ZEE may get rerated on merger with Sony: CLSA

Mumbai: Brokerage CLSA said Zee Entertainment Enterprises' (ZEE) potential merger with Sony could be a rerating catalyst.

Reiterating a buy rating with a target price of ₹415, CLSA said that if the deal is sealed, ZEE's valuation is likely to return to historical highs of 30 times. Zee Entertainment's shares ended down 0.8% at ₹367.45 on Wednesday.

CLSA said that Sony would have 51% ownership after the merger and would be able to appoint majority of directors.


The merged company would be bigger than sector leader Star India with a 33% market share in India TV viewership and its revenue in the 2023-24 financial year could touch $2.5 billion, said the brokerage. The likely profits could jump 2.5 times to $680 million, it said.

CLSA said ZEE's proposed merger with Sony India requires several approvals including regulatory nod and also of 75% of ZEE's shareholders.

"ZEE is still in litigation with a large minority shareholder, which carries associated risks," said the brokerage.