Shares of ZEE Entertainment Enterprises Ltd (ZEEL) bounced back on Monday after the business conglomerate Essel Group’s management arrived at an understanding with lenders which are holding pledged shares of the promoters.

The share price of ZEE Entertainment, the flagship company of the Essel Group, rose 19.24% to Rs 380.80 intra-day before closing at Rs 372.50, up 16.64%, on Monday. Dish TV India rose 9.95% to Rs 24.85 before closing the session 5.53% up at Rs 23.85 a share. 

Shares of Essel Propack, another group firm, closed 9.43% up at Rs 107.35 per scrip. It touched an intra-day high of 12.94% at Rs 100.80.

The broader market ended in red with BSE Sensex plunging over 368 points to close at 35657 amid volatile market sentiment days ahead of the Union Budget.  

The Essel Group stocks saw a sharp drop on Friday after a news report mentioned alleged links between the group and Nityank Infrapower and Multiventures, a company under the scrutiny of the Serious Fraud Investigation Office for questionable deposits during or after demonetisation.

Both ZEEL and Dish TV have reassured that they have had no dealings whatsoever with any of the two companies.

Edelweiss Securities Ltd, in its report said the recent developments have solidified probability of stake sale in ZEE and it did not expect it to be a distressed sale.  “ZEE Entertainment Enterprises’s stock price reacted negatively largely due to bad press, leverage at promoter entity and high pledging across the group’s entities. With this reaction from the market, the deal talks are likely to be impacted.” 

“While the non-business issues should stabilise, given the management’s meeting with lenders, we see the stake sale getting precipitated,” the Edelweiss Securities report said.

Elara Capital in its report said, “We are still in favour of promoters selling partial stake and staying back with the partner, as no other promoter group may be able to replicate ZEE’s success in regional genres with good profitability.”

The brokerage expects price performance to remain with a positive bias in anticipation of an open offer for a stake sale.

RISING AGAIN

• Dish TV India closed the session 5.53% up at Rs 23.85 a share  
• Shares of Essel Propack closed 9.43% at Rs 107.35 apiece