Shemaroo Entertainment Limited has initiated a postal ballot process to seek shareholder approval for a preferential share allotment to its promoters and promoter group members. The company has engaged National Securities Depositories Ltd. as the authorized agency to provide e-voting facilities for this corporate action.

E-Voting Schedule and Process

The remote e-voting process has been structured with specific timelines for shareholder participation:

The postal ballot notice is being sent only through electronic mode to members whose email addresses are registered with the company or depositories, in compliance with Ministry of Corporate Affairs circulars.

Preferential Share Allotment Details

The company proposes to issue 14,10,000 equity shares of face value Rs. 10/- each at Rs. 110/- per share, including a premium of Rs. 100/- per share. The total aggregate consideration amounts to Rs. 15,51,00,000/-.

Purpose and Financial Impact

The preferential issue is being undertaken towards part repayment and appropriation of existing unsecured loans provided by the promoters and promoter group members. The company has outstanding unsecured debt totaling Rs. 33,85,30,000/- from these proposed allottees, of which Rs. 15,51,00,000/- will be appropriated through this equity conversion.

This debt-to-equity conversion will strengthen the company's financial position by reducing liabilities and increasing net worth without any actual fund inflow or outflow.

Shareholding Pattern Impact

Post-allotment, the promoter and promoter group shareholding will increase from 65.53% to 67.24% of the total share capital. The public shareholding will correspondingly decrease from 34.46% to 32.76%.

Regulatory Compliance

The preferential issue is being conducted in accordance with Section 62 read with Section 42 of the Companies Act, 2013, and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The relevant date for pricing purposes is Wednesday, February 11, 2026, being 30 days prior to the proposed date of passing the special resolution.

The issue price of Rs. 110/- per share is above the floor price of Rs. 109.27 calculated as per SEBI ICDR Regulations based on the 90-day volume weighted average price. The allotted shares will be subject to lock-in provisions as prescribed under SEBI regulations and will rank pari-passu with existing equity shares upon listing on BSE and NSE.

Shemaroo Entertainment released its earnings conference call transcript for Q3FY26, revealing mixed performance amid ongoing market challenges. The company reported revenue of ₹161 crores for the quarter with significant losses, while digital segments showed promising growth trends.

Financial Performance Overview

The company's financial results for Q3FY26 reflected the challenging market environment. Revenue from operations declined marginally by 2% year-on-year, while the company reported substantial losses due to ongoing inventory charge-offs.

For the nine-month period, revenue from operations stood at ₹444 crores, declining 8% year-on-year, with EBITDA loss of ₹178 crores and net loss of ₹147 crores.

Strategic Inventory Management

CEO Hiren Gada highlighted the company's strategic inventory reduction initiative, now in its eighth quarter. The inventory has been reduced from ₹727 crores in December 2023 to ₹417 crores in the current quarter. New initiatives expenses for Q3FY26 amounted to ₹34 crores, and adjusting for this investment, the EBITDA loss from existing operations would have been ₹33 crores.

Digital Business Growth

Despite traditional media challenges, the digital segment demonstrated robust performance. Digital media revenues grew 14% year-on-year to ₹81 crores in Q3FY26. The company's YouTube presence continued expanding, with Shemaroo Film Gaane surpassing 74 million subscribers and Shemaroo Entertainment crossing 61 million subscribers. The entire portfolio garnered over 9.5 billion views during the quarter.

Market Challenges and Outlook

COO Arghya Chakravarty noted that traditional businesses faced pressure from the re-entry of major broadcasters on free-dish, packed sports calendar, and continued FMCG advertising softness. However, management expressed cautious optimism about FMCG advertising recovery in coming quarters as GST rate cut impacts stabilize.

CFO Amit Haria reported current debt levels at ₹310 crores for nine months FY26, with management expecting stabilization around current levels. The company anticipates the inventory charge-off exercise to conclude by March 2026, positioning for improved operational performance in the next financial year.