Zee Entertainment: New entity will be India’s largest media company

As per Punit Goenka, MD & CEO of ZEEL, the merger of ZEE and Sony Pictures Networks India (SPN) is within the last levels of sewing up.

The merger of ZEE and Sony is within the last levels. In the final week of September, ZEE had introduced an unique interval of 90 days for mutual diligence. The new entity will be India’s largest media company with management in nearly each style and language throughout India. The $1.57-billion capital infusion will enable it to compete with international giants in OTT, other than investing in premium content material, together with sports activities. This growth occurred at a time when TV advert volumes had been larger by 11% YoY and 23% on a two-year foundation with 22% new advertisers. Ad volumes had been highest for the FMCG sector, whereas e-commerce and BFSI recorded progress of 97% and 98%, respectively, on a two-year foundation. We proceed to observe authorized and regulatory points.

Rising confidence on merger with ZEE: As per Punit Goenka, MD & CEO of ZEEL, the merger of ZEE and Sony Pictures Networks India (SPN) is within the last levels of sewing up. The merged entity will additionally give attention to sports activities. The rising digital panorama has opened up new alternatives in sports activities for monetisation. Although ZEE has been late in embracing new know-how, it will now catch up in a short time with international gamers. Indian SVOD market will develop to 200million over the following 5 years. ZEE5 has 40–50million subscribers and round 300million month-to-month views. We will nonetheless monitor how the 2 OTT platforms would be merged and the way their content material overlap would be tackled.

October knowledge reiterate TV adverts to coexist with digital: Ad volumes on tv for October stood at 178 million seconds, highest for 2021 and better by 11% YoY. There had been 4,624 manufacturers and a complete of two,851 advertisers within the month, with 22% being new advertisers, as per BARC. Ad volumes for the Dussehra week grew by 13% over the earlier 4 weeks and by 25% over 2019. While advert volumes had been the very best for FMCG, the e-commerce and BFSI segments additionally recorded progress of 97% and 98%, respectively, in opposition to October 2019.

Outlook and valuation: Positive growth; preserve ‘buy’. The new entity would be the largest participant within the trade and fills within the gaps in ZEEL’s portfolio. This additionally comes at a time when advert volumes are seeing recovery. October volumes had been up 11% YoY and up 23% on a two-year foundation. The reviving demand has led to FMCG, e-commerce, retail and banking corporations coming again to media spends. Retail and personal equipment advert volumes grew 127% and 157%, respectively, over the beginning of January 2021. With advert revenues on monitor for quick recovery and a a lot stronger and wider content material portfolio coming forth after the merger, the merged entity is all set to seize a serious foothold and obtain robust advert spends from industries as it could have a a lot wider attain. The merged entity would even have a reliable and skilled board that is aware of the business effectively. In our view, the deal is a win-win for shareholders, minority shareholders and promoters.

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