“A Study of Zee Entertainment Enterprises and Sony Pictures

Entertainment merger”

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

Master of Management Studies
(University of Mumbai)

2022-2024 Batch

Chirag Prashant Kudchadkar

Roll Number: C24

SUBMITTED TO:

DR. V. N. BEDEKAR INSTITUTE OF MANAGEMENT STUDIES, THANE

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 DECLARATION BY THE CANDIDATE

This is to certify project report entitled “A Study of Zee Entertainment Enterprises and Sony
Pictures Entertainment merger” which is submitted by me in partial fulfillment of the requirement
for the award of Master of Management Studies, (University of Mumbai) Dr. V.N. Bedekar Institute of
Management Studies, comprises of my original work and due acknowledgment has been made in the
text to all other material used.

Wherever references have been made to intellectual properties of any individual / Institution /
Government / Private / Public Bodies / Universities, research paper, text books, reference books,
research monographs, archives of newspapers, corporate, individuals, business / Government and any
other source of intellectual properties viz., speeches, quotations, conference proceedings, extracts from
the website, working paper, seminal work et al,they have been clearly indicated, duly acknowledged
and included in the Bibliography.

____________________________________
Date & Signature of Candidate

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 CERTIFICATE BY THE GUIDE

This is to certify that project report entitled “A Study of Zee Entertainment Enterprises and Sony
Pictures Entertainment merger” which is submitted by Chirag Prashant Kudchadkar in partial
fulfillment of the requirement for the award of Master of Management Studies,(University of Mumbai)
Dr. V.N. Bedekar Institute of Management Studies, is a record of the candidate's own work carried out
by him under my guidance. The matter embodied in this report is original and due acknowledgment has
been made in the text to all other material used.

Authorized Signatory:
Date:

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4
 ACKNOWLEDGEMENT

I would like to express my gratitude to my project mentor Prof. Siddhesh Soman

sir for his valuable guidance, whole-hearted co-operation and generous helping
hand in carrying out this research project.

With a deep sense of gratitude, I would also like to thank my family and friends
who have contributed in one way or another for the successful completion of my
project.

I am also thankful to Dr.V.N.Bedekar Institute of Management Studies for

providing me this opportunity to work on the research project in the area of my
interest which eventually added value to my knowledge.

I am sincerely thankful to one and all who have played an active role in the
successful completion of this project.

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 Table of contents

Contents
Chapter 1………………………………………………………………………………………………..8

Executive Summary…………………………………………………………………………………….8

Chapter 2………………………………………………………………………………………………..9

Industry Analysis……………………………………………………………………………………….9

2.1 Size of the Indian Broking industry……………………………………………………………….13

2.2 Major players in the Broking industry…………………………………………………………….14

2.3 Market share of major players……………………………………………………….....................15

2.4 Broking industry Financials……………………………………………………………………….15

2.5 Challenges faced by the broking industry…………………………………………………………15

Chapter 3………………………………………………………………………………………………18

About the company……………………………………………………………………………………18

3.1 The genesis of the company and its vision and mission…………………………………………..18

3.2 Product and services………………………………………………………………………………18

3.3 Position in the Industry……………………………………………………………………………19

3.4 Stakeholders detail………………………………………………………………………………...19

3.5 Locational and operational detail………………………………………………………………….19

3.6 Challenges faced by the company…………………………………………………………………20

3.7 SWOT Analysis of the company…………………………………………………………………..21

Chapter 4………………………………………………………………………………………………23

On the job training…………………………………………………………………………………….23

4.1 Key result areas……………………………………………………………………………………23

4.2 Work Responsibilities Assigned…………………………………………………………………...23

4.3 Technical/Managerial skills gained………………………………………………………………..23

Chapter 5………………………………………………………………………………………………24

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Literature review………………………………………………………………………………………24

Chapter 6………………………………………………………………………………………………31

Data Analysis…………………………………………………………………………………………..31

A. Introduction to Mergers and Acquisitions……………………………………………………..31

B. Industry Analysis- Indian Media And Entertainment Industry………………………………..33
C. Major players in the Media and Entertainment Industry………………………………………34
D. Actual case of Mergers………………………………………………………………………...37
E. Financials of Zee Entertainment Enterprises Limited…………………………………………47

Chapter 7………………………………………………………………………………………………51

References……………………………………………………………………………………………..51

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 Chapter 1

1. Executive Summary

As a partial fulfillment of my MMS curriculum, I have completed a two-month

summer internship at “AngelOne Limited”. My summer training project was
conducted from the 4th of May to the 15th of June in the year 2023.

Established on the 8th of August, 1996, Angel Broking emerged as a private limited
company. Subsequently, in September 1997, Angel Broking was established as a
provider of wealth management, retail, and corporate broking services. Angel
Capital and Debt Market Ltd. was officially recognized as a legal entity and
became a member of the National Stock Exchange in November 1998.

The initial aspect encompasses a platform wherein investors may congregate and
vend their shares based on the two primary Indian stock exchanges, namely the
BSE and NSE, or the Bombay Stock Exchange and the National Stock Exchange.
The enterprise offers a diverse array of online trading applications, as well as a
range of services including online stock brokerage, depository services, commodity
trading and investment, advisory services, portfolio management, life insurance,
health insurance, and so forth. In regard to the first angle, there exists a lack of
brokerage charges for equity delivery, while other trades such as intraday, future,
options, currency, and commodity are subject to brokerage fees.

I was assigned to the finance department where I acquired a plethora of knowledge

that has afforded me a lucid comprehension of the stock market and its perpetual
growth. Furthermore, I gained an understanding of the foundational principles and
technical analysis involved in this domain. The organization I interned at primarily
focused on topics pertaining to stock market, specifically exploring the advantages
of investing in IPO and engaging in intraday trading. Through this experience, I
also delved into the study of charts and candlestick patterns, which provided me
with a comprehensive understanding of share pricing. It is important to note that
share pricing is contingent upon the economic concept of supply and demand;
when buyers outnumber sellers, prices rise.If the number of buyers is low and the
number of sellers is high, the price will decrease.

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 Chapter 2

2. Brokerage Industry Analysis

Introduction to Indian stock broking industry

Indian stock broking industry offers a variety of financial services to clients and based on the services
provided, there are two main types of brokers for stock market: Full-Service Brokerage firms and
Discount Brokerage houses. Full-Service Brokerage firms offer a wide range of services such as trading
facilities in stocks, commodities and currencies, advisory, research, asset management and retirement
planning services, while discount brokerage firms just provide the trading facility services at low and
fixed brokerage fees. They do not offer advisory services and generally use online platforms to offer
services.

In recent years, Indian capital market’s growth has been phenomenal which is reflected in increase in
market cap, turnover, number of participants, product range etc. and rising retail participation in equity
trading and growth across the segments like broking, and wealth management has contributed the most
growth in the broking industry.

Trading Statistics of Stock Exchanges

There were 248 trading days available in 2021-22, while the total number of shares traded at BSE was 16,222
crore in 2021-22 as against 10,456 crore in 2020-21. At NSE, 76,103 crore shares traded during 2021-22 as
compared to 74,296 crore in 2020-21. Besides, cash segment turnover of BSE increased to 13.4 lakh crore in
2021-22 from Rs 10.5 lakh crore in 2020-21, while NSE’s turnover in the cash segment increased to 166 lakh
core in 2021-22 from Rs 154 lakh crore in 2020-21.

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Market capitalization of BSE & NSE
At the end of 2021-22, total market capitalization at BSE increased to Rs 264.1 lakh crore as against
Rs 204.3 lakh crore in 2020-21, while total market capitalization of NSE surged to Rs 261.8 lakh crore
at the end of 2021-22 from 203 lakh crore in 2020-21. While the number of companies listed at BSE
increased to 5,618 at the end of March 2022 from 5,478 at the end of March 2021, the number of
companies listed at NSE also surged to 2,065 at the end of March 2022 as against 1,968 at the end of
March 2021.

Registration of stock brokers

During 2020-21, the cash segment witnessed higher cancellation or surrender of memberships than
fresh additions across the exchanges. Though, the fresh membership were granted to 17 stock brokers
in the cash segment of BSE and 18 stock brokers in the cash segment of NSE, 52 stock brokers at BSE
and 64 stock brokers at NSE lost their membership either on account of cancellation or surrender. At
the end of March 2021, the total number of registered brokers in the cash segment of BSE and NSE
stood at 1,308 and 1,243 respectively, marginally lower than 1,343 and 1,289 stock brokers respectively
at the end of previous year.

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Number of client accounts active
The participation of investors in the Indian stock markets is increasing with the growing knowledge
about investing and about different asset classes. As per the National Securities Depository (NSDL),
number of client accounts active increased 1.51% to 2,88,59,974 as on August 31, 2022 as against
2,84,31,846 accounts as on July 31, 2022, an addition of 4,28,128 accounts.

Out of total, active accounts of resident clients was higher by 1.52% to 2,81,15,364 as on August 31,
2022 compared to 2,76,93,068 accounts as on July 31, 2022, an addition of 4,22,296 accounts. Besides,
active accounts of NRI clients also rose 1.24% to 3,87,825 as on August 31, 2022 as against 3,83,081
accounts as on July 31, 2022. However, active accounts of Bank clients decreased marginally to 4,941
as on August 31, 2022 as compared to 4,954 as on July 31, 2022.

Besides, as per the NSDL, FPI client accounts active stood at 11,323 as on August 31, 2022, higher by
0.01% as compared to 11,240 as on July 31, 2022, while active accounts of HUF clients surged to
2,06,249 as on August 31, 2022 as against 2,05,668 active accounts as on July 31, 2022.

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Reforms and initiatives

Maintenance of current accounts in multiple banks by stock brokers

In order to facilitate seamless settlement of funds and for the convenience of investors, the Securities
and Exchange Board of India (SEBI) clarified that stock brokers should maintain current accounts in
appropriate number of banks for holding the client funds (i.e., client account), for settlement purposes
(i.e., settlement account) and any other accounts mandated by stock exchanges such as exchange dues
account subject to the condition that brokers are using these accounts for their defined purposes. The
clarification comes after SEBI received representations regarding the issue being faced by stock
brokers. They requested the regulator to issue instructions in respect of maintenance of current accounts
in multiple banks.

Execution of Power of Attorney by the Client in favor of the Stock Broker / Stock
Broker and Depository Participant
To protect the interest of investors by discouraging the use of power of attorney (PoA) in the securities
market and to mitigate any chances of fraud by the brokers, vide circular dated August 27, 2020, it was
specified that PoA is optional and PoA which is executed in favour of stock broker / stock broker
depository participant by the client needs to be utilized for transfer of securities held in beneficial
owner accounts, deliveries/settlement obligations, pledging/re-pledging etc.

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Sebi issues guidelines for brokers providing algorithmic trading services
SEBI came out with guidelines for stock brokers, who provide services relating to algorithmic trading
to investors, in order to prevent instances of mis-selling. The guidelines came after the Securities and
Exchange Board of India (Sebi) observed that certain stock brokers provide algorithmic trading
facilities to investors through unregulated platforms.

The unregulated platforms are offering algorithmic trading services or strategies to investors for
automated execution of trades.

SEBI updates cyber security framework for stock brokers

The SEBI unveiled modifications in cyber security and cyber resilience framework for stock brokers
and depository players as part of its investor safeguard mechanism. As per the Sebi’s circular, stock
brokers and depository participants must notify the stock exchanges or depositories as well as SEBI of
any cyberattacks, threats or breaches within six hours of them becoming aware of the incident or it
being brought to their notice.

The incidents must also be reported to the Indian computer emergency response team (CERT-In) with
accordance to the rules or directions that are issued by CERT- In. Additionally, the National Critical
Information Infrastructure Protection Centre (NCIIPC) requires stockbrokers, and/or depository
participants with systems designated as ‘Protected Systems’ to report such incidents.

Outlook
Indian stock broking industry is likely to witness growth with increasing participation of investors and
rising financial literacy across the country. The industry will continue to innovate and adopt technology
in products and services, which will deliver a superior customer experience, strengthen business
processes of the industry and help to deeper market penetration. The growing penetration of internet
and smartphone will also help the sector to expand its customer base.

The growth of the industry will be supported by favourable liquidity in both domestic and international
markets and better-than-expected corporate earnings. Client addition for the broking firms is expected
to remain healthy, amid increased interest among various investor groups along with attraction towards
flat brokerage plans. With increasing number of clients opting to conduct transactions online, the
broking industry players will consolidate their networks and prefer to have fewer branches.

2.1. Size of the Indian broking industry

India's security brokerage market is expected to register a CAGR greater than 8% during the forecast
period. Before the emergence of new startups in India, only large banks like ICICI, Kodak, and HDFC
offered security brokerage services. As a result of the growth of these startups, many discount brokers
have emerged in India and are now offering their services to an expanding clientele.

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With COVID-19, several registered brokers in equity derivative segments observed a decline in
registration at the National Stock Exchange and Bombay Stock Exchange. In line with this trend, the
average annual performance of the S&P BSE index observed a continuous increase as COVID-19 cases
started getting reduced. With the advent of COVID-19, as speculation in the market arose, there was an
increase in retail buyers of security and an increase in the demand account growth rate, which was at a
level of 13% in 2019 and reached 35% during the previous year, showing the change in people's
expectations towards increasing the value of their money.

Post-COVID-19, banks are adopting contractionary monetary policy globally, with an increase in the
interest rate and a declining stock index globally having to make retail investors spend less on buying
new shares with an increase in market fluctuation, resulting in a decline in shares sold by brokers.

2.2. Major players in the Broking 0industry

1) Groww

Groww is an investment platform based in Bangalore, India. It was founded by Lalit Keshre, Harsh
Jain, Neeraj Singh, and Ishan Bansal in May 2017. The founders are all former employees
of Flipkart who founded Groww after noting the need for a simplistic, intuitive investment platform
in India. Groww began as a direct mutual fund distribution platform. In 2020, the company began
offering access to stocks, digital gold, exchange-traded funds (ETFs), Intraday trading, and initial
public offerings (IPOs). As of 2021, Groww has over 1.5 crore (15 million) registered users in 900
cities.

2) Zerodha

Zerodha is an Indian stock broking company. The company headquarter is in Bengaluru, Karnataka,
India. It is an Indian financial service company that offers retail and institutional broking, currencies
and commodities trading, mutual funds, and bonds. The company name Zerodha is derived from
Sanskrit with combination of ‘Zero’ and ‘Rodha’ which means barrier. The company disruptive pricing
models and in-house technology made the biggest stock broker in India in terms of active retail clients.
Zerodha run a number of popular open online educational and community initiatives to empower retail
traders and investors.

3) AngelOne

Angel One Limited, formerly known as Angel Broking Limited, is an Indian stockbroker firm
established in 1996. The company is a member of the Bombay Stock Exchange, National Stock
Exchange of India, National Commodity & Derivatives Exchange Limited and Multi Commodity
Exchange of India Limited.

4) Upstox

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Upstox is an India-based investment platform founded in 2009 by Shrini Viswanath, Ravi
Kumar, Kavitha Subramanian, and Raghu Kumar. Upstox users can trade and invest in Indian stocks,
initial public offerings (IPOs), mutual funds, derivatives, exchange-traded funds (ETFs), digital
gold, currencies, commodities, and futures and options. As of May 2023, Upstox has approximately 11
million registered users.

5) ICICI Direct

ICICIdirect Markets App is a Share Market Mobile Trading App which allows traders to invest in
Stocks, Futures & Options (F&O), Commodities and Currency.

2.3. Market share of major players

At the end of September, Zerodha's market share remained the same month-on-month at 19.4% while
those of Groww rose to 19.9%. Two Bengaluru-based startups - Groww and Zerodha - together
command a market share of 39.3% in India's stock broking industry which is dominated by discount
broking firms.

2.4. Broking industry Financials

 In what could be music to the ears of the stock broking industry, a recent report by ICRA
expects the revenues of the broking industry to grow by 32% in FY22 on the back of frenetic
growth in number of accounts and average daily turnover.
 ICRA expects FY22 revenues to touch Rs.28,000 crore, the highest in history. However, the
growth in broking revenues is expected to moderate to around 5% in FY23, albeit on a much
larger base.

ICRA has noted in its report that the transaction volumes reported sequential growth led by the
futures & options segment. However, the growth in cash market turnover has been relatively
subdued.
 If the average daily turnover (ADTO) stood at Rs.28 trillion in FY21, it has grown 2.3 times to
an ADTO level of Rs.63 million in FY22. This is more than four-fold rise over the ADTO levels
of FY20.

According to ICRA, the favourable cues from the broking industry were an outcome of strong
domestic and global liquidity, steady corporate earnings, revival in economic activity, solid
internet penetration and an overall FOMO (fear of missing out) feeling by retail investors who
seemed to have jumped on the stock market bandwagon. ICRA based these findings in a sample
of 18 large brokerage houses.

The brokerage industry in India not only saw top line growth but even the profitability was
positively impacted by trimmed cost structures and operational efficiency. Most brokers have
focussed on acquisition of new customers through digital channels.

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  This has made the client acquisition process scalable and lower on the cost scale. At the same
time, the larger brokerages have also scaled up their lending books, especially margin trading
books.

Apparently, a lot of people are active in the market through the funding route. If you look at the
aggregate capital market loan book of the 10 largest retail-oriented brokers, it has grown from
Rs.4,591 crore in March 2020 to Rs.11,076 crore March 2021 and further to Rs.18,643 in
September 2021.
 The lending book comprises of margin funding products, loan against securities and employee
stock ownership plan (ESOP) funding.

For the coming year, ICRA projects the broking customers to continue to patronize the capital
markets business, although growth could moderate.
 However, they remain sceptical of the lending business since higher bond yields post the rate
hikes could make it tougher for the brokers to refinance their debt at reasonable cost. ICRA has
also noted that the discount brokerage segment will continue to disrupt the broking industry
overall.

Behind the growth in capital market volumes has been the frenetic growth in demat accounts.
The number of active demat accounts grew from 4.08 crore in March 2020 to 5.51 crore in
March 2021 and still further to 8.06 crore in December 2021.
 If we look at where the growth in broking has gravitated; it has been all about large established
entities with a strong presence in online broking. Market share consolidation will continue.

According to the ICRA report, most brokerages are now seriously looking to diversify their
revenue streams and look for more annuity revenues rather than just transaction driven
revenues.However, the core broking business would still account for about 75% of the revenues
in the medium term. As they say, the more things appear to change, the more they actually
remain the same.

2.5. Challenges faced by the broking industry

 The industry is suffering from saturation and standardization of offerings. There isn’t much
differentiation of service.
 Access to the fund managers for new or budding institutional brokers is a challenge limiting
their business revenue potential.
 The entry of modern age discount brokers has given the traditional brokers a run for their
money. Discount brokers come with a fee-based business model as against the traditional
transaction-based model.
 Broking firms are expected to increase the funding requirements to maintain adequate margins
at the exchanges.

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 Standardization of cash segment margin is expected to limit the ability of brokers to offer
additional value propositions like flexible payment terms, credit to their clients.
 The research function is still looked upon as a cost centre. It reels under the constant pressure of
churning new ideas, expanded coverage, in-depth and timely research, creative publications,
amidst limited budgets.
 High attrition is a chronic issue especially at the associate and below level, leading to delays in
new stock originations, gaps in coverage maintenance, loss of knowledge repository, and a huge
opportunity cost for the Head of Research (HoR) and Senior Research Analyst, as the whole
time and energy go in the drain.

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 Chapter 3

3. About the company

AngelOne started their journey as a traditional stock brokerage firm in the year 1996. AngelOne always
felt that empathy is really important for our customers. Since the beginning, their focus has always
been “what the customer wants” and then to match the right technology to fulfil their needs.That is how
their journey and use of technology started keeping customers at the centre stage. This led them in
growing their geographical presence all over the country.

Gradually, AngelOne changed into a Digital-first company to provide our clients personalised financial
journeys via a single app. We began our “Digital Journey” in the year 2019 by offering an end-to-end
digital investment solution to our customers.

With their tech innovation combined with the constant attention to customer needs & wants, they
fruitfully tapped new geographies and onboarded millions of new customers including tier-2 and tier-3
cities. The company is now the largest listed retail broking house in India in terms of active clients on
NSE as of December 31, 2021.

3.1. The genesis of the company and its vision and mission

Vision: To follow highest standards of ethics and compliances while facilitating the trading by clients
in securities in a fair and transparent manner, so as to contribute in creation of wealth for investors.

Mission: To provide high quality and dependable service through innovation, capacity enhancement
and use of technology. To establish and maintain a relationship of trust and ethics with the investors. To
observe highest standard of compliances and transparency.

3.2. Product and services

Products

 Equity
 Commodity
 Derivatives
 Currency Trading

Services

 Portfolio Management
 Investment Advisory
 Intra-day Trading
 Trading Account
 Portfolio Health Score
 IPO

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  Loan Against Shares
 Demat Account

3.3. Position in the Industry (Size of the company-No of branches, employees, etc)
AngelOne

No of branches- Angel Broking has 142 Offices across 14 states & 35 cities in India.

Employees- 1,001 to 5,000 employees in India.

3.4. Stakeholders detail

Board of Directors

Mr. Dinesh D. Thakkar- Chairman and Managing Director

Mr. Uday Shankar Roy- Independent Director

Mr. Ketan Shah- Whole time Director

Mr. Krishna Iyer- Non-Executive Director

Ms. Mala Todarwal- Additional Non-executive Women Independent Director

Leadership Team

Mr, Prabhakar Tiwari- Chief Growth Officer

Mr. Vineet Agrawal- Chief Financial Officer

Mr. Dinesh Radhakrishnan- Chief Technology and Product Officer

Mr. Jyotiswarup Raiturkar- Chief Technology Officer

Other Stakeholders

Central Government and regulatory authorities

National Stock Exchange (NSE)

3.5. Locational and operational details

Registered Address

601, 6th Floor, Ackruti Star,

Central Road,,MIDC, Andheri East,
Mumbai

19
Maharashtra
400093

Tel: 022-68070100
Fax: 022-68070107
Email: support@angelone.in
Website: http://www.angelbroking.com

3.6. Challenges faced by the company

Sub-brokers play a crucial role in the overall financial ecosystem of the country. However, this role
isn’t without its share of challenges. Often, the unsung heroes of the financial world, sub-brokers need
to constantly do a juggling act of guiding clients toward sound investment decisions while ensuring
their own financial and personal growth. Let’s take a closer look into the key hurdles sub-brokers
commonly face and identify ways to overcome them.

Regulatory Compliance and Evolving Norms

Navigating the complex terrain of various financial regulations is one of the major sub-broker
challenges. You need to stay updated with ever-changing compliance norms to ensure that your
operations remain compliant and risk-free. You also need to keep a vigilant eye on regulatory updates,
adapt your practices accordingly, and ensure that your clients are well-informed about any changes that
might impact their investments. Failure to adhere to regulatory requirements can lead to financial
and/or legal repercussions, tarnishing your reputation and business prospects, and may also lead to you
incurring penalties and fines.

The best way to overcome this is to prioritise continuous education and training on regulatory changes.
Establish a robust compliance framework within your operations and regularly revisit the system to
check for updates.

Market Volatility and Risk Management

The financial markets are (in)famous for their volatility. Sub-brokers often find themselves dealing
with sudden market fluctuations that can impact investment decisions and client portfolios. This would
also invite emotional distress for their clients. Managing risk and safeguarding clients’ interests amidst
such market dynamics is a constant juggling act.

To prevent excess fluctuations, employ robust risk management strategies, diversify portfolios, and
maintain open communication with clients about potential risks and rewards

Client Acquisition and Retention

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The rising number of sub-broker franchises has made it difficult to build and maintain a loyal client
base. The competitive landscape demands sub-brokers to differentiate themselves and offer value-
added services to attract and retain clients. Establishing trust and rapport with clients is a continuous
effort.

To win in this competition, focus on personalised service, transparent communication, and tailored
investment solutions. highlight your expertise, and showcase your track record. Leverage digital
marketing and networking to expand your client base. Create a unique value proposition and articulate
why clients should choose you over others.

Technological Advancements and Digital Transformation

The financial industry is constantly undergoing a technological revolution. Sub-brokers need to keep
pace and embrace digital tools and platforms to stay relevant. Adapting to new technologies, like robo-
advisors and online trading platforms, can be overwhelming for those accustomed to traditional
methods.

In this context, it is best to invest in technology training, adopt user-friendly platforms, and strike a
balance between human interaction and digital advancements. Stay abreast of recent innovations.

Economic Uncertainties and Client Anxiety

Economic uncertainties can lead to client anxiety and reluctance to invest. Sub-brokers often find
themselves navigating difficult conversations with clients who are apprehensive about market
conditions and their financial future.

To help clients overcome their anxieties, educate them about the cyclical nature of markets, provide
comprehensive financial planning, and offer guidance during market downturns.

3.7. SWOT Analysis of the company

Angel Broking is one of the leading brands in the banking & financial services sector. Angel Broking
SWOT analysis evaluates the brand by its strengths & weaknesses which are the internal factors along
with opportunities & threats which are the external factors. Let us start the SWOT Analysis of Angel
Broking:

Angel Broking Strengths

 Innovative range of financial products

 Known for transparent functioning
 Innovative I. T solutions for customers
 Emphasis on building stronger bond with customers
 Services offered include Equity Trading, Commodities, Portfolio Management Services, Mutual
Funds, Life Insurance, IPO, Depository Services, Investment Advisory

21
Above are the strengths in the SWOT Analysis of Angel Broking. The strengths of Angel Broking looks
at the key internal factors of its business which gives it competitive advantage in the market and
strengthens its position.

Angel Broking Weaknesses

 Less penetration in rural areas

 Indians are mostly conservative and prefer investing in Gold and land

These were the weaknesses in the Angel Broking SWOT Analysis. The weaknesses of a brand are
certain aspects of its business which it can improve.

Angel Broking Opportunities

 High purchasing power and people looking to more investment opportunities

 Growing rural market
 Earning Urban Youth

Above we covered the opportunities in Angel Broking SWOT Analysis. The opportunities for any
brand can include prospects of future growth.

Angel Broking Threats

 Stringent Economic measures by Government and RBI

 Entry of foreign finance firms in Indian Market

The threats in the SWOT Analysis of Angel Broking are as mentioned above. The threats for any
business can be external factors which can negatively impact its business.

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 Chapter 4

4. On the job training

 As an intern with AngelOne Ltd. I was trained with the concepts of wealth management,
stocks, mutual funds, gold and real estate. (their pros and cons, optimum percentage of
wealth to be invested in each of these instruments)
 After the training of these concepts I was given training of opening AngelOne Demat
Accounts.
 I was given a target of minimum 5 clients for opening the AngelOne accounts.
 Finally at the end of the internship I was asked to make a project out of the topics given by
the company, so I made project which is titled: Types of Research Methodology in Finance.
4.1. Key result areas
 Basic Understanding of wealth management
 Thorough knowledge of the working of mutual funds/SIP
 Understanding the complexity and risk-reward factor of stocks
 Building relationships with customers
 Following up with the customers for valid feedbacks
 Applying the knowledge provided into making the internship project

4.2. Work Responsiblities Assigned

 Learning the importance of wealth allocation by understanding the concepts of gold, real
estate, stocks, mutual funds/SIPs
 Making a minimum of 5 AngelOne Demat accounts
 Guiding the customers while making the accounts
 Taking regular feedbacks from the customers who had registered for account opening task

4.3. Technical/Managerial skills gained

 Communication
 Decision-making
 Conflict resolution
 Problem solving
 Relationship Building

Chapter 5

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5. Literature Review
(Sinha, 2010)The current study examines the influence of mergers and acquisitions on the financial
efficiency of selected financial institutions in India. The analysis comprises two stages. Initially,
through the utilization of the ratio analysis approach, we compute the alteration in the companies'
position over the period 2000-2008. Subsequently, we investigate alterations in the companies'
efficiency during the pre and post merger periods by employing the nonparametric Wilcoxon signed
rank test. Although we discovered a significant alteration in the earnings of the shareholders, there is no
notable change in the firms' liquidity position. The findings of the study indicate that M&A cases in
India exhibit a substantial association between financial performance and the M&A transaction, in the
long term, and the acquiring firms were capable of producing value.

(R., 2012) Mergers and Acquisitions are crucial strategic actions employed by corporations to facilitate
external growth and confer competitive advantage. In the contemporary era of globalization, mergers
and acquisitions (M&A) are increasingly being utilized worldwide to enhance the competitiveness of
companies by expanding market share, diversifying portfolios to mitigate business risks, entering new
markets and geographies, and harnessing economies of scale, among other benefits. The primary aim of
this research paper is to examine whether Indian Airline Companies have attained efficiency in
financial performance during the post-merger and acquisition period, particularly in terms of
profitability, leverage, liquidity, and adherence to capital market standards. The results of this study
indicate that there has been no enhancement in the surviving Company's return on equity, net profit
margin, interest coverage, earnings per share, and dividend per share subsequent to the merger and
acquisition. The findings indicate that there is an inconsequential enhancement in the return on equity,
expenses to income, earnings per share, and dividend per share subsequent to the merger. The outcomes
obtained from the paired sample t-test, conducted at a significant level of 99%, demonstrated that there
is no significant disparity in the specified financial performance criteria between the pre-merger and
post-merger periods, as the significance value exceeds 0.01. Consequently, this investigation has failed
to reject the null hypotheses, which propose that there are no substantial advancements in the surviving
company's performance following the merger and acquisition, while also rejecting the alternative
hypothesis, which posits a significant improvement in the surviving company's performance post-
merger and acquisition activity for the examined sample.

(VYAS, 2012)Mergers and acquisitions (M&A) have emerged as a significant form of corporate
restructuring in the post-globalization era within the Indian industries. This particular phenomenon is
widely regarded as the most crucial strategy employed by firms to attain a competitive advantage. The
purpose of this study is to examine the factors that drive M&A activities in the Indian pharmaceutical
industry. To achieve this goal, we utilize the PROWESS database, which is made available by the
Center for Monitoring Indian Economy, encompassing the period from 2001 to 2010. The findings
derived from the Logit analysis indicate that large and multinational affiliated firms exhibit a higher
propensity to invest in M&A endeavors. Similarly, firms that report excess capacity and allocate
substantial resources towards research and development heavily rely on M&A as a means to restructure
and consolidate their position within the industry. The current investigation examines the analysis of

24
M&A activity within the pharmaceutical industry, as well as the factors that determine such activity,
within the framework of a developing nation, specifically India. An extensive review of existing
literature proposes that in the post-liberalization era, M&A has become a mechanism for corporate
restructuring. The primary objective of firms engaging in M&A activity is to augment their physical
and capital assets. The driving forces behind M&A activity can be largely elucidated by the factors that
motivate firms to expand and grow, and it is regarded as a swifter and more efficient means of
expanding a firm's asset base and productive capacity. Additionally, the study has conducted an
examination of the determinants of economic activity that holds strategic importance. In the Indian
pharmaceutical industry, both cross tabulations and Logit analysis indicate that firms engaging in M&A
activities are of greater magnitude when compared to non M&A active firms. These findings suggest
that smaller firms are hindered in their ability to grow due to limited access to resources. Conversely,
larger firms possess the necessary resources to invest in multiple capacity expansions as well as
technological advancements. Consequently, it is imperative for the government to facilitate the
consolidation of smaller firms within the industry. This would provide an opportunity for firms in this
sector to expand and effectively compete in both the generic and specialized drug market. Cross
tabulations results indicate that the R&D expenditure for the industry as a whole amounts to merely 2.6
percent, with a minimum of zero. This finding suggests that only a small number of firms are engaging
in pioneering R&D activities within this industry. The stringent policies implemented by the Indian
government during the pre-liberalization era have resulted in a significant technological gap between
Indian and Western firms. The Logit results demonstrate a positive correlation between R&D intensity
and M&A. This observation could potentially indicate that in-house R&D activities complement
technology acquisition through M&A in high-tech industries such as pharmaceuticals. Consequently, it
is imperative for the government to devise an R&D-oriented policy and offer assistance to firms in
identifying emerging areas where R&D efforts can be directed. This will enable firms to enhance their
knowledge accumulation and gain a competitive edge in the global market. Approximately 6 percent of
the companies involved in merger and acquisition (M&A) transactions possess foreign ties, and the
utilization of Logit analysis reaffirms the notion that multinational enterprise (MNE) affiliation
positively influences a firm's decision to engage in M&A activities. The implementation of post
liberalization economic policies has facilitated the influx of foreign investment into the economy,
thereby allowing for 100 percent foreign direct investment (FDI) within the pharmaceutical industry.
However, further investigation is necessary in order to fully comprehend the precise nature and
ramifications of M&A deals conducted by MNE-affiliated entities. It is apparent from the cross
tabulation that the mean utilization of a firm's capacity stands at approximately 84 percent.
Consequently, pharmaceutical firms necessitate a substantial amount of investment to sustain
production and maintain competitiveness through continuous technological advancements and asset
enhancement. The government has the potential to enhance the availability of funds for this industry
and establish policies that promote improved pricing for pharmaceutical products, resulting in higher
profits and cash flow generation.

(Singh, 2018)This investigation was conducted with the intention of evaluating the influence of merger
and acquisition activities on the performance of Banks in India. The scholarly article examines the
patterns in M&A's in the Indian banking sector and subsequently analyzes the effects of M&A's on

25
three prominent Indian banks. The research encompasses the domain of performance assessment of
M&A's in the Indian banking industry over a six-year period both before and after the occurrence of
merger and acquisition activity. The paper scrutinized the financial performance of merged banks
subsequent to the merger, utilizing financial indicators such as Net Profit margin, operating Profit
margin, return on Capital Employed, Return on Equity, earnings per share, capital adequacy ratio,
dividend per share, and other related metrics. The findings revealed that strategies and policies within
procedural, physical, and socio-cultural contexts played a pivotal role in the post-merger and
acquisition process. The qualitative effects of post-merger and acquisition activities, such as financial
reports, market assessments, and expert opinions, hold significant importance in enhancing the
performance and capabilities of the Bank. The study suggests that management should reassess policies
and strategies, including the credit policy, to strengthen both internal and external operations.
Furthermore, improvements in logistical support are necessary, and a more comprehensive approach to
integrated marketing communications is recommended to promote the Bank's existing and new
products and expand its market presence.With respect to the responses to the declaration of
amalgamation, the market initially endeavored to manifest negative reactions to the majority of the
banks' acquisition declaration; however, overall, there was either a depletion or a generation of
shareholder wealth for investors in both public and private sector banks. In the banking sector, the
announcements of mergers typically culminate in either no (or slightly positive) cumulative abnormal
returns on the stocks of acquiring banks and notably positive abnormal returns on the stocks of target
banks. Nonetheless, caution must be exercised when interpreting these outcomes. While stock prices
disclose the market's anticipation of future cash flows, the actual performance may deviate from the
market's expectations. This observation is particularly valid in the context of bank mergers.Results also
indicate that the surviving personnel of the consolidated financial institutions hold a positive perception
of the merger initiatives undertaken by their employer. Initially, the employees experienced trepidation
concerning the disclosure of the merger details; however, effective communication from the
management alleviated their concerns and facilitated their adjustment to the new circumstances. In fact,
the employees expressed great satisfaction with the adequacy of the information provided and the level
of communication maintained by their superiors. By involving the employees in the change process,
they developed a sense of confidence in their employer and began to appreciate the objectives of the
merger strategy.

(Khan, 2011)The aim of this article is to investigate the diverse motivations behind Merger and
Acquisitions in the banking sector of India. This encompasses the various facets of Merger and
Acquisitions within the banking industry. It also compares the pre and post merger financial
performance of merged banks using financial indicators such as Gross-Profit Margin, Net-Profit
Margin, Operating Profit Margin, Return on Capital Employed (ROCE), Return on Equity (ROE), and
Debt-Equity Ratio. Through a review of existing literature, it is revealed that a majority of the research
conducted has emphasized the impact of Merger and Acquisitions on different aspects of companies.
The data on Merger and Acquisitions since the period of economic liberalization has been collected for
a range of financial indicators. This study also examines the changes experienced by the acquiring
firms based on financial aspects, as well as the overall influence of Merger and Acquisitions (M&As)
on acquiring banks. The researcher employed the independent t-test to examine the statistical

26
significance. This test was not only utilized for ratio analysis but also to assess the impact of mergers
and acquisitions on bank performance. This performance evaluation was conducted based on two
criteria, namely pre-merger and post-merger. The findings of the study demonstrate that banks have
experienced a positive influence as a result of mergers and acquisitions (M&As). These results imply
that merged banks can enhance efficiency and achieve gains through mergers and acquisitions (M&As),
ultimately benefiting equity shareholders through dividend distribution. Merger and Acquisition serves
as a valuable tool for the expansion and development of the Indian banking sector. Its utility lies in its
ability to ensure the survival of weaker banks by merging them with larger institutions. The aim of this
research is to analyze the impact of M&As in the Indian banking sector by examining two specific
cases as samples. The objective is to determine whether the merger resulted in a profitable outcome. To
achieve this, a comparison is made between the pre and post merger performance in terms of various
financial metrics such as gross profit margin, net profit margin, operating profit margin, return on
capital employed, return on equity, and debt equity ratio. The study also compares the overall
performance of both banks prior to the merger, with the performance of the acquiring bank following
the merger, both observed over a period of three years.

(Saboo, 2009)Mergers and acquisitions are employed as a means to enhance the competitiveness of
corporations and attain a competitive edge over other firms by increasing their market share,
diversifying their portfolio to mitigate business risks, venturing into new markets and geographies, and
leveraging economies of scale, among other advantages. India has emerged as one of the foremost
nations in terms of merger and acquisition transactions. Indian companies have actively engaged in
domestic as well as international mergers and acquisitions within India. The proportion of deals where
India has served as the target or acquirer has experienced a significant increase over the past decade,
surging from $2.2 billion in 1998 to $62 billion in 2007. As India intensifies its involvement in mergers
and acquisitions, it is instructive to compare the characteristics of domestic and cross-border
acquisitions due to their inherent distinctions. This academic investigation aimed to examine the
influence of mergers on the operational efficacy of acquiring organizations by analyzing select
premerger and post-merger financial indicators of said organizations. Additionally, it sought to identify
discrepancies in the pre-merger and post-merger ratios between organizations involved in domestic
acquisitions and those involved in international/cross-border acquisitions. The findings indicate that the
impact on performance subsequent to mergers varies, contingent upon the type of organization acquired
- whether domestic or cross-border. Specifically, mergers have demonstrated a beneficial effect on key
financial ratios of organizations acquiring domestic entities, whereas they have exhibited a slightly
detrimental impact on organizations acquiring cross-border entities.The purpose of this investigation
was to examine whether the form of procurement, namely domestic or cross-border, has a distinct
impact on the performance of the acquiring organization. The type of acquisition does indeed appear to
play a significant role in the performance of the companies and does yield discernible differences. The
limitations of this inquiry encompass potential dissimilarities in characteristics, such as industry and
size, among the firms in the disparate samples of domestic and cross-border acquisitions. Additionally,
it should be noted that cross-border acquisitions tend to involve larger-sized firms, which may have an
influence on the analysis. Another constraint could be the size of the sample and the duration of the
study, which spanned from 2000 to 2007. This timeframe witnessed two significant market bubbles,

27
namely the dot com bubble and the real-estate bubble, which could potentially affect the analysis
conducted in this study.

(Goyal, 2012)To maintain a high standing in the globalized economy, one must adhere to a path of
growth that presents a multitude of challenges and issues. Overcoming these obstacles and dilemmas is
imperative in order to achieve success. Therefore, the objective of this article is to analyze the
expansion of ICICI Bank Ltd. through mergers, acquisitions, and amalgamation. This article is divided
into four sections. The initial section encompasses an introduction and a conceptual framework of
mergers and acquisitions. The subsequent section delves into the historical background of ICICI Bank
Ltd. and is followed by a literature review. The third section thoroughly examines all the mergers,
acquisitions, and amalgamations. Ultimately, the article concludes that a firm must formulate a strategy
in three distinct phases: the pre-merger phase, the acquisition phase, and the post-merger phase. Thus,
in accordance with the aforementioned discourse, it can be posited that Mergers and acquisitions
(M&As) are regarded as corporate occurrences that enable an organization to engender synergistic
effects and establish a sustainable competitive advantage. However, concurrently, these types of
corporate events possess the capacity to engender profound personal distress and strain, which can
manifest in psychological, behavioral, health, performance, and survival predicaments for both
individuals and companies, regardless of whether they are banking or non-banking financial
institutions. This phenomenon is accompanied by extensive enumerations of activities and tasks that
necessitate expeditious completion, often with incommensurate information (e.g., the formation of
novel teams and departments). Numerous opportunities are available for exploitation and numerous
decisions must be made. Nevertheless, it is conceivable to partition the myriad challenges and concerns
into three distinct phases, namely the pre-merger phase, acquisition phase, and post-merger phase, all
of which warrant further investigation.

(Joshi, 2011)The realm of competition resembles a dense and challenging environment, akin to a jungle,
where formidable entities consume smaller ones. As a result, it is imperative for individuals to possess
the necessary skills and capabilities to emerge victorious in this rivalry. Empirical evidence suggests
that larger corporations have assimilated their smaller counterparts into their own operations. The
impetus for this review article on mergers within the banking industry stems from the case involving
the Bank of Rajasthan Ltd. and ICICI Bank Ltd. The primary objective of this paper is to investigate
the underlying motives that drive banks to engage in mergers and acquisitions, with a particular
emphasis on the Indian Banking Industry. To accomplish this, a sample of 17 post-liberalization bank
mergers is utilized. This research is conducted by assessing the number of branches, market
penetration, and the advantages derived from these mergers. Additionally, beyond the financial
considerations, this article also poses several inquiries pertaining to Human Resources Management
and Organizational Behavior, thereby catering to the scholarly and research community.The banking
sector is regarded as one of the most rapidly expanding fields within the developing economies such as
India. The concept of mergers and acquisitions (M&A) has been widely discussed as a highly
beneficial mechanism for growth, thereby attracting the attention of numerous researchers and scholars.
It is noteworthy that the Indian economy has experienced a significant surge in growth subsequent to
the liberalization era, with the banking sector being an integral component of this progression. Through

28
the examination of M&A activities within the banking sector, it has become evident that this approach
serves as a valuable tool for the survival of weaker banks, achieved through merging with larger
banking institutions. Our study has revealed that smaller, localized banks encounter challenges in
withstanding the repercussions of the global economy. Consequently, they require support, hence
contributing to the rationale behind pursuing mergers.Certain private financial institutions employed
mergers as a strategic instrument to broaden their scope. The rural markets of India possess substantial
untapped potential, which has yet to be explored by the prominent banks. Consequently, ICICI Bank
Ltd. has implemented mergers as their approach to expanding within the rural market. They have
achieved success in establishing their presence in rural India, thus fortifying their connectivity across
territorial confines, enhancing their customer base, and augmenting their market share.Any action of
the object leads to the reactions on the other hand and that is what happened in the merger of the Bank
of the Rajasthan and ICICI Bank Ltd. when employees of BOR got agitated when the news about the
merger was released. Consequently, various emerging issues have been identified for further attention
of researchers and scholars.

(Poddar, 2019)Merger and acquisition have been the prevailing methods of inorganic expansion for
corporations throughout time. It is widely employed for the purpose of restructuring business entities.
Corporations engage in mergers and acquisitions driven by strategic business motives, which primarily
revolve around economic factors. This research endeavor seeks to assess the influence of pre and post
financial performance of the acquiring companies. This evaluation will be carried out by comparing the
pre-merger and post-merger performance of the acquiring company in selected M & A transactions in
India during two distinct periods―2007-2008 (chosen due to the 2008 global financial crisis) and
2012-2013 (a surge in deals occurred after 2010 and then again in 2012-2013). This analysis will
employ specific financial ratios and a paired t-test with a significance level of 5%. The examined time
frame demonstrates that the entirety of the mergers and acquisitions (M&A) transactions seems to have
contributed less than the anticipated value to the acquiring company. This outcome could be attributed
to various factors, such as the macroeconomic environment (specifically, the timing of the deal) and the
motivations behind the merger from the perspective of the acquiring company. It appears that there are
certain overarching factors that restrict the performance of Indian acquiring companies, most notably
the global financial crisis. The time frame of the study was limited to one year before and one year after
the event, although a long-term analysis could be conducted to explore the impact over an extended
duration.

(Bhalla, 2014)Globalization, deregulation, and technological advancements have led to an increase in

mergers and acquisitions (M&A) worldwide. Extensive literature exists on this topic in advanced
economies; however, limited information is available regarding M&A in India. Different sectors have
shown varying degrees of involvement in M&A activities, with some sectors demonstrating higher
levels of participation. Notably, the financial services and pharmaceutical sectors exhibit significant
M&A activity. To highlight the varying importance of sectors in M&A activities, it is essential to
conduct a sector-specific analysis. Consequently, this study aims to examine the distinct representation
of different sectors in M&A and explore India's role in the global surge of M&A activity. In light of
this, it also identifies the factors that drive consolidation in the financial sector at a global level. The

29
analysis endeavors to discern trends and patterns of mergers and acquisitions in various sectors within
India throughout time. Furthermore, an effort has been made to investigate the significance of India
within the global landscape of mergers and acquisitions, specifically within the financial services
sector. Within this context, the role of factors such as deregulation, technology, and globalization in
determining the level of mergers and acquisitions activity has been emphasized. It has also been
observed that there has been a noteworthy increase in mergers and acquisitions during the post-2000
era, particularly within the financial sector of India. A meticulous analysis reveals an intriguing pattern
in the activity of mergers and acquisitions. Sectors such as paper products, printing, publishing, media
and entertainment, food products, textiles, non-metallic mineral products, metals, machinery,
automobiles, and miscellaneous manufacturing have displayed relatively low levels of involvement in
mergers and acquisitions activity. The varying participation of different sectors in merger and
acquisition (M&A) activity can potentially be explained by macroeconomic factors that have an impact
on the entire industry, such as growth, reform measures, taxation, and government policy. Alternatively,
microeconomic factors that are inherent to a firm, such as efficiency, potential economies of scale, and
managerial aspects, may also play a role. Notably, sectors like pharmaceuticals, telecommunications,
and finance have experienced significant reforms since 1991. Consequently, it would be highly
beneficial to examine the relationship between liberalization measures and the level of involvement in
M&A activity across various sectors. The examination of patterns in different industries provides a
context for understanding the potential consequences of integrating the Indian financial services sector.
The considerable volume of mergers and acquisitions in the financial sector provides opportunities to
investigate the motivations and advantages that companies gain when engaging in such transactions.

Objectives of this study

1) To learn the extend of impact of merger on the Indian Media and Entertainment industry.
2) To understand how this merger when its complete, will restructure the Media and Entertainment
space in India.

Chapter 6

6. Data Analysis of Zee and Sony merger

A. Introduction to Mergers & Acquisitions (M&A)

30
Definition of M&A

The phrase mergers and acquisitions (M&A) pertains to the amalgamation of corporations or their
substantial business assets through monetary transactions among corporations. A corporation might
wholly procure and absorb another corporation, amalgamate with it to establish a novel corporation,
acquire a portion or entirety of its significant assets, extend a tender offer for its stock, or undertake a
hostile takeover. All aforementioned actions are encompassed within the domain of M&A activities.

Moreover, the expression M&A is also employed to delineate the sectors of financial institutions that
engage in such endeavors.

a. Types of mergers and acquisitions

1. Horizontal merger

A horizontal merger transpires when two enterprises, engaged in the same market and offering
comparable products or services, amalgamate with the purpose of obtaining dominance in market
share. This category of merger holds appeal for the merging entities as it allows them to establish
economies of scale and reduce market competition. Nonetheless, there exist potential drawbacks. A
horizontal merger necessitates heightened regulatory scrutiny and stringent measures, and may result in
a depreciation of worth if the integration subsequent to the merger is not fully realized. Consequently, it
is imperative to conduct regulated due diligence with utmost caution. An instance of a horizontal
merger could be observed if McDonald's and Burger King were to unite their forces.

2. Vertical merger

Vertical mergers entail the collaboration of two corporations operating within the same industry but at
distinct stages of production. This may encompass the blending of a retailer with a wholesaler or the
amalgamation of a wholesaler with a manufacturer, among other scenarios. This particular merger type
is particularly advantageous for the optimization of operations, enhancement of efficiencies, and
reduction of costs throughout the supply chain. However, it may also lead to a decrease in flexibility
and the emergence of novel intricacies for the enterprise to navigate. An example of a renowned
vertical merger is the transaction involving eBay and PayPal.

3. Congeneric merger

In a congeneric merger, the acquirer and target company possess dissimilar goods or services,
nevertheless they function within the identical market and vend to the identical clientele. They could
potentially be indirect rivals, even though their offerings frequently supplement one another. Given that
these entities already share analogous distribution channels, production methods or technology, this
form of merger has the potential to enable the novel commercial entity to expand its range of products
and augment its market share. Nonetheless, it is important to note that the fact that these two
corporations already operate within the same industry may impede further diversification. A notable
instance of a congeneric merger is the amalgamation between Exxon and Mobil.4.

31
4. Market-extension and product-extension mergers

A market expansion merger involves the collaboration of two enterprises within the same sector, with
the objective of broadening their market presence. Typically, this kind of business transaction takes
place across various geographical areas. On the other hand, a product expansion merger takes place
when the acquiring company incorporates a particular product into its existing product line from the
company being acquired.

5. Statutory merger

In the case of a statutory merger, it is imperative that the legal regulations of the state (or states) in
which the acquiring and target entities were formed are adhered to. Failure to comply with these
regulations renders the merger invalid. The merger proposal must obtain the endorsement of the boards
of directors and the consent of the stakeholders of the absorbed entity. Subsequently, the relevant
details must be recorded with the Secretary of State in the applicable jurisdiction(s). Within the realm
of a statutory merger, the legal existence of only one of the two companies is preserved. In this manner,
it bears resemblance to an acquisition.

6. Triangular merger

A triangular merger materializes when there exists an acquiring entity (ParentCo), a prospective entity,
and a subsidiary of the acquiring entity. Typically, the subsidiary is freshly established with the sole
purpose of facilitating the acquisition of the prospective entity, in other words, a dormant entity. In a
technical sense, the merger takes place between the subsidiary and the prospective entity, however, the
consequence of this transaction is that the prospective entity becomes a completely owned subsidiary of
ParentCo. The primary motive behind conducting a triangular merger is to enable ParentCo to procure
the prospective entity without undertaking its obligations.

7. Consolidation

A statutory consolidation arises when multiple business entities amalgamate to establish a completely
novel business entity. The primary benefit of this form of amalgamation lies in its efficacy;
consolidation generally enhances the financial performance. An exemplary illustration is the Daimler-
Chrysler transaction that transpired in 1998.

8. Asset purchase

An asset purchase or acquisition can be distinguished from a share or interest acquisition in several
aspects:

In the case of an asset acquisition, the target entity does not assume the position of a subsidiary under
the acquiring company's structure. Instead, it remains a separate entity. Furthermore, the payment for
the acquisition is made directly to the business itself, rather than being disbursed to the shareholders of
the target entity.

32
b. Purpose of Mergers & Acquisition
1. Synergies

By amalgamating commercial operations, there is a tendency for the overall efficacy of performance to
augment and for universal expenditures to diminish, as a consequence of each enterprise capitalizing on
the strengths of the other enterprise.

2. Growth

Mergers afford the acquiring entity the possibility to expand its market presence without exerting
substantial effort. In lieu of laborious efforts, acquirers merely purchase the rival company's enterprise
at a predetermined cost, commonly referred to as a horizontal merger. A case in point would be a beer
enterprise opting to acquire a smaller competing brewery, thereby empowering the lesser establishment
to augment its beer production and amplify sales to patrons loyal to the brand.

3. Increase Supply chain pricing power

By acquiring one of its suppliers or distributors, a business has the opportunity to eradicate an entire
layer of expenses. Precisely, the acquisition of a supplier, referred to as a vertical merger, enables a
company to reduce the additional profits that the supplier previously incorporated into its costs.
Moreover, through the acquisition of a distributor, a company frequently obtains the capacity to
dispatch products at a reduced expense.

4. Eliminate competition

Many mergers and acquisitions (M&A) transactions afford the acquiring party the opportunity to
eradicate forthcoming competition and procure a more sizable portion of the market. Conversely, a
substantial premium is commonly obligatory to persuade the shareholders of the target company to
assent to the proposal. It is not infrequent for the shareholders of the acquiring company to divest
themselves of their shares and exert downward pressure on the price, as a reaction to the excessive
payment made for the target company.

B. Industry Analysis- Indian Media and Entertainment Industry

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making
significant strides. The increasing availability of fast and cheap internet, rising incomes, and increasing
purchases of consumer durables have significantly aided the industry. India’s media and entertainment
industry are unique as compared to other markets. The industry is well known for its extremely high
volumes and rising Average Revenue Per User (ARPU).

This significantly aided the country’s industry and made India leading in terms of digital adoption and
provided companies with uninterrupted rich data to understand their customers better. India has also

33
experienced growing opportunities in the VFX sector as the focus shifted globally to India as a
preferred content creator.

Proving its resilience to the world, Indian M&E industry is on the cusp of a strong phase of growth,
backed by rising consumer demand and improving advertising revenue. According to a FICCI-EY
report, the advertising to GDP ratio is expected to reach 0.4% by 2025 from 0.38% in 2019.

C. Size of the Indian Media and Entertainment Industry

 As per the latest report by the EY, India’s Media and entertainment Industry is expected to reach
Rs. 2.34 trillion (US$ 29.2 billion), then grow at a CAGR of 10% to reach Rs. 2.83 trillion (US$
35.4 billion) by 2025. Advertising revenue in India is projected to reach Rs. 394 billion (US$
5.42 billion) by 2024. The share of traditional media (television, print, filmed entertainment,
OOH, music, radio) stood at 58% of the media and entertainment sector revenues in 2022.
 Indian digital industry is expected to grow at 29% to reach a market size of Rs. 35,809 crore
(US$ 4.35 billion) by the end of 2023. It is expected to contribute 38% to the overall advertising
industry in India, on par with television.
 The OTT segment is likely to grow at a remarkable CAGR of 14.1% to reach Rs. 21,032 crore
(US$ 2.55 billion) in 2026. Subscription services, which accounted for 90.5% of revenue in
2021, are projected to account for 95% of revenue by 2026.
 Within the M&E sector, Animation, Visual Effects, Gaming and Comic (AVGC) sector is
growing at a rate of ~29%, while the audio-visual sector and services is rising at the rate ~25%;

34
 is recognised as of one of the champion sectors by the Government of India. The AVGC sector
is estimated to grow at ~9% to reach ~Rs. 3 lakh crore (US$ 43.93 billion) by 2024, stated
Union Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution and
Textiles, Mr. Piyush Goyal.
 PE/VC led 77% of the media and entertainment deals in 2022, contributing to 57% of the total
funding, while 23% of total deals were led by strategic players in 2022
 In 2022 (January-July 2022), PE/VC investments In the media and entertainment industry was
at US$ 3,389 million. FDI inflows in the information and broadcasting sector (including print
media) stood at US$ 10.04 billion between April 2000-December 2022.
 The Indian OTT audience universe currently stands at 424 million people, according to The
Ormax OTT Audience Sizing Report 2022. Of these, 119 million are active paid OTT
subscriptions in India.
 India’s SVOD subscriptions reached 130.2 million in 2022 compared to 110.5 million in 2021.
 As per GroupM’s TYNY report 2023, India was ranked 8th by global ad spend, and will
continue as the fastestgrowing market among the top 10 ad markets in 2023.
 Advertising revenue in India is projected to reach Rs. 394 billion (US$ 5.42 billion) by 2024.
India’s subscription revenue is projected to grow at a CAGR of 2% and reach Rs. 432 billion
(US$ 4.94 billion).
 Key growth drivers included rising demand for content among users and affordable subscription
packages.
 The Indian mobile gaming market is growing at a pace in tandem with the global trend and is
expected to reach US$ 7 billion in 2025. The online gaming market in India is projected to
reach US$ 2.81 billion by 2025, from Rs. 76 billion (US$ 1.08 billion) in 2020, due to rapid
increase in consumption.
 The music industry is expected to reach US$ 400 million by 2025 from US$ 199 million in
2019. According to a study conducted by Kantar and VTION, an audience measurement and
analytics company, Gaana, the streaming service owned by Times Internet Ltd., had 30%
market share, followed by JioSaavn (24%), Wynk Music (15%), Spotify (15%), Google Play
Music (10%), and others (6%) in 2020.
 About 1 million music streams were played every 3 minutes in FY23, totalling 460 million
streams per day, according to a report by Redseer Strategy Consultants. Spotify led India’s
music and audio streaming market in FY23 with a 26% share, as compared to just 11% share in
FY20.
 Growth of the sector is attributable to the trend of platform such as YouTube that continues to
offer recent and video content-linked music for free, which is expected to drive the paid OTT
music sector reaching ~5 million end-users by 2023, generating revenue of ~Rs. 2 billion (US$
27 million).
 By 2025, the number of connected smart televisions are expected to reach ~40-50 million. 30%
of the content viewed on these screens will be gaming, social media, short video and content
items produced exclusively for this audience by television, print and radio brands. In the third
quarter of 2022, smart TV shipments from India increased by 38% YoY, due to rising expansion

35
 activities adopted by original equipment manufacturers (OEMs) for their smart TV portfolios.
By 2025, ~600-650 million Indians, will consume short-form videos, with active users spending
up to 55 to 60 minutes per day.
 According to the FICCI-EY media and entertainment industry survey, those who watch online
videos through bundled packages (online video services bundled with mobile and broadband
connections) will account for half of all online video viewers (399 million) by 2023, up from
284 million in 2020.
 As of 2022, India registered ~527 million online video viewers, including streaming services
and videos on free platforms such as YouTube. Mobile video viewers stood at 356 million in
2020, driven by rising number of users preferring video content over the last few years.
 OTT video services market (video-on-demand and live) in India is likely to post a CAGR of
29.52% to reach US$ 5.12 billion by FY26, driven by rapid developments in online platforms
and increased demand for quality content among users.

Recent development/investments

Recent developments in the Media and Entertainment Industry are:

 Media company Shemaroo Entertainment is planning to spend Rs. 75 crore (US$ 9.1 million) in
FY24 to bolster its broadcast and over-the-top (OTT) businesses.
 Newly merged multiplex giant PVR Inox is ready with a plan to add up to 175 new screens and
retrofit a host of existing ones at an investment of Rs. 700 crore (US$ 85.1 million) during
FY24.
 In April 2023, Prime Minister Mr. Narendra Modi commissioned Low Power FM Transmitters
of capacity of 100 watt at 91 locations. These transmitters have been installed in 84 districts of
20 states. With this, the network of transmitters with All India Radio has increased from 524 to
615. The addition will further boost the coverage of AIR to 73.5% of the population of the
country.
 A partnership was announced in April, 2023 between the Ministry of Information &
Broadcasting and Amazon India in the field of media, entertainment, and public awareness.
 The online gaming segment grew 35% in 2022 to reach Rs. 135 billion (US$ 1.64 billion). It is
the fourth largest segment of the Indian M&E sector.
 Music from South Indian languages such as Kannada, Malayalam, Tamil, and Telugu has
witnessed the fastest growth in the vernacular in the last four years in FY23.The highest
contributor to OTTA with the non-film genre was Punjabi music (39%) across all states.
 In June 2022, the exclusive rights for the television broadcast of the Indian Premier League
(IPL) from 2023-2027 was acquired by DisneyStar.
 In March 2022, Pocket FM in India raised US$ 65 million and has plans to expand in new
regional languages.
 In March 2022, Krafton infused US$ 19.5 million in Indian audio content platform Kuku FM.
 In November 2021, media consulting firm Ormax Media, launched an OTT Brand Health
Tracking Tool called Ormax Brand Monitor (OBM). The tool is based on syndicated research

36
 conducted every month among SVOD & AVOD audiences across India, to track the
performance of 16 OTT platforms on key brand measures.
 In November 2021, social gaming platform WinZO, with Kalaari Capital announced a new
investment initiative, ‘Gaming Lab’, to encourage and support India’s gaming ecosystem.

C. Major players in the Media and Entertainment Industry

Media and entertainment refer to the various forms of content that are created and distributed for the
purpose of entertaining and informing people. The media industry includes a wide range of media
formats, including television, film, radio, print media (newspapers and magazines), video games, and
online content such as social media, streaming platforms, and podcasts.

The entertainment industry is also closely related to media, but it specifically focuses on providing
entertainment to audiences. This includes a wide range of activities, such as live performances (such as
concerts and theater shows), theme parks, and various types of events and exhibitions.

1) Reliance Industries Limited (Entertainment Division)

Reliance Industries Limited (Entertainment Division), also known as Reliance Entertainment, is a

subsidiary of Reliance Industries Limited, one of the largest conglomerates in India. The company is
headquartered in Mumbai and was founded in 2005.

Reliance Entertainment is involved in a wide range of activities in the media and entertainment
industry, including film production and distribution, television production, animation, and digital
content creation. The company has produced and distributed several successful Bollywood films, such
as “Bajrangi Bhaijaan,” “Singham,” and “Bodyguard,” among others.

Reliance Entertainment has also invested in several international film projects, including co-producing
Steven Spielberg’s “The BFG” and Tom Cruise’s “Mission Impossible: Ghost Protocol.” The company
has also partnered with several global entertainment companies, including DreamWorks SKG, IM
Global, and Phantom Films, among others.

2) Walt Disney Company India

Walt Disney Company India is a subsidiary of The Walt Disney Company, one of the world’s largest
media and entertainment conglomerates. The company was established in India in 2004 and is
headquartered in Mumbai.

Walt Disney Company India is involved in a variety of media and entertainment activities, including
film production and distribution, television programming, licensing and merchandising, and theme park
operations. The company has produced and distributed several successful Bollywood films, such as
“Dangal,” “ABCD,” and “Khoobsurat,” among others.

Walt Disney Company India also owns and operates several popular TV channels in India, including
Disney Channel, Disney XD, Disney Junior, and Hungama TV. These channels offer a range of

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programming targeted at children and families, including animated shows, live-action series, and
movies.

3) Viacom18 Media Pvt Ltd

Viacom18 Media Pvt. Ltd. is a joint venture between Viacom Inc. and the Network18 Group, a leading
Indian media and entertainment conglomerate. The company was founded in 2007 and is headquartered
in Mumbai, India.

Viacom18 operates several popular TV channels in India, including Colors, MTV, Nickelodeon, and
VH1, among others. The company offers a wide range of programming, including movies, TV shows,
live events, and other content.

In addition to its TV operations, Viacom18 is also involved in film production and distribution. The
company has produced several successful Bollywood films, such as “Padman,” “Andhadhun,” and
“Drishyam,” among others. Viacom18 has also distributed several Hollywood films in India, including
“Mission: Impossible – Fallout,” “Transformers: The Last Knight,” and “Star Trek Beyond,” among
others.

4) Sun TV Network Ltd

Sun TV Network Limited is a media and entertainment company headquartered in Chennai, India. The
company was founded in 1993 and is part of the Sun Group, a leading Indian conglomerate.

Sun TV Network operates several popular TV channels in India, including Sun TV, Gemini TV, Surya
TV, and Udaya TV, among others.

The company offers a wide range of programming, including movies, TV shows, news, and other
content in the South Indian languages such as Tamil, Telugu, Kannada, and Malayalam.

In addition to its TV operations, Sun TV Network is also involved in film production and distribution.
The company has produced several successful South Indian films, such as “Baahubali,” “Kabali,” and
“Theri,” among others. Sun TV Network has also distributed several international films in India,
including “The Hobbit” trilogy and “Furious 7,” among others.

5) Eros International Media Limited

Eros International Media Limited is a media and entertainment company headquartered in Mumbai,
India. The company was founded in 1977 and is involved in the production and distribution of Indian
films globally.

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Eros International operates in several segments, including film production and distribution, music
production and distribution, and digital platforms. The company has produced and distributed several
successful Bollywood films, such as “Bajrangi Bhaijaan,” “Bajirao Mastani,” and “Padmaavat,” among
others. Eros International has also distributed several Hollywood films in India, including “The Hunger
Games” series and “The Expendables” series, among others.

In addition to film production and distribution, Eros International is also involved in music production
and distribution. The company has a vast catalog of music from Bollywood films, which it distributes
through various channels, including digital platforms.

6) Network18 Media & Investments Limited

Network18 Media & Investments Limited is a media and entertainment company headquartered in
Mumbai, India. The company was founded in 1993 and is part of the Reliance Group, one of India’s
largest conglomerates.

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Network18 operates several popular TV channels in India, including CNN-News18, CNBC-TV18,
Colors, and MTV India, among others. The company offers a wide range of programming, including
news, business, entertainment, and other content.

In addition to its TV operations, Network18 is also involved in digital media and operates several
popular websites, including Moneycontrol, News18.com, and Firstpost, among others. The company
has also launched mobile applications to offer its content on the go.

7) Balaji Telefilms Limited

Balaji Telefilms Limited is a media and entertainment company headquartered in Mumbai, India. The
company was founded in 1994 by Ekta Kapoor, one of India’s leading TV producers.

Balaji Telefilms is involved in several segments of the media and entertainment industry, including TV
production, film production, and digital platforms.

The company has produced several popular TV shows in India, including “Kyunki Saas Bhi Kabhi
Bahu Thi,” “Kahaani Ghar Ghar Kii,” and “Kasautii Zindagii Kay,” among others. The company’s
shows are known for their high production value, engaging storylines, and talented casts.

In addition to TV production, Balaji Telefilms is also involved in film production, with its subsidiary,
Balaji Motion Pictures. The company has produced several successful Bollywood films, such as “The
Dirty Picture,” “Shootout at Lokhandwala,” and “Udta Punjab,” among others.

8) UTV Software Communications Limited

UTV Software Communications Limited (UTV) is a media and entertainment company headquartered
in Mumbai, India. The company was founded in 1990 and is known for its film production and
distribution, TV production, and gaming businesses.

UTV has produced several successful Bollywood films, such as “Rang De Basanti,” “Swades,” and
“Barfi!,” among others. The company has also co-produced several Hollywood films, such as “The
Happening,” “The Incredible Hulk,” and “Delhi Safari,” among others. In addition to film production,
UTV also distributes films in India and internationally.

UTV is also involved in TV production and has produced several popular TV shows in India, including
“Shaktiman,” “Jassi Jaissi Koi Nahin,” and “Kyunki Saas Bhi Kabhi Bahu Thi,” among others. The
company’s TV shows are known for their high production value, engaging storylines, and talented
casts.

9) TV Today Network Limited

TV Today Network Limited is a media and entertainment company headquartered in New Delhi, India.
The company was founded in 1999 and is part of the India Today Group, one of India’s leading media
conglomerates.

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TV Today Network operates several popular TV channels in India, including Aaj Tak, India Today TV,
and Tez, among others. Aaj Tak is one of the most-watched Hindi news channels in India, known for its
coverage of national and international news, politics, and sports. India Today TV is a leading English
news channel in India, known for its in-depth analysis and investigative journalism.

In addition to its TV channels, TV Today Network is also involved in digital media and operates several
popular news websites, including Aaj Tak and India Today, among others. The company has also
launched mobile applications to offer its content on the go.

10) Dish TV India Limited

Dish TV India Limited is a direct-to-home (DTH) service provider headquartered in Noida, India. The
company was founded in 2003 and is part of the Essel Group, one of India’s leading business
conglomerates.

Dish TV India provides DTH services to millions of customers in India, offering a wide range of TV
channels, including national and international channels, as well as popular regional channels in various
Indian languages. The company also offers high-definition (HD) channels, as well as other value-added
services such as movie-on-demand, pay-per-view, and interactive services.

Dish TV India has won several awards for its services, including the Indian Telly Awards, the Indian
Digital Media Awards, and the Asia Pacific Pay-TV Operators Awards, among others. The company is
known for its high-quality programming and customer service, and is widely regarded as one of the
most reliable DTH service providers in India.

11) PVR Limited

PVR Limited is a leading film exhibition company based in India. The company was founded in 1997
and has since grown to become one of the largest cinema chains in India, with over 800 screens in more
than 175 cinemas across the country.

PVR operates cinemas under several brands, including PVR Cinemas, PVR Pictures, PVR Director’s
Cut, PVR Talkies, and PVR Playhouse. The company is known for its high-quality cinema experience,
offering state-of-the-art technology, comfortable seating, and a wide range of food and beverage
options.

In addition to film exhibition, PVR is also involved in film distribution and production through its
subsidiary, PVR Pictures. The company has distributed several successful Bollywood films, including
“Tanu Weds Manu Returns,” “Dangal,” and “Baahubali: The Conclusion,” among others. PVR Pictures
has also produced several films, such as “The Lunchbox,” “NH10,” and “Drishyam,” among others.

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12) Inox Leisure Limited

INOX Leisure Limited is a leading film exhibition company based in India. The company was founded
in 1999 and has since grown to become one of the largest cinema chains in India, with over 150
multiplexes and more than 650 screens across the country.

42
INOX operates cinemas under several brands, including INOX, INOX INSIGNIA, and INOX
Megaplex.

The company is known for its luxurious cinema experience, offering state-of-the-art technology,
comfortable seating, and a wide range of food and beverage options.

In addition to film exhibition, INOX is also involved in film distribution and production through its
subsidiary, INOX Leisure International Limited. The company has distributed several successful
Bollywood films, including “Kabir Singh,” “War,” and “Dabangg 3,” among others. INOX has also
produced several films, such as “Kai Po Che!,” “The Lunchbox,” and “Mere Brother Ki Dulhan,”
among others.

13) Carnival Cinemas

Carnival Cinemas is a film exhibition company based in India. The company was founded in 2010 and
has since grown to become one of the largest cinema chains in India, with over 400 screens across the
country.

Carnival Cinemas operates cinemas under several brands, including Carnival Cinemas, Glitz Cinemas,
and IMAX, among others. The company is known for its affordable cinema experience, offering a wide
range of films and concession options at reasonable prices.

In addition to film exhibition, Carnival Cinemas is also involved in film distribution and production
through its subsidiary, Carnival Motion Pictures. The company has distributed several successful
Bollywood films, including “Baahubali: The Beginning,” “Bajrangi Bhaijaan,” and “Dangal,” among
others. Carnival Motion Pictures has also produced several films, such as “Karsandas Pay and Use,”
“Days of Tafree,” and “Viraam,” among others.

D. Actual case of merger of Zee Entertainment Enterprises and Sony Pictures

Entertainment (As of 25th August 2023)
Introduction to the merger case

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In the ever-evolving landscape of the media and entertainment industry, mergers and acquisitions are
no strangers to controversy and complexity. The merger between Zee Entertainment Enterprises
Limited (ZEE) and Sony Group Corporation (SGC) is a recent case study that highlights the intricate
dance between regulatory scrutiny, stakeholder interests, and market dynamics. This article traces the
trajectory of the Zee-Sony merger, from its inception to the eventual challenge in the National
Company Law Tribunal (NCLT) and the favorable order that paved the way for its realization.

A Landmark Merger

The proposed merger between ZEE and SGC garnered significant attention due to its potential to
reshape India's broadcasting sector. With a vision to create the largest television broadcaster in India,
the merger promised a synergy of content production, distribution, and broadcasting capabilities. The
Competition Commission of India (CCI), responsible for ensuring fair competition, raised initial
concerns over market concentration in certain segments. The parties' proactive response to these
concerns was pivotal in obtaining a phase one clearance from the CCI vide order dated October 4,
2022.

The CCI's main areas of concern revolved around the parties' dominant presence in TV channel supply
and advertising airtime markets. The fear of reduced bargaining power for advertisers and downstream
partners like distribution platform operators (DPOs) triggered alarms. To address these concerns, the
parties devised voluntary remedies, including the divestment of select TV channels. The parties'
concerted efforts to demonstrate that their merger would not hinder fair competition played a crucial
role in gaining CCI's approval.

The NCLT Challenge

Despite the CCI's green light, the journey towards the merger's completion encountered a significant
obstacle in the form of creditors' objections. Creditors such as Axis Finance, JC Flower Asset
Reconstruction, IDBI Bank, and others raised concerns about ZEE's alleged default on loans and
misuse of funds. The creditors' objections were twofold:

Non-Compete Fee

One of the key objections pertained to the non-compete fee associated with the merger, a complex
arrangement that sparked heated debates during the National Company Law Tribunal (NCLT)
proceedings. The objection revolved around a non-compete fee of USD equivalent to INR
1,101,30,91,800 (Indian Rupees Eleven Hundred and One Crore Thirty Lakh Ninety-One Thousand
and Eight Hundred). This fee was stipulated to be payable by SPE Mauritius Investment Limited, a
Sony group entity, to Essel Mauritius. The funds from this non-compete fee were intended to be used
either for Essel Mauritius to subscribe to its portion of the Essel Subscription Shares or paid to Essel
Mauritius SPV for the same purpose. This intricate arrangement was part of the broader non-compete
agreement involving key individuals and entities.

The contention put forth by the objecting creditors was that this non-compete arrangement was, in fact,

44
a cleverly disguised mechanism to disadvantage lenders and public shareholders of Zee Entertainment
Enterprises Limited (ZEE). The argument was that if the non-compete fee wasn't allocated to the
promoters, the substantial amount of INR 1,101,30,91,800 would have rightfully belonged to ZEE's
shareholders. This, they argued, could have been utilized to recover the outstanding dues owed to the
creditors.

The essence of the objection lay in the alleged dubious nature of the non-compete fee arrangement.
Creditors questioned the legitimacy and fairness of this arrangement, suggesting that it was structured
in a way that potentially diverted significant funds from the company and its shareholders to the
promoters' benefit. These objections were lodged on the grounds that the merger would negatively
impact their interests. The NCLT was tasked with weighing these objections against the potential
benefits of the merger.

Appointment: This challenge revolved around the appointment of Mr. Punit Goenka as Managing
Director and CEO for a five-year term following the scheme's implementation. The intricacies of this
appointment, alongside recent developments involving regulatory authorities, added layers of
complexity to the NCLT's deliberations.

The appointed Managing Director and CEO position was envisioned to be held by Mr. Punit Goenka, a
key figure in the Zee Entertainment Enterprises Limited (ZEEL) landscape. However, this proposition
faced strong opposition from creditors who pointed to a recent interim order issued by the Securities
and Exchange Board of India (SEBI). This order, issued on June 12, 2023, restrained both Mr. Punit
Goenka and Mr. Subhash Chandra from assuming any key managerial positions in listed companies or
their subsidiaries. The order was rooted in allegations of financial irregularities purportedly committed
through entities within the Essel Group.

The crux of the creditors' argument rested on the premise that the appointment of Mr. Punit Goenka as
CEO of the merged Zee-Sony entity should not proceed due to the ongoing regulatory scrutiny. The
SEBI order, they asserted, cast a shadow of uncertainty over the eligibility of Mr. Punit Goenka to hold
such a position within a listed company.

The petitioners further emphasized that both Mr. Subhash Chandra and Mr. Punit Goenka had appealed
the SEBI order but were denied a stay by the Securities Appellate Tribunal, underscoring the urgency
and sensitivity of the matter.

NCLT Findings and Observations

In a process laden with legal intricacies, stakeholder interests, and regulatory obligations, the NCLT's
findings and observations illuminated the legal landscape surrounding the Sony-Zee merger and the
balance between corporate ambitions and regulatory compliance. The NCLT's detailed findings and
observations are as follows:

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 1) Stakeholder Claims and Privity of Contract-The NCLT's analysis commenced by
scrutinizing the objectors who raised concerns against the merger. It was highlighted that none
of the objectors were direct creditors of Zee Entertainment Enterprises Limited (ZEE) nor had
any privity of contract with ZEE. Instead, the claims of these objectors stemmed from their
dealings with other entities within the Essel Group. This distinction was paramount in
understanding the legal standing of the objectors in the context of the Sony-Zee merger.
2) Legal Disputes and Disputed Claims- The NCLT's observations extended to the nature of the
claims themselves. Among the objectors, JC Flower's claim, arising from being the assignee of
Yes Bank, was built upon a letter of comfort given by Dr. Subhash Chandra. The tribunal
questioned the rationale behind lending a substantial amount based on a mere letter of comfort,
which was distinct from a guarantee under legal norms. Moreover, the NCLT noted that certain
claims were in dispute and pending before various courts and tribunals, further complicating the
objectors' standing.
3) Statutory Requirements and Objection Criteria- The NCLT's analysis extended to the
statutory framework governing objections to schemes of arrangement under Section 230 3 of the
Companies Act, 2013 and law laid down in the cases of Emco Ltd. 4, Astorn Research Ltd.5 and
Mayfair Ltd.6 which stipulates that to object to a scheme, the objector must be a creditor, and
their claim should not be disputed. The tribunal found that none of the objectors satisfied these
requirements.
4) Commercial Wisdom and Shareholder Approval- The NCLT also acknowledged the
principle of commercial wisdom exercised by shareholders in approving a scheme of
arrangement as per the law laid down by the Hon'ble Supreme Court in Miheer Mafatlal V.
Mafatlal Industries7. The fact that 99.997% of ZEE's shareholders approved the scheme was a
significant factor in the NCLT's analysis. The tribunal highlighted that it has limited jurisdiction
to interfere with the shareholders' commercial wisdom unless the scheme is deemed
unconscionable, illegal, unfair, or unjust.
5) Separate Legal Entities and Asset Transfer- The NCLT's observations recognized the distinct
legal status of each entity within the Essel Group. It was emphasized that ZEE's assets and
liabilities would merge with the new entity, ensuring the lenders' rights to recovery were not
compromised. The scheme's provisions facilitated the transfer of debts, borrowings, and
liabilities to the merged entity, underscoring the continuity of rights and obligations.

The NCLT's findings in the Sony-Zee merger deal underscore the significance of legal precision,
regulatory compliance, and the principles of corporate governance in complex business transactions. As
the merger journey advances, the NCLT's role in assessing objections demonstrates the importance of a
fair and transparent legal process in shaping the landscape of corporate consolidation and
transformation.

The NCLT's deliberations culminated in a verdict that held immense implications for both ZEE and
SGC. The tribunal acknowledged the creditors' objections but ultimately dismissed them, ruling in
favour of the merger vide order dated August 10, 2023.

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Conclusion: Lessons from the Zee Entertainment Enterprises-Sony Pictures Entertainment
Merger

The journey of the Zee-Sony merger is a testament to the complexity of mergers in the media and
entertainment sector. It underscores the importance of proactive engagement with regulatory bodies and
the need to address concerns through voluntary remedies. The NCLT's final approval exemplifies the
delicate balance between stakeholder interests and market competition which was grounded in the
belief that the merger would serve the best interests of ZEE's stakeholders, creditors, and employees.
This decision was a pivotal moment, as it signalled the alignment of legal considerations with the
merger's strategic promise.

As the media landscape continues to evolve, the Zee-Sony merger serves as a valuable case study for
future mergers and acquisitions in the sector – a reminder that strategic vision, regulatory compliance,
and stakeholder alignment are key to overcoming challenges and achieving success.

E. Financials of Zee Entertainment Enterprises Limited

a. Income Statement (Quarterly)

b. Analysis of Income statement (Quarterly)

1. Revenue Growth: Zee Entertainment's revenue has been growing steadily over the past year,
with a significant increase in the latest quarter (June 2023). FY 22-23 also shows a healthy
growth in revenue.

47
 2. Other Income: Other income has been somewhat inconsistent, but it has shown an increase in
the latest quarter. It can be an important supplementary source of income for the company.
3. Total Income: Total income has followed the trend of revenue, showing steady growth,
particularly in the latest quarter and the fiscal year.
4. Expenditure: Expenditure has been increasing, which is expected as the company grows.
However, it's important to manage expenditure effectively to maintain profitability.
5. Interest Expenses: Interest expenses have reduced over time, which is a positive sign. Lower
interest expenses can improve profitability.
6. Profit Before Depreciation and Tax (PBDT): PBDT has shown positive growth over time,
with a significant increase in the latest quarter. This indicates the company's operational
performance is improving.
7. Depreciation: Depreciation is a non-cash expense, but it's essential to consider. It has been
relatively stable and doesn't show any concerning trends.
8. Profit Before Tax (PBT): PBT has been improving steadily, with a significant increase in the
latest quarter. The company is generating more profit before accounting for taxes and interest
expenses.
9. Taxation: Tax expenses have been fluctuating, but it's important to note that the latest quarter
(June 2023) showed positive profit after tax.
10. Net Profit: The company has experienced negative net profits in some quarters, but it turned
positive in June 2023. The profitability has improved over time, and FY 22-23 shows positive
net profit.
11. Earnings Per Share (EPS): The earnings per share is positive in all quarters except for March
2023. This indicates that shareholders are likely to receive earnings per share.
12. Cash Earnings Per Share (CEPS): CEPS is a measure of how much cash the business is
generating. It is positive in all quarters, indicating that the company is generating cash even
when it reports negative net profits.
13. Operating Profit Margin (OPM): The operating profit margin has shown some fluctuations,
but it's essential to note the positive trend in June 2023. The company's operational efficiency is
improving.
14. Net Profit Margin (NPM): The net profit margin also shows a positive trend. The latest
quarter, June 2023, indicates that the company is effectively turning its revenue into profit.

In summary, Zee Entertainment Enterprise Limited's financials have been improving, with
revenue, profitability, and operational efficiency showing positive trends. However, it's
important to keep monitoring expenditure and tax expenses to ensure sustainable growth. The
positive EPS and CEPS suggest that the company is generating returns for its shareholders and
positive cash flows.

c. Income Statement (Annual)

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d. Analysis of Income Statement (Annual)

1. Revenue: The company's revenue has remained relatively stable over the last five years, with a
slight decline in 2021 and 2022 but a recovery in 2023. This suggests that the company's core
operations have been consistent.
2. Other Income: Other income has varied over the years, with a significant increase in 2023. This
could be due to various non-operating income sources, such as investments or one-time gains.
3. Total Income: Total income, which includes both revenue and other income, has shown a
positive trend, reaching its highest point in 2023. This indicates that the company is effectively
supplementing its revenue with other sources of income.
4. Expenditure: Expenditure has generally increased over the years, indicating the company's
growth and investment in its operations.
5. Interest Expenses: Interest expenses have also fluctuated but have been relatively low compared
to other expenses.
6. Profit Before Depreciation and Tax (PBDT): The PBDT has been fluctuating but showed
significant improvement in 2023. This suggests that the company has been able to generate
more profit from its operations.
7. Depreciation: Depreciation expenses have been relatively stable and have not shown any
concerning trends.
8. Profit Before Tax (PBT): PBT has also shown fluctuations but improved significantly in 2023,
indicating a stronger performance in terms of profitability.
9. Taxation: Tax expenses have fluctuated but remained negative in most years, which means the
company has received tax benefits, likely due to deferred tax assets or other tax advantages.

49
 10. Net Profit: The net profit has been positive in all years, with the highest point in 2023. The
company has consistently generated profits.
11. Earnings Per Share (EPS): EPS has been positive in all years, with a significant increase in
2023. This indicates that shareholders are earning more per share.
12. Cash Earnings Per Share (CEPS): CEPS, which represents the cash generated by the
business, has also increased significantly in 2023. This suggests the company is generating
more cash.
13. Operating Profit Margin (OPM %): The operating profit margin has shown fluctuations but
is relatively healthy. It dipped in 2021 and 2022 but recovered in 2023. This indicates the
company's ability to manage operational costs.
14. Net Profit Margin (NPM %): The net profit margin has shown fluctuations but improved
significantly in 2023, indicating the company's ability to convert revenue into profit.

In summary, Zee Entertainment Enterprise Limited has shown overall positive financial performance,
with improvements in revenue, profitability, and other income in 2023. The company has effectively
managed its operations, generating positive net profits and cash flows. However, it's important to
monitor expenditure, especially as the company grows, to ensure profitability remains consistent. The
positive EPS and CEPS suggest that shareholders are benefiting from the company's performance.

Chapter 7

References

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www.investopedia.org

www.ibef.org

www.bseindia.com

www.moneycontrol.com

www.economicstimes.indiatimes.com

www.businessstandard.com

www.linkedin.com

www.thehindubusinessline.com

www.investindia.gov.in

www.angelone.in

www.deshicompanies.com

www.wikidata.com

www.icicidirect.com

www.finance.yahoo.com

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 Summer Internship Progress Report
Name of the Student: Chirag Prashant Kudchadkar

Name of the Organization: AngelOne

(placed for summer internship)

Area of Specialization: Finance

Reporting Head/ Mentor in the Organization: Mamta Sharma

Name of the Internal Guide (Institute): Prof Siddesh Soman

Title of the project: A study of Zee and Sony merger

Duration of the project: 2 months

Progress Report:

Sr. No Date Particulars/ Progress Guide’s Student’s

Signature Signature
1 30/05/2023 Executive Summary
2 01/06/2023 Industry Analysis
3 12/06/2023 About Company
4 26/06/2023 On the Job Training
5 11/07/2023 Literature review
6 19/07/2023 Data Analysis

Authorized Signatory Student’s Signature

DR VN BRIMS/REC/PLC/IPR/16

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