India’s Zee fundraising fails as shareholders block founding family from raising stake

Zee Entertainment Enterprises on Thursday failed to secure the required shareholder votes to raise funds by issuing warrants, blocking plans by the founding Goenka family to increase their stake in the broadcaster.

The setback comes after the company aggressively cut costs and focused on improving performance in its core businesses following a failed merger with Sony Group Corp’s India assets.

Only 59.5% of shareholders who participated in the voting supported the resolution, falling short of the 75% majority required for approval, Zee said in a stock exchange filing late Thursday.

“While the efforts being taken have augured well for the company, in order to further safeguard it from a future growth perspective, it is important to keep a sufficient war chest,” Zee said in a statement, citing a rapidly shifting market and fierce industry competition.

India’s Zee plunges 30% as investors, analysts bail after failed Sony merger

Proxy advisory firms InGovern and Institutional Investor Advisory Services recommended Zee shareholders vote against the proposal, which sought to raise the Goenka family’s stake to 18.39% from 3.99%, citing concerns about share dilution and the use of warrants as a fundraising tool.

The motion sought to issue 169.5 million preferential warrants worth 22.37 billion rupees ($260.9 million) to Altilis Technologies and Sunbright Mauritius Investments, entities linked to the founding family, as part of a capital infusion to fund growth plans.

Public investors hold 96% of Zee’s shares, with nearly 39% held by domestic and foreign institutions including HDFC Mutual Fund, Life Insurance Corp of India, and Norway’s Government Pension Fund Global.

Zee’s shareholders had previously blocked key board decisions, including CEO Punit Goenka’s reappointment as director in November 2024.