The Zee Telefilms stock has seen a lot of activity over the past two days. Positive for a change. Compared to the 15 million or so trade two days ago, 32.3 million shares were traded yesterday and 1.1 million today. Two days ago, there were more sellers than buyers which led to a collapse in the ZTL share price from Rs 136 to Rs 114 and then to Rs 105.50 yesterday. This started off a wave of panic in the investment community.

Since then, the ZTL scrip has been on a recovery path. The share climbed to close at Rs 138 by the time trading ended today. The reason: Solomon Smith Barney (SSB) has put a buy recommendation on the stock. It says the share will hit the Rs 273 mark by end this year.

SSB has forecast a 45 per cent compounded annual earnings growth for ZTL between financial year 2000 and financial year 2002. The rapid growth is expected after the conversion of its flagship channel Zee TV into a basic pay channel as it is expected to be encrypted some time in April this year.

According to an analyst with a leading securities firm: "The market has already discounted the Budget effect and the results that ZTL is expected to report in the last quarter, so at this level we recommend that investors buy into the stock. It is attractive even at a price of Rs 170-175 (it yields a price-earning ratio of 27-28). In the previous quarter of this year it had a net profit of Rs 470 million; in the last quarter of last year, the net profit was Rs 260 million. We expect the net profit for Q4 this year to be somewhere between these two extremes, even if if Zee TV‘s performance has deteriorated as compared to last year. This will take the price to upper side."

The SSB prediction is the opposite of a recommendation made on 3 March by Goldman Sachs which has downgraded this stock. In its report, it has has lowered the estimates for Zee‘s earnings per share for 2002 from Rs 6.84 to Rs 6.31 and in fiscal 2003 from Rs 9.98 to Rs 9.1. This warning actually led to the slide in the share price and it shed 15.99 per cent on that day.

The scrip has clipped off over 90 per cent of its value (from its all time high of Rs 1600 in Feb 2000 ) over the last 10 months after its share split while the Sensex has shed 33% of its value. Still it is considered as a market out-performer by some analysts.

Adding to the uneasiness about the share is the buzz that an overseas corporate body is offloading ZTL stock. Zee Telefilms has denied that it or its promoter chairman Subhash Chandra is behind any of the selling.

Century Direct Fund (CDF) of Mauritius LLC, which currently holds 18.42 per cent equity stakes in United Studios Ltd, will be increasing its stake by another one percent as TCFC Finance Ltd is selling out its stake in United Studios.United Studios Ltd is a company under the umbrella of Unilazer group. Other group companies include United Teleshopping, United TV (UTV), a TV software production organisation, and UTV Interactive which is a wholly-owned susbidiary of UTV.

TCFC Finance Ltd held 71,000 equity shares constituting 0.77 per cent of the current paid up capital of United Studios. The investmend had been made as co-investor along with CDF to which TCFC was an advisor.

As a result of a restructuring of the operations of TCFC Finance, it has ceased to be an advisor to CDF and has agreed to sell its investment in United Studios to Century Direct Fund.

The Foreign Investment Promotion Board (FIPB) approved United Studios proposal recently. The other foreign shareholder in United Studios is Mitsui group of Japan which holds 18,49,990 shares aggregating to 20 per cent of the total paid up equity capital of the company.

Total foreign equity in United Studios amount to 38.42 per cent amounting to 35,54,000 equity shares of Rs 10 each.

Earlier, the government had given permission for foreign direct investment in United Studios subject to:

*All future laws on broadcasting will be applicable to United Studios and it will not claim any privilege or protection by virtue of prior approval.
*The company will not undertake any broadcasting from Indian soil unless specially permitted to do so by the government.
* There will be no obligation on the part of Doordarshan to buy TV software from the joint venture company, United Studios.

Earlier this year, Intel Pacific and GE Capital Mauritius Equity Investment picked up 12.86 and 6.98 per cent, respectively in United Teleshopping & Marketing Co. Ltd. Subsequently, the foreign equity in United Teleshopping has increased from 45.45 to 57.14 per cent amounting to Rs 360 lakh. United Teleshopping is in the process of issuing fresh equity of 13,50,000 shares of Rs 10 each in the revised paid up capital of Rs 630.07 lakh which will be subscribed as follows:

* Draper India International Mauritius-- 17.86 per cent
* Walden-Nikko Mauritius Company, Mauritius-- 19.44 per cent
* Intel Pacific Incorporation, USA -- 12.86 per cent
* GE Capital Mauritius Equity Investment --6.98 per cent.

Last year, UTV promoters had decided to buyout Rupert Murdoch-controlled News Corp‘s 37 per cent equity stake in the Indian media house. Part of the additional funding for this News Corp shareholding buyback came from FII, Warburg Pincus.

POW (Prisoner of War), Zee TV‘s foray into the brave new world of reality TV, draws its inspiration from the British produced show Jailbreak, which aired in September 2000.

While Zee asserts that POW is a concept developed specially for Indian audiences, a closer look at Jailbreak should give some idea of what the public can expect from POW.

The format in Jailbreak was that there were five men and five women prisoners, making up what was called the Jailbreak Ten. The ten came from diverse backgrounds with their individual personalities and experiences, and had never met before being selected as one of the prisoners. Zee plans to have nine "POWs" who will form the prison team.

If any of the ten were unable to continue, there were four standby contestants, one of whom replaced the unfortunate prisoner.

Jailbreak prison was a specially constructed state-of-the-art prison complex, and run on exactly the same lines as a real prison. Inmates had real prison food, genuine prison activities and regimes, had to endure normal prison exercise programmes and curfew hours, and cope with real prison-level showers and sanitary conditions. However, instead of regulation prison cells, Jailbreak inmates slept in two dormitories, for male and female inmates: unless, of course, they happened to be in solitary for breaking the rules.

Working from the outside trying to help the inmates escape was the escape committee which left five messages daily which the "prisoners" could access. In addition there were visits from family and friends every Saturday.

From a total of over 30 webcams, at least five were always available, showing the latest from inside the prison.

The selection process for Jailbreak was organised over several months. A team of researchers set out to find ten members of the public from different walks of life, each capable of using their own lifeskills and talents to meet the challenge of escaping from a high-security jail. The Jailbreak selection process was deliberately undertaken to incorporate contestants of all ages and social backgrounds.

None of the inmates had any prior knowledge of the layout or design of the prison, nor did they visit it before their incarceration. Of the final round of prospective candidates, the final ten were not told that they were actually on the show until the morning of their "arrest".

There was a prize fund of ?250,000 for Jailbreak. The first prisoner to escape from the prison confines was entitled to ?100,000. The second to escape successfully could win ?50,000, and so on in decreasing order down to ?1,000 for the tenth and final escapee. Prisoners who escaped together shared the prize money, for example the three inmates who escaped first won ?33,333 each.

The fear was palpable. As trading closed on the Bombay stock exchange a chill went down the spines of media related executives as the rumour gathered pace that action was being planned against the biggest player on the Indian stock markets. The broker, who reportedly paid out advance tax of Rs 910 million sometime back, is likely to be arrested on the morning of 6 March, if the buzz is to be believed. Apparently, some documents implicating him were discovered in the locker of film financier and diamond baron Bharat Shah, who is currently in the cooler for his alleged links with the underworld.
If the gossip turns out to be true then there could be a run on the stock markets. And on media, telecom and software stocks as the broker is believed to have huge exposures to Zee Telefilms, HFCL, Global Telesystems and some say Balaji Telefilms, amongst several other stocks. That the market is wary was seen from the selling pressure on Zee, HFCL and Global Tele. Zee Telefilms crashed to a new 12 month low when it slumped to below Rs 115. HFCL and Global Tele also saw more than 16 per cent being lopped off from their share price.

Saregama India (Rs 286.95) lost 16 per, Jain Studios (down 13.75 per cent to Rs 56.90), Balaji Telefilms (Rs 205.90), Mukta Arts (Rs 171.60), Creative Eye (Rs 28.80), Padmalaya Telefilms (Rs 65.75), Cinevista Communications (Rs 68.05), Tips Industries (Rs 129.30) and Vision Tech (Rs 23.75) were media shares that went into a tizzy.

The alarm bells were ringing with the possibility of Zee TV dropping to below the Rs 100 mark should the arrest of the broker happen on 6 March. The broker has in recent times turned a seller of the Zee stock as he has got into a bit of a financial crunch on account of the take over of Global Trust Bank by the Unit Trust of India.