goenka are permitted to complete the process of issue of fully convertible warrants with the promoter group entity on a preferential basis subject to deposit of full penalty within one week by both the appellants,” she said.

Swarup added that the deadline for issuing the warrants, which was due to expire on August 14, would be extended by one week from the date of the order. The bench also allowed the appellant companies to use their mutual fund investments to meet day-to-day requirements in the ordinary course of business. However, the funds cannot be used for any other purpose, including payment of the proposed dividend.

What was the SEBI order?

The Securities and Exchange Board of India’s (SEBI) July 31, 2026 order relates to the alleged unauthorised pledge of an immovable property owned by Zee Entertainment Enterprises Ltd (ZEEL). According to the regulator, a land parcel belonging to ZEEL in Hyderabad was used as security for loans raised by entities linked to the company’s promoters, without obtaining the necessary corporate approvals or making the required disclosures. The matter came to light after title deeds of ZEEL’s properties were found to be missing.

According to SEBI order, the company’s property was effectively deployed for the benefit of entities connected with major shareholders, while the arrangement was not adequately disclosed to ZEEL’s board, audit committee, shareholders or investors. The regulator treated the conduct as violations of securities laws and corporate-governance requirements.

Moneycontrol News
first published: Aug 22, 2026 11:58 am

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