Phantom Digital Effects Limited received an Administrative Warning Letter from the Securities and Exchange Board of India (SEBI) on May 25, 2026, addressing non-compliance with Qualified Institutional Placement (QIP) allotment requirements during the financial year 2025-26. The regulator identified that two proposed allottees, who were related or group entities, should have been treated as a single allottee under Regulation 180(1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. This classification resulted in a breach of the minimum allottee requirement prescribed in the regulation.

The proposed allotment was part of a QIP tranche approved by the Board of Directors on May 8, 2025. During the process of obtaining listing approval from the stock exchange, the relationship between the allottees was identified. Upon being informed by the exchange, the company voluntarily withdrew and nullified the allotment via a Board Resolution dated May 9, 2025. The company informed the stock exchange of this withdrawal on the same day, ensuring that no securities were ultimately allotted pursuant to the tranche and that no funds remained with the company.

SEBI’s letter does not impose any monetary penalty or operational restrictions on the company. Phantom Digital Effects stated that there was no loss caused to investors or shareholders as a result of the issue. The company acknowledged the observations and committed to strengthening its internal compliance review and due diligence mechanisms to ensure strict adherence to regulatory provisions in the future.

The disclosure was submitted to the National Stock Exchange of India Limited on May 26, 2026, following an internal review of disclosure requirements under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The matter will be placed before the Board of Directors in the ensuing meeting for noting.

Key Timeline of Events

Phantom Digital Effects Limited has revised the pricing and structure of its proposed preferential issue of Compulsorily Convertible Debentures (CCDs) to Zee Entertainment Enterprises Limited following observations by the National Stock Exchange of India Limited (NSE). The company corrected the relevant date from April 14, 2026, a non-trading day, to April 13, 2026, necessitating adjustments to the issue price and the number of securities to be issued. The aggregate issue size stands at ₹115,70,36,340.

The revisions were submitted to the NSE on May 24, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company clarified that the valuation report required under SEBI ICDR Regulations was obtained prior to the dispatch of the shareholder notice but was inadvertently omitted from earlier disclosures. It also confirmed that it is not categorised as a fraudulent borrower, wilful defaulter, or fugitive economic offender by any regulatory authority.

The revised issue parameters include an issue price of ₹213.93 per CCD, comprising a face value of ₹10 and a securities premium of ₹203.93. The company will issue up to 54,08,481 CCDs. The timeline for utilisation of proceeds, previously indicated as 12 months, will be reckoned from the date of allotment of the CCDs based on the estimated implementation schedule.

The company also corrected a discrepancy regarding the total utilisation amount, aligning it precisely with the exact issue size of ₹11,570.363 lakh. Upon full conversion of the CCDs, Zee Entertainment Enterprises Limited will hold approximately 24.89% of the post-issue paid-up equity share capital on a fully diluted basis. This stake is below the 25% threshold that would trigger an open offer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

The revised shareholding pattern reflects the conversion of outstanding warrants allotted to the promoter and the allotment of CCDs to the proposed allottee. Promoter holding will decrease to 34.05% post-issue, while public shareholding will increase to 65.95%. All revised disclosures have been given retrospective effect in the notices circulated to shareholders.