Film distributors now eye PE money for expansion
With private equity funds always on the look out for investment opportunities, the latest to catch their fancy is movie distribution companies. Mediocre TV advertisements
By Meenakshi Verma & Gaurie Mishra, TNN |
NEW DELHI: Private equity funds’ constant search for investment opportunities in India has taken them beyond the real world to the reel republic. The latest to catch their fancy is movie distribution companies. Firms like Shemaroo Entertainment and Venus Movies are learnt to be in talks with PE players for raising funds for expansion. According to industry sources, Shemaroo Entertainment is looking to raising an estimated Rs 100 crore through private equity players.
When contacted, Shemaroo Entertainment’s VP Hiren Gada said, “We are on an aggressive expansion mode and are in the process of transforming the company to a significant player in film and animation content. The expansion plans will be funded by a combination of debt and equity. We are in the process of finalising the amount of funds to be raised and the debtequity ratio.”
An e-mail sent to Venus Movies did not elicit a response.
Sources in the PE industry say this is an interesting investment proposition, though the deal size is unlikely to be very significant . Movie distribution houses need growth capital in the range of Rs 100 crore.
Entertainment companies are trying to follow the Hollywood studio model, where a company owns the entire value chain of film making. While companies like Adlabs and UTV have entered into film distribution and exhibition, exhibitors like PVR are entering the film making space. In a bid to transform themselves into complete studios , movie distribution companies and home video players are also joining the bandwagon and want to control IPR.
According to a PWC-Ficci report, the film-making and distribution space in India is increasingly being corporatised with more than half of the total film releases in 2006 being funded by corporates. The domestic box office market is expected to grow at a CAGR of 13% and double to an estimated Rs 11,900 crore over the next five years.
According to the report, the current size of the total film entertainment business in India is Rs 8,450 crore in 2006 and expected to grow to Rs 17,500 crore by 2011.
Shemaroo which started as a film distribution company ,owns the satellite and cable rights for over 700 films, VCD and DVD rights for over 1,000 films and the terrestrial television rights (India and rest of the world) for more than 150 films. The company is now making Hindi and regional movies and is also quiet bullish about its animation business.
Venus Movies initially produced nonfilm albums and gradually bagged worldwide rights of Bollywood film music. The company then evolved into producing motion pictures and has become one of the top production houses in Bollywood. The company has an integrated business model covering the entire value chain from motion pictures production and record label to distribution worldwide.
When contacted, Shemaroo Entertainment’s VP Hiren Gada said, “We are on an aggressive expansion mode and are in the process of transforming the company to a significant player in film and animation content. The expansion plans will be funded by a combination of debt and equity. We are in the process of finalising the amount of funds to be raised and the debtequity ratio.”
An e-mail sent to Venus Movies did not elicit a response.
Sources in the PE industry say this is an interesting investment proposition, though the deal size is unlikely to be very significant . Movie distribution houses need growth capital in the range of Rs 100 crore.
Entertainment companies are trying to follow the Hollywood studio model, where a company owns the entire value chain of film making. While companies like Adlabs and UTV have entered into film distribution and exhibition, exhibitors like PVR are entering the film making space. In a bid to transform themselves into complete studios , movie distribution companies and home video players are also joining the bandwagon and want to control IPR.
According to a PWC-Ficci report, the film-making and distribution space in India is increasingly being corporatised with more than half of the total film releases in 2006 being funded by corporates. The domestic box office market is expected to grow at a CAGR of 13% and double to an estimated Rs 11,900 crore over the next five years.
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According to the report, the current size of the total film entertainment business in India is Rs 8,450 crore in 2006 and expected to grow to Rs 17,500 crore by 2011.
Shemaroo which started as a film distribution company ,owns the satellite and cable rights for over 700 films, VCD and DVD rights for over 1,000 films and the terrestrial television rights (India and rest of the world) for more than 150 films. The company is now making Hindi and regional movies and is also quiet bullish about its animation business.
Venus Movies initially produced nonfilm albums and gradually bagged worldwide rights of Bollywood film music. The company then evolved into producing motion pictures and has become one of the top production houses in Bollywood. The company has an integrated business model covering the entire value chain from motion pictures production and record label to distribution worldwide.
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