The stock opened at Rs 209 – down the maximum 10% slide possible during initial trades – and lost value through the session to hit an intra-day low of Rs 153. It closed at the same level.
In effect, in just one session, Zee’s shareholders together lost a third of the value of their shares. From a market capitalisation of about Rs 22,560 crore on Saturday, the media major is now worth Rs 14,974 crore now.
Foreign broking major CLSA said it was downgrading Zee from ‘buy’ rating to ‘sell’ as the merger was called off after it got regulatory and shareholders’ nod. Competition in the broadcasting sector (where Reliance Industries inked a deal to merge Disney’s India properties with itself), corporate governance issues and low promoter holding (down to 4% from 41% five years ago) are some challenges flagged by the CLSA report. It has put a price target of Rs 198 for Zee.
Another report by domestic broking house Nuvama pointed out that Zee’s near-term valuation shall stay suppressed due to “Sony seeking a termination fee, uncertainty with respect to Zee’s new strategy and partners, and action of its minority stakeholders”. Nuvama has downgraded the stock to ‘reduce’ with the target price at Rs 190, the same as CLSA.