SAT Allows Zee to Proceed With Rs 3,143 Crore Preferential Warrant Issue

Tribunal Grants Interim Relief, Extends Timeline By One Week Subject To Penalty Payment

The Securities Appellate Tribunal (SAT) has granted interim relief to Zee Entertainment Enterprises Ltd (ZEEL), allowing the media company to proceed with its proposed Rs 3,143 crore preferential warrant issue despite the recent restrictions imposed by the Securities and Exchange Board of India (SEBI).

The order provides temporary relief to Zee and its Chief Executive Officer Punit Goenka, who had challenged SEBI’s July 31 order restraining them from accessing the securities market for two months. The regulatory action had put the company’s fundraising plans on hold, prompting Zee to approach the appellate tribunal.

SAT Allows Fundraising To Continue

During the hearing on Friday, SAT permitted Zee to complete the issuance of fully convertible warrants to a promoter group entity through a preferential allotment.

However, the tribunal made the relief conditional.

According to the oral order, both Zee Entertainment and Punit Goenka must deposit the full penalty amount within one week to avail the interim relief.

The tribunal stated:

“Appellant company and Goenka are permitted to complete the issuance of fully convertible warrants to the promoter group entity on a preferential basis, subject to deposit of full penalty within one week.”

The order enables the company to continue with its capital-raising exercise while the broader legal challenge against SEBI’s order remains pending.

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Timeline Extended By One Week

The tribunal also granted Zee additional time to complete the preferential warrant issuance.

Under the original schedule, the company had a 14-day window, which was due to expire on August 14.

SAT has now extended the deadline by one week, giving the company additional time to complete the transaction after fulfilling the penalty payment condition.

SEBI Order Had Halted Fundraising

The dispute stems from SEBI’s order issued on July 31, which barred Zee Entertainment and CEO Punit Goenka from accessing the securities market for two months.

The restriction directly impacted Zee’s proposed preferential warrant issue, delaying one of the company’s key fundraising initiatives.

To challenge the regulator’s decision, Zee and Goenka filed an appeal before the Securities Appellate Tribunal seeking interim relief.

With SAT’s latest order, the company has received temporary permission to proceed with the fundraising despite the regulatory restrictions.

Rs 3,143 Crore Fundraise

The preferential warrant issue is valued at approximately Rs 3,143 crore and involves the issuance of fully convertible warrants to a promoter group entity.

Preferential warrant issues are commonly used by listed companies to raise growth capital while strengthening promoter shareholding, subject to shareholder and regulatory approvals.

For Zee, the successful completion of the issue would provide additional financial flexibility while its legal proceedings with SEBI continue.

The tribunal’s order does not set aside SEBI’s action but grants interim relief limited to the completion of the warrant issuance, provided the stipulated conditions are met.