What are the factors that have caused the sudden downturn of the stock which was the darling of the fund managers. They chased this counter in the market with a fear of not losing the bus of country's first truly media stock.Market intermediaries unanimously feel the main reason for the downfall is the media hype the stock has created. The stock when got listed on the bourses, was the only media stock. Even today, it is the only listed media stock. "Market began to compare the Subhash Chandra-owned company Zee Telelfilms with that of Rupert Murdoch's News Television and as a result the market expectation also ran high as far as it's performance was concerned. The company which launched first private television channel in the country and entered in to the business of development of television software could satisfy the market expectation in the initial years which not only created the euphoria but lots of interest among the marketmen." said Mr Ramnath S, analyst with Taib Securities.

The company's performance was compared with the other new economy stocks, particularly stocks of software development companies which made their debut during the same period. It was the only media stock began to be quoted at very high PE ratio. Infosys Technologies and Wipro were being quoted at PE ratio of around 200 and the euphoria about the company forced the operators to take the stock at these levels. Once upon a time the interest of the market in this counter reached to such a level that the stock was being quoted at PE ratio of 400 to 450. There were all reason for the stock to reach five digit level, recalled the brokers.

Zee scrip downfall: Is media hype responsible?
The shareholding pattern of the company was such that floating stock was very limited in the market and too many fund managers including Foreign Institutional Investors (FIIs) were chasing very few shares. Every fund manager wanted the Zee stock in their portfolio and they did not wish to miss the bus of higher NAVs by not investing in this counter.

The media hype the stock created helped it to penetrate in markets as well as garner the larger share of business from the lone rival Doordarshan initially. But when it came to compete with other private channels and friends becoming foes, the struggle for the company started. The company began to expand to stem the slowdown in the advertisement revenue which came under severe pressure, said Mr Ramnath.

However, the good news is that the expansion plan of regional channels branded as Alpha (Gujarati, Marathi and Bengali) has progressed as per schedule but in course of this, it has incurred major capital expenditure and it will take another 15 to 18 months to reap the fruits of this investment, he added.

Another prudent decision it has taken is to put on hold the most ambitious project of satellite telephony Agrani. The company has realised that it is not in position to fund this project as it does not have the required cashflow.

Mr Pradeep Doshi, a BSE broker and analysts feels that company's decision to go for stock split is one of the main reason for the consistent downfall in the stock price. Rs 10 face value share of the company was divided in to 10 shares of Rs 1 face value which resulted in to more liquidity.

The problem with the company began with the deteriorating programming quality, says Mr Ramnath. Zee's dwindling fortunes has nothing to do with the success of Kaun Banega Crorepati (KBC) or Sawal Dus Crore Ka (SCDK) jointly hosted by Anupam Kher and Manisha Koirala. It is the Star Plus's aggressive marketing strategy to push it's programming. Zee not only lost to KBC but also to Sony. It began to taste the fruits of competition. In the initial years Zee was commanding premium on their ads rates but it's margins and revenue rates came under pressure after the race hot up, he added.

Though the company is hopeful of resounding come back says Mr Sainath Iyer, spokesperson of the company. "We are looking at fundamentals and that have always been strong. All Alpha channels are going strong except the the main channel but that also will regain the top slot in days to come as you'll see host of new programme this month and in the months to come. We can't comment on how market behaves" he added.

However, analysts and other market intermediaries are equally hopeful about the come back of the company in the limelight. "what it needs is at least two to three good quarterly results with improved quality of programming and the company will be back on track. Looking at the entrepreneurial vision of Mr Subhash Chandra, it is not difficult. After all he is the person who has made the once sick company Essel Packaging in to the most successful company and given the first amusement park -Esselworld-to the country on the lines of Disneyland", adds Mr Ramnath.