Reliance focuses on shares produced by Dharma? Strengthen its media dominance

October 15, 2024: After recent reports that Saregama was considering acquiring a majority stake in Dharma Productions, it is now reported that Reliance Industries Ltd (RIL) is also in talks to acquire Karan Johar’s stake in the Bollywood giant. according to economic timesalthough the size of the potential stake has not been disclosed, discussions are ongoing.

For Karan Johar, monetizing his stake in Dharma Productions is a long-term goal, but previous talks reportedly fell through due to valuation differences. Johar currently holds 90.7% stake in Dharma Productions, with his mother Hiroo Johar controlling the remaining 9.24% stake. The production company has produced some of Bollywood’s most successful films, making it an attractive asset for media conglomerates.

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Enhancing Reliance’s content portfolio

If the deal goes ahead, Reliance’s content production capabilities will be significantly enhanced. Reliance is already a media heavyweight, with its portfolio including Jio Studios, Viacom18 Studios, Colosceum Media and a minority stake in Balaji Telefilms. Jio Studios has become India’s largest film studio, reporting a box office revenue of Rs 700 crore in FY24. Notably, its co-production 2nd Street Setting a new benchmark as the highest grossing Hindi film of all time.

Previous meetings with Saregama

It was earlier reported that Dharma Productions is in talks with Saregama, a subsidiary of RP Sanjiv Goenka Group, for a majority stake. However, Saregama clarified in an official statement on October 8 that while it regularly explores strategic growth opportunities, there were no significant developments to report at that time.

Dharma Productions Financial Results

Although Dharma Productions’ revenue grew significantly in FY23 with revenue of Rs 1,040 crore as compared to Rs 276 crore in the previous year, the company’s net profit fell significantly by 59% to Rs 11 crore, mainly due to higher expenses. Dharma’s revenue sources for FY23 include Rs 656 crore from distribution rights, Rs 140 crore from digital platforms, Rs 83 crore from satellite rights and Rs 75 crore from music. Revenues fell sharply in the previous year, reflecting the studio’s impressive growth despite ongoing challenges.

With both Reliance and Saregama vying for a stake in Dharma Productions, the acquisition could shape the future of content creation and distribution in the Indian entertainment industry.