Rakesh Jhunjhunwala has picked up nearly 5 million shares of Zee Entertainment Enterprises Ltd for ₹110.22 crore in a block deal, showed NSE data. The ace investor picked up the 0.52% stake at ₹220.44 apiece through his investment arm Rare Enterprises.

According to the NSE, in a separate deal, BofA Securities Europe SA bought 4.86 million Zee Entertainment shares for ₹115 crore at ₹236.20 apiece. As of June, BofA Securities held a 1.03% stake in Zee.

On Tuesday, shares of Zee Entertainment jumped nearly 40% after investors sought the removal of its three directors, including its chief executive. Invesco Developing Markets Fund and OFI Global China Fund LLC, with a combined 17.9% stake in the company, called for an extraordinary general meeting of shareholders to remove Punit Goenka, Manish Chokhani and Ashok Kurien from the board.

Subsequently, Kurien and Chokhani put in their papers.

Other Subhash Chandra-led group firms also rallied. Shares of Zee Learn rose by 20%, SITI Networks by 3.2% and Zee Media Corp. by 4.5%, while MT Educare and Dish TV India rose 10% each.

“Corporate governance was the biggest roadblock for Zee Ltd, where the recent developments around the removal of directors and its promoters are changing sentiments for group companies. Zee has a big brand and network along with strong operations where the only concern was management," said Santosh Meena, head of research, Swastika Investmart.

The stock is trading at very attractive valuations and is one of the most preferred by foreign institutional investors in the media space. If there is any change in promoter holdings, we may see a big re-rating as we had seen earlier with CG Power, he said. “Zee has rallied today, but we may see a big upside if there is a change in management. Aggressive investors can bet on this stock but must avoid other group firms as there are concerns over performance," he said.

Makarand Joshi, founding partner, MMJC and Associates LLP, a corporate compliance firm, said Zee Entertainment’s governance issue is a wake-up call for board members and C-suite executives of India Inc.

“They must effectively play the role of trusteeship over ownership and avoid extending unreasonable financial support to group firms. Moreover, when Zee’s financial performance does not reflect well, the promoter director cannot take benefits of raising their own salaries," he added.