Zee Entertainment shares crash 14% following NCLT order on Subhash Chandra's debt

Shares of Zee Entertainment Enterprises crashed over 14% on Monday, extending a 17% fall in four sessions after the NCLT approved a 99.97% haircut on founder Subhash Chandra’s creditor claims.

Zee shares crashed to Rs 86.90 apiece on NSE on Monday, the lowest level seen by the stock since May this year. The stock is on track to record the sharpest single-day plunge in nearly a month.

This comes after Canara Bank, Union Bank of India and LIC Housing Finance on Saturday said they will challenge the National Company Law Tribunal's (NCLT) order approving a repayment plan proposed by Essel Group founder Subhash Chandra.

NCLT's approval of a repayment plan under which Essel Group chairman Subhash Chandra will pay around Rs 6.5 crore against admitted creditor claims of Rs 22,006.57 crore has sparked a debate over the 99.97% haircut.

The case, however, does not involve a resolution of corporate borrowings by Essel Group companies, nor does it involve a finding that Subhash Chandra personally borrowed Rs 22,000 crore.

The order is related to the personal insolvency resolution process of Subhash Chandra in his capacity as a personal guarantor to debts owed by various Essel Group entities and related companies.

When the matter went to a vote, creditors holding around 80.81% voting share supported the plan. The other creditors, including HDFC and LIC Housing Finance, did not. Since the Insolvency and Bankruptcy Code requires approval by a prescribed supermajority, the plan cleared the voting threshold and was subsequently presented before the NCLT for approval. The NCLT ultimately approved the resolution plan, resulting in a recovery of roughly Rs 6.5 crore against admitted claims exceeding Rs 22,000 crore.

Earlier this month, Zee Entertainment raised an initial Rs 660 crore by allotting 20.94 crore fully convertible warrants to promoter group entity Sunbright Mauritius Investments at Rs 126 apiece. The exercise was undertaken by the company’s preferential issue and allotment committee, following approvals from the board, shareholders, stock exchanges and the Securities Appellate Tribunal (SAT).

Terming it a positive development for the stock, Abneesh Roy, executive director, research at Nuvama Institutional Equities, said it cleared the prolonged fundraise overhang due to the regulatory proceedings. He also noted that the allotment was smaller than the size approved by shareholders.

Roy said ZEEL had received Rs 660 crore upfront, while the remaining about Rs 1,980 crore would be payable only upon conversion. Since conversion can take place in one or more tranches over 18 months, the balance capital could come in by February 2028.

Zee Entertainment shares have fallen around 20% in the past month, while the stock is up around 2% so far in 2026. Over the past year, the stock has declined 21%.

In the longer term, Zee Entertainment shares have fallen around 65% in three years and more than 46% in five years.