MUMBAI: Subhash Chandra couldn't have hoped for a better start to the first day's trading of Zee Telefilm's demerged entity. Zee Entertainment Ltd, which also temporarily houses the direct-to-home (DTH) business, opened on Monday at Rs 249 on the BSE, touched a high of Rs 297.80, before closing the day at Rs 272.20 with 3.45 million shares changing hands at the counter.

On the NSE, the scrip opened at Rs 275 and closed marginally lower at Rs 273. "This was more or less in line with the market expectations. Though the scrip fell 20 per cent from the previous close of Rs 341, this was the first day's trading of the demerged entity. The stock witnessed heavy trading," a market analyst said.

Zee's other two demerged entities - Wire & Wireless India Ltd. (WWIL) and Zee News Ltd. (ZNL) - would get listed independently, after relevant approvals from the stock exchanges. Listing is likely in January 2007.
The process of getting approval of Zee's DTH business under Dish TV is underway. A separate record date for the demerger of Dish TV will be announced. Till then, Zee Entertainment Ltd will include Dish TV while trading on the stock exchanges.

"The value of both the companies is embedded in the current scrip price. Investors, after all, will get shares in Dish TV when it is demerged," said an analyst in a stock broking firm.

After Dish TV gets listed, Zee Entertainment Ltd could see a drop in price. "But the sum of parts will be higher than the current level. We see it somewhere in the Rs 320-330 range," the analyst said.

Zee TV's ratings are also going up and as the second largest general entertainment channel, it will be able to exploit advertising revenues which should get more properly reflected in the next fiscal, the analyst added.