Thursday, June 28, 2012

Zee Learn Stake Upped by Orange

Sumeet Mehta, CEO, Zee Learn Ltd, with
Subhash Chandra, Founder, Zee Group.

By Special Correspondent:
01:40 AM, Thursday, 28th June 2012

Zee learn Ltd (BSE: 533287, NSE: ZEELEARN) counter in NSE, on Wednesday, saw a significant buy of 13.32 lakh shares by the FII sub-account, Orange Mauritius Investments Ltd.

The deal, which was an accumulation for Orange, was disclosed at National Stock Exchange after trading hours on Wednesday.

Orange Mauritius Investments’ buy amounted to 0.51% stake in Zee Learn, and was executed at Rs. 23 a share, making the deal worth Rs. 3.06 crore. 

Orange Mauritius is an FII sub-account registered under the London-based and India focused FII, First International Group Plc.

This FII has been one of the largest non-promoter shareholders in Zee Learn, an education company promoted by Subhash Chandra led Essel/Zee Group.

As per the latest available Share Holding Pattern, for Q4, Orange Mauritius held a 2.30% stake in Zee Learn. However, it had upped its stake significantly in the current Q1 quarter, when in late April it picked up 28.68 lakh shares or 1.09% stake.

While the April buy by Orange was against an identical sell by another large holder, Oppenheimer Developing Market Fund; on Wednesday, there were no identifiable sellers offloading more than 0.50% stake.

If the FII hasn’t transacted in the counter since Q4 end, except for these two buys, it now holds 3.90% stake in Zee Learn, which makes it the largest non-promoter shareholder, ahead of Reliance Capital Trustee Company, Life Insurance Corporation of India, and Oppenheimer.

The stock has been on a major upward trajectory since touching its 52-Week Low of Rs. 11.80 during December end. By early June it had marked a 52-Week High of Rs. 24.50 – thereby not only outperforming the market, but more than doubling in value within just over 5 months.

On the fundamental side, Zee Learn’s low equity base of Rs. 26.27 crore has played to its advantage, whereas its high promoter stake of 73.19% is giving the much needed confidence to investors in this small-cap.

However, the company is yet to turnaround convincingly, with it concluding FY’12 with consolidated revenue of Rs. 61 crore, but consolidated bottomline being a net loss of Rs. 27.62 crore. 

Zee Learn’s core activity is running schools, and it is home for brands like K-12 chain Mount Litera Zee Schools and the pre-school network Kidzee. The high potential of this field as well as the management by the Essel/Zee conglomerate are pluses for this stock, which was created by the demerger of the education division from the group’s flagship, Zee Entertainment Enterprises Ltd.

The company which has been hitherto more noted for its operations in the pre-school premium segment is now on an expansion spree, and is looking to expand in the lucrative 10+2 segment, as well as get into the mass education sector through a Public Private Partnership (PPP) model. Zee Learn is also looking at various funding sources for this expansion.

Due to the sharp run-up in the stock price during last few weeks, Zee Learn stock might take a brief breather for now, and further cues will come from the Q1 financial results.

On Wednesday, Zee Learn closed trade in NSE at Rs. 23.95, up by 4.81%.