Zee stock plunges 13% over Rs 522 cr investment in tech subsidiary

Zee Entertainment (ZEE) fell nearly 13 per cent in intra-day trade on Monday to Rs 129.75 per share after the media major said it had invested Rs 522 crore in tech subsidiary Margo Networks, which offers streaming and advertising services under the ‘SugarBox’ brand name. ZEE owns 80 per cent stake in Margo and the additional investment will be used for operational and financial support.

The stock ended the day at Rs 137 on the BSE, down 8.57 per cent. But investors remained nervous about the fund infusion despite the company management saying it would boost its digital business.

“Our investment in SugarBox gives a strong fillip to our overall digital business, sharpening its approach by many folds. The unique technology will enable us to serve content to consumers across the nation, without being restricted by connectivity constraints,” Punit Goenka (pictured), managing director and chief executive officer, Zee Entertainment, said.

SugarBox basically enables internet services to work in areas of bad or no network, helping users access them without an active data connection. It creates a hyperlocal data distribution ecosystem by installing servers at key places of interest (POIs), which users can connect to over a local wifi network.

In a stock exchange filing on Friday, Zee had said it had authorised SugarBox to finalise the terms of a 10-year contract with RailTel Corporation of India for Internet services.