Essel Group shares trade weak; Zee Ent, Zee Media, Dish TV down 10%

Shares of Subhash Chandra-led Essel Group companies were under pressure on Wednesday with Zee Entertainment Enterprises (ZEE), Dish TV India and ZEE Media Corporation falling by up to 11 per cent on the BSE on the back of heavy volumes.

Zee Media Corporation plunged 11 per cent to Rs 12.88 after the company reported a consolidated net loss of Rs 86.66 crore, due to one-time loss of Rs 103 crore in March quarter (Q4FY19). It had posted profit of Rs 4.48 crore in the year-ago quarter.

The company’s Q4 operational revenue slipped 4 per cent at Rs 169 crore, against Rs 176 crore in the corresponding quarter of previous fiscal.

Zee Media said the revenue decline was due to holdback of spends by advertisers across the industry in the first half of the quarter in view of the TRAI's New Tariff Order implementation. However, the company managed to cover up significantly during the rest of the quarter, it said.

The company's investment of Rs 436 crore in 4,363 million- 6 per cent non-cumulative non-convertible redeemable preference shares of Re. 1 each of Diligent Media Corporation Limited (DMCL) redeemable at par on 01 November, 2036, was tested for impairment as per IndAS 109 - "Financial Instruments" as at 31 March, 2019.

Based on the valuation carried out by an independent valuer, an amount of Rs 103 crore has been provided towards impairment in the value of Company's investment in DMCL and recognised during the quarter / year ended 31 March, 2019 and shown as exceptional items, Zee Media said in a note. While the management expects timely redemption by DMCL, the note said.

ZEE shares have tumbled 10 per cent to Rs 310, falling 28 per cent thus far in the month of May. In comparison, the S&P BSE Sensex dipped 4 per cent during the period. The fall in stock price comes despite the group's assurance that the stake sale process of Zee Entertainment Enterprises was at an "advanced stage."

The trading volumes on the counter jumped 1.5 times with a combined 25.6 million shares representing 2.6 per cent of total equity changed hands on the NSE and BSE at 12:27 pm.

On May 8, 2019, Catalyst Trusteeship had sold 8.6 million shares or 0.89 per cent stake worth of Rs 294 crore of ZEE via open market. Catalyst Trusteeship sold the stake at a price of Rs 342.33 per share, the bulk deal data shows.

ZEE, on May 7, said the company's board of directors will meet on May 27 to approve the audited financial results for the fourth quarter and financial year ended March 31, 2019.

The stock of Dish TV India too slipped 10 per cent to Rs 27.90 on the BSE in intra-day trade, down 23 per cent thus far in the current month. The company's board of directors is scheduled to meet on May 24 to consider Q4FY19 results.