Zee Entertainment Enterprises Ltd (ZEEL) raised an initial Rs 660 crore by allotting 209.4 million fully convertible warrants to promoter group entity Sunbright Mauritius Investments Ltd at Rs 126 apiece.The exercise was undertaken by the company’s preferential issue and allotment committee Friday, following approvals from the board, shareholders, stock exchanges and the Securities Appellate Tribunal (SAT)Sunbright has paid 25% of the issue price, or Rs 31.50 per warrant, upfront, with the balance Rs 94.5 per warrant payable at the time of full conversion. The warrants can be converted in one or more tranches within 18 months of allotment.On full conversion, the 209.4 million shares would represent 17.91% of ZEEL’s expanded share capital. This would boost the company’s promoter group holding to about 21.9% from 3.99% currently, according to a regulatory filing.The allotment has an aggregate value of about Rs 2,639 crore, or 84% of the Rs 3,144 crore preferential issue approved by shareholders.Zee didn’t say why the number of warrants allotted was less than the maximum issue size approved by shareholders. The company hasn’t announced further allotment under the approved warrant issue so far.The company said its paid-up share capital would remain unchanged till the warrants are converted into equity shares.Terming it a positive development for the stock, Abneesh Roy, executive director, research) at Nuvama Institutional Equities, said it cleared the prolonged fundraise overhang due to the regulatory proceedings. He also noted that the allotment was smaller than the size approved by shareholders.Roy said ZEEL had received Rs 660 crore upfront, while the remaining about Rs 1,980 crore would be payable only upon conversion. Since conversion can take place in one or more tranches over 18 months, the balance capital could come in by February 2028.The allotment comes against the backdrop of regulatory proceedings involving promoter-group entities. On July 31, the Securities and Exchange Board of India (Sebi) barred ZEEL from accessing the securities market for two months and founder Subhash Chandra and CEO Punit Goenka for one year each.Sebi also imposed penalties in a case concerning the alleged unauthorised pledge of the company’s Hyderabad property as security for loans taken by promoter-linked entities.ZEEL and Goenka subsequently approached SAT. The tribunal allowed the proposed warrant issue to proceed as interim relief, subject to conditions including deposit of the penalties imposed by Sebi. The underlying regulatory proceedings remain subject to appeal.ZEEL shareholders had on July 31 approved the preferential issue of convertible warrants to the promoter group, with 76.64% of votes cast in favour of the resolution.