Zee Entertainment to be Reinstated in Futures and Options (F&O) Segment

The National Stock Exchange has withdrawn the circular that excluded Zee Entertainment Enterprises from the futures and options segment, after the company obtained interim relief from the National Company Law Appellate Tribunal (NCLAT) regarding the bankruptcy proceedings.

On Monday, NSE announced that the circular, which was dated February 23 and related to the exclusion of F&O contracts on Zee, has been withdrawn.

This action followed the National Company Law Tribunal's order, which admitted an insolvency plea filed by IndusInd Bank, one of the lenders of the ZEE group, against the company and its subsidiary, Siti Networks.

NSE's move comes after the National Company Law Appellate Tribunal (NCLAT) decided to put a stay on the National Company Law Tribunal (NCLT) order admitting insolvency proceedings against ZEEL.

At 09:24 AM, ZEEL was quoted 4.4 per cent higher at Rs 191.05 compared to a 0.06 per cent rise in the Nifty 50. A combined 3.8 million shares changed hands at the counter on the NSE and BSE.

The stock of TV broadcasting and software production had dipped 15 per cent in the past six trading days between February 17 and February 27 after the NCLT admitted an insolvency petition filed against ZEEL by IndusInd Bank last week.

However, on February 24, 2023, the NCLAT Principal Bench in New Delhi granted a stay on the NCLT Mumbai Bench Court III order dated February 22, 2023, regarding the IBC proceedings initiated against ZEEL. 

As a result of the NCLAT order, ZEEL will be able to move out of the IBC framework, and the surveillance action in the stock will be reversed. 

NSE has also announced that futures and options contracts with a maturity date of May 2024 will be available on Zee Entertainment.

In response to the admission of insolvency proceedings by the NCLT, the stock price of ZEEL had dropped due to the ongoing arbitration issue, which could further delay the merger timeline with Sony Pictures Networks India Private Limited (SPNI). 

Prabhudas Lilladher stated that unless ZEEL settles the dispute amicably or obtains a stay on the order, the merger timeline could be further delayed after the NCLT order on February 23.