Adar Poonawalla-led Serene Productions has agreed to invest in Dharma Productions and Dharmatic Entertainment, owned by film director and producer Karan Johar, in a deal valuing the production house at close to Rs 2,000 crore (about $240 million).
Serene will pick up a 50% stake in Dharma for almost Rs 1,000 crore, with Johar retaining the remaining half, according to a press statement.
Poonawalla is CEO of Serum Institute of India, the world’s biggest vaccine maker.
Johar will spearhead the company's creative vision as executive chairman while Chief Executive Officer Apoorva Mehta will work with him in steering the strategic direction and overseeing operations.
"Over the years, we’ve seen Dharma's transformation into a multi-faceted content powerhouse. This partnership enables us to explore new avenues in content creation and distribution, elevating the Indian entertainment ecosystem," said Mehta.
Dharma Productions was founded by Yash Johar, Karan's father, in 1976. It has been among the leading production houses for over four decades producing many commercially successful films.
Dharmatic Entertainment is the digital content arm of Dharma Productions, established to create original content for global streaming platforms. Launched in 2018, Dharmatic focuses on developing and producing web series, documentaries, and feature films tailored for digital audiences.
According to Abneesh Roy, Executive Director (Research), Nuvama Institutional Equities, this deal could be negative for competing producers as well as music companies like Saregama, which was among the initial bidders, and to an extent Zee Entertainment. He, however, said that it is good for the corporatisation of the Hindi movie industry that has been grappling with tough times in the past five years due to the COVID outbreak, emergence of streaming platforms, and a string of flops.
“The industry is moving out from weaker hands to financially much stronger companies. FY24 seems quite tough for Dharma, revenue likely fell sharply YoY,” said Roy.
The Raine Group served as the exclusive financial advisor to Dharma Productions and AZB & Partners served as its legal counsel. JSA served as the legal counsel to Serene Productions.
Dharma's revenue more than halved to Rs 500 crore in FY24 from Rs 1,040 crore in FY23, according to VCCEdge
