Mutual funds pare holdings in Zee Ent by 40% post Sony merger deal fallout

Shares held by active MF schemes decline 40% to 173 million

Mutual funds (MFs) pared their holdings in Zee Entertainment by 40 per cent in January after the planned $10 billion merger with the Sony Group Corp got called off. At the end of January, 67 active MF schemes were hold­ing 173 million 

shares, valued at nearly Rs 3,000 crore. At the end of December 2023, 102 schemes were holding 243 million shares.

The stock went into a free fall, declining 37 per cent in January, after about a dozen brokerages reduced their ratings on Zee and derated the stock. Shares of Zee are down nearly 5 per cent so far this month. Mahindra Manulife, PPFAS and ITI, which had small holdings in Zee as of December, exited the stock completely in January.

According to the latest MF portfolios, HDFC, ICICI Prudential and Nippon had the highest exposure to Zee Entertainment among fund houses, shows data from Prime Database. Nippon MF had sold half of its holding in January. During the three-month period ended December 2023 shareholding data, the MF holding in the broadcaster rose by 2.4 percentage points (ppts) to 32.5 per cent and retail shareholding rose 1.38 ppts to 12.41 per cent. 
 

Meanwhile, foreign portfolio investors (FPIs) cut their stake in Zee Entertainment Enterprises by over 6 ppts to 28.2 per cent during the three-month period. The churn seen in January will reflect in the March quarter shareholding data, which will be released in April.