Reliance eyes stake in Karan Johar's Dharma Productions?

Reliance Industries Ltd. (RIL) is in negotiations to acquire a stake in Karan Johar’s Dharma Productions, the Economic Times reports. If the deal goes through, it will enhance Reliance's footprint in India's entertainment sector, complementing its existing assets such as Jio Studios and Viacom18 Studios.

OTT dominance playing tough

Dharma Productions, predominantly owned by Karan Johar (90.7%) and his mother, Hiroo Johar (9.24%), is actively pursuing strategic partnerships. The challenges posed by rising production costs, declining theatre attendance, and the increasing dominance of over-the-top (OTT) platforms have made fresh investments essential for Bollywood studios, as noted in the report.

A source familiar with previous negotiations reportedly mentioned that Mr Johar has been exploring options to monetise his stake for some time, but past deals have stalled due to valuation disagreements. RIL has expressed interest in broadening its media presence through investments in entertainment firms. The company previously acquired a minority stake in Balaji and may pursue a similar arrangement with Dharma, according to another source quoted by ET.

Reliance's entertainment portfolio

RIL's content portfolio has been expanding, including Jio Studios, Viacom18 Studios, Colosceum Media, and a minority stake in Balaji Telefilms. Jio Studios has become a major player, reportedly generating ₹700 crore in box office revenue in 2023-24, with "Stree 2" becoming the highest-grossing Hindi film.

A media analyst indicated that many production houses are considering fundraising to address financial challenges exacerbated by the pandemic. "A stake sale could help Dharma transition from a personality-driven model to a more professionally managed organization," the analyst said as per the report.

Sanjiv Goenka’s Saregamapa

Recently, Dharma was also in talks with Saregama, a company backed by entrepreneur Sanjiv Goenka, regarding a potential majority stake sale. However, Saregama indicated in a stock exchange filing on October 8 that there were no developments on this matter.

(By arrangement with livemint.com)