Reliance Eyes Stake in Dharma Productions? To Strengthen Its Media Dominance

October 15, 2024: Following recent reports of Saregama considering a majority stake in Dharma Productions, it has now surfaced that Reliance Industries Ltd (RIL) is also in talks to acquire a stake in Karan Johar's Bollywood powerhouse. According to The Economic Times, discussions are ongoing, although the size of the potential stake remains undisclosed.

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

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Enhancing Reliance's Content Portfolio

If the deal moves forward, Reliance's content production capabilities would be significantly bolstered. Already a media heavyweight, Reliance's portfolio includes Jio Studios, Viacom18 Studios, Colosceum Media, and a minority stake in Balaji Telefilms. Jio Studios, which has become the largest film studio in India, reported box office collections of ₹700 crore for FY24. Notably, its co-production Stree 2 has set a new benchmark as the highest-grossing Hindi film of all time.

Previous Talks with Saregama

Earlier reports suggested Dharma Productions was in talks with Saregama, a subsidiary of the RP Sanjiv Goenka Group, regarding a majority stake. However, in an official statement on October 8, Saregama clarified that there were no substantial developments to report at that time, though it regularly explores strategic growth opportunities.

Dharma Productions' Financial Performance

Despite a revenue surge in FY23, where Dharma Productions earned ₹1,040 crore compared to ₹276 crore the previous year, the company faced a significant 59% drop in net profit to ₹11 crore, largely due to increased expenses. Dharma’s revenue streams for FY23 included ₹656 crore from distribution rights, ₹140 crore from digital platforms, ₹83 crore from satellite rights, and ₹75 crore from music. The previous year’s revenues were considerably lower, reflecting the impressive growth achieved by the production house despite ongoing challenges.

As both Reliance and Saregama vie for stakes in Dharma Productions, the acquisition could shape the future of content creation and distribution in India's entertainment industry.