Invesco sells 7.74% stake in Zee Entertainment for Rs 2,092 crore

Puts 74.32 million shares on the block at Rs 281.46 apiece; Morgan Stanley, Segantii India among buyers

Invesco Oppenheimer Developing Markets Fund on Thursday sold 7.74 per cent stake in Zee Entertainment Enterprises (Zee) for Rs 2,092 crore. It sold about 74.32 million shares at Rs 281.46 apiece, showed data provided by stock exchanges. Morgan Stanley Asia bought 10.2 million shares for Rs 287 crore, while Segantii India bought 9.9 million shares for Rs 278, data showed.

Shares of Zee declined 2.1 per cent to end at Rs 285.

Invesco had said in a statement on Wednesday had said the purpose of the sale was to align its three funds’ exposure to Zee with other funds and to achieve an aggregate ownership position in the company that is more in line with the investment team’s portfolio construction approach.

Following the stake sale, Invesco is left with about 11 per cent stake in Zee.

In December 2021, Sony Pictures signed a definitive agreement to merge with Zee. Sony will hold a majority stake in the merged entity. The deal is currently awaiting Competition Commission of India’s approval.

“We believe that the merger would help the combined entity to emerge as a strong player in the entertainment industry for capturing the large opportunity in both domestic and international markets. The stock currently trades at a reasonable valuation at 18x/16x of FY2023E/FY2024E earnings. Any volatility in the stock price, we advise investors to use as an opportunity to invest in this stock for the long-term perspective. We have a buy rating on Zee with a price target of Rs 400,” said Sanjeev Hota, Head of Research, Sharekhan by BNP Paribas.