A piece of big news has come to light related to Bollywood's veteran producer-director Karan Johar's company Dharma Productions. It is reported that RP Sanjiv Goenka-owned music company Saregama India Limited is in talks to buy a major stake in Dharma Productions. Three people with knowledge of the matter have confirmed this. However, they have said that the deal is still not in the final stage and both the parties can back out.
Why is Dharma Productions in talks to sell stakes?
According to the sources giving the news, due to the ups and downs of the box office, increasing fees of actors and ending of dependence on satellite and digital rights, it was proving difficult for the company to operate alone. Given this, the company decided to sell the stake. Dharma Productions has been actively looking for investment for some time now. For this, the company is in talks with several big groups and industrialists. On the other hand, Saregama, which has already acquired a majority stake in digital entertainment company Pocket Aces Pictures, is moving towards strengthening its content and marketing strategies. Both companies have not commented on the matter yet.
Why is Saregama showing interest in Karan Johar's company?
According to people familiar with the matter, over the past few years, Saregama has aggressively bet on the content front but has not been able to make a mark in terms of film or OTT production. However, thanks to its music catalogue, the company's valuation is very high and it has enough resources to acquire a stake in one of the country's top film production houses.
According to sources, Saregama feels that it will be able to take advantage of Dharma's relations in the industry by moving forward with it. Also, the company will benefit from Dharma Productions' ability to easily produce projects with top stars. The company has taken steps in this direction considering that apart from Phil Jio Studios, no production company is moving towards new films.
What do the financial figures of both companies say?
According to the estimated financial information of Dharma Productions on financial intelligence firm Tofler, its revenue in FY23 was Rs 1,044.16 crore, while the profit was Rs 110.69 crore. In the same year, Saregama's revenue was Rs 790.3 crore and net profit was Rs 185.1 crore.
Dharma Productions mainly produces and distributes Hindi films. In the last few months, the company has released films like Kill, Bad News, Yodha and Mr and Mrs Mahi in theatres. This week the company is going to release Jigra starring Alia Bhatt. In 2018, the company launched a digital content arm Dharmatic Entertainment. Which produced OTT shows like Call Me Bae (Amazon Prime Video), Fabulous Lives of Bollywood Wives (Netflix) and Coffee with Karan (Digital Hotstar).
On the other hand, in September 2023, Saregama bought a majority stake in digital entertainment company Pocket Aces Pictures, including 51.8% shares, for Rs 174 crore. The deal was done entirely in cash. Saregama is betting big on live shows and concerts to improve monetization opportunities for its intellectual properties. However, the company unit Yoodlee Films focuses on film production.
Dharma Productions celebrates its 44th anniversary on Tuesday
Karan Johar's company Dharma Productions is also celebrating its 44th anniversary on Tuesday. The company was started by Karan Johar's father Yash Johar in the year 1976. On the occasion of the company's anniversary, Karan Johar shared an emotional message on Instagram and thanked those who supported him in taking the production house forward.
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