Zee Entertainment Enterprises shares in focus today; here's why

Shares of Zee Entertainment Enterprises (ZEEL) are in focus on Friday morning after the Securities and Exchange Board of India (SEBI) while dismissing settlement applications submitted by the company and CEO Punit Goenka, ordered additional investigation into the violation of provisions of its regulations.

SEBI said the allegations in the show cause notice (SCN) dated July 6, 2022 issued by Adjudicating Officer (AO) will be subsumed with the findings of the further investigation carried out by SEBI in the instant matter. Accordingly, the content of the SCN dated July 6, 2022 issued by the AO including the examination report and all the relied upon documents will be treated as integral part of the further investigation report by SEBI in the matter of ZEEL.

"The contents of the SCN dated July 6, 2022 issued by AO to Noticees will also be incorporated in the SCN to be issued in the instant matter. The instant AO proceedings would be dropped against the Noticees," SEBI said.

SEBI had in July 2022 issued a SCN to Zee Entertainment Enterprises Ltd, Subhash Chandra and Punit Goenka to know why an inquiry should not be held against ZEEL in terms of Rule 4 of the Adjudication Rules, 2005 r/w Section 23-I of the SCRA, and why penalty should not be imposed in terms of Section 23E of the SCRA against Noticee ZEEL and why an inquiry should not be held against Subhash Chandra and Punit Goenka in terms of Rule 4 of the Adjudication Rules, 1995 r/w Section 15-I of the SEBI Act, 1992.It also asked why a penalty should not be imposed in terms of Section 15HB of the SEBI Act, 1992.

ZEEL shares are down 10 per cent in the past one month and 18 per cent in the past six months.

Shareholders of ZEEL had in its 42nd Annual General Meeting on November 28, 2024 rejected a proposal for the reappointment of Punit Goenka as a Director. Goenka, who was Managing Director (MD) and Chief Executive Officer (CEO) at ZEEL, had earlier decided to step down from the MD role and focus entirely on his responsibilities as CEO.

Ahead of Q3 results, Elara Securities expects ZEEL to report Ebitda margin of 14.5 per cent for the quarter, down 165 basis points QoQ due to increased investments in content, given its focus on growth post the recent cost restructuring.

"But margin performance may remain largely on track. QoQ, loss in Zee5 may remain stable," it said.