The Big Change At Karan Johar’s Dharma

Industry
experts
believe
that
this
deal
will
positively
impact
the
Indian
film
industry,
which
is
struggling
with
fewer
movie
releases.

Serum
Institute
of
India’s
CEO
Adar
Poonawalla
has
announced
that
his
company,
Serene
Productions,
will
acquire
a
50
per
cent
stake
in
Karan
Johar’s
Dharma
Productions
and
Dharmatic
Entertainment,
collectively
known
as
Dharma,
for
Rs
1,000
crore
(Rs
10
billion).

According
to
the
binding
agreement,
Johar
will
retain
the
remaining
50
per
cent
ownership,
Dharma
Productions
said
in
a
statement.

This
announcement
follows
several
media
reports
suggesting
that
Johar
wanted
to
monetise
his
stakes
in
Dharma.
He
had
also
held
talks
with
several
large
firms,
including
Saregama
and
Reliance
Industries.

Dharma
Productions
reported
its
lowest
consolidated
net
profit
in
10
years
for
2023-2024
(FY24),
according
to
documents
submitted
to
the
Registrar
of
Companies
on
October
17
and
reviewed
by

Business
Standard.

The
company’s
profit
plunged
by
94.5
per
cent
year-on-year
(Y-o-Y)
to
Rs
59
lakh
(Rs
5.9
million)
in
FY24.
Consolidated
revenue
also
declined
by
50.2
per
cent
Y-o-Y
to
Rs
520.2
crore
(Rs
5.2
billion).
The
company
reported
a
decrease
in
its
core
revenue
from
the
distribution
and
exhibition
of
films
and
other
distribution
rights
by
83
per
cent
to
Rs
111.38
crore
(Rs
1.11
billion)
in
FY24.

Poonawalla
was
quoted
in
the
statement:
‘I
am
delighted
to
have
the
opportunity
to
partner
with
one
of
the
most
iconic
production
houses
in
our
nation,
along
with
my
friend
Karan.
We
hope
to
build
and
grow
Dharma
and
scale
even
greater
heights
in
the
years
to
come.’

Johar,
as
executive
chairman,
will
spearhead
the
company’s
creative
vision,
while
Apoorva
Mehta,
in
his
role
as
CEO,
will
collaborate
with
Johar
on
overseeing
the
operational
aspects
of
the
company.

Johar
said
in
the
release:
‘…
As
we
join
forces
with
Adar,
a
close
friend
and
an
exceptional
visionary
and
innovator,
we’re
poised
to
elevate
Dharma’s
legacy
to
new
heights.
This
partnership
represents
a
perfect
blend
of
our
emotional
storytelling
prowess
and
forward-thinking
business
strategies.’

Mehta
noted
that
this
investment
‘enables
us
to
explore
new
avenues
in
content
creation
and
distribution,
elevating
the
Indian
entertainment
ecosystem.
More
importantly,
this
investment
allows
us
to
take
bigger
creative
steps’.

The
statement
indicated
that
the
collaboration
aims
to
further
transform
content
creation,
distribution
and
audience
engagement
by
integrating
advanced
technologies
and
pioneering
production
methods.
It
also
aims
to
expand
large-scale,
multilingual
productions,
build
franchises
and
elevate
traditional
entertainment
formats.

An
industry
insider
familiar
with
Dharma
Productions
said
that,
in
recent
years,
the
company
has
made
mainstream
films
with
directors
not
well-versed
in
the
nuances
of
mainstream
film-making,
which
has
impacted
their
box
office
performance
and,
consequently,
the
company’s
revenue.

The
production
house’s
latest
release,

Jigra,
starring
Alia
Bhatt,
has
massively
underperformed.
Other
recent
films
like

Mr
and
Mrs
Mahi
and

Yodha
also
failed
at
the
box
office,
the
insider
added.

However,
industry
experts
believe
that
this
deal
will
positively
impact
the
Indian
film
industry,
which
is
struggling
with
fewer
movie
releases.

“The
industry
is
moving
through
a
phase
where
it’s
a
winner-takes-all
market,
as
large-scale
budget
films
account
for
85
to
90
per
cent
of
the
Hindi
BO
in
the
post-pandemic
era,”
said
Karan
Taurani,
senior
vice-president-research
analyst
at
Elara
Capital.

“We
believe
this
deal
is
a
longer-term,
equity-led
partnership,
wherein
Dharma
will
continue
to
invest
in
large-budget
films
given
the
capital
raise.”

He
added
that
Dharma
has
previously
partnered
studios
like
Disney
and
Zee
Entertainment
Enterprises
(ZEEL)
for
making
Hindi
films
and
that
Poonawalla
may
not
add
any
strategic
value
for
Dharma,
which
may
continue
to
operate
independently
under
the
expertise
of
its
founder.

Nuvama
noted
that
this
deal
could
potentially
be
slightly
negative
for
other
movie
producers
and
music
companies
like
Saregama
(which
was
also
one
of
the
initial
bidders
apart
from
being
a
content
player)
and,
to
some
extent,
ZEEL.

According
to
Tofler,
the
company
had
three
directors,
one
of
whom
is
Johar’s
mother,
Hiroo
Yash
Johar,
and
no
reported
key
management
personnel.
Mehta
is
the
most
recently
appointed
director,
having
been
appointed
on
August
20.

Dharma
Productions
is
one
of
India’s
leading
film
production
and
distribution
companies,
founded
by
Yash
Johar
in
1976
and
now
run
by
his
son,
Karan
Johar.
Dharmatic
Entertainment,
launched
in
2018,
is
the
digital
content
arm
of
Dharma
Productions.

Another
industry
insider
said
that
this
represents
a
type
of
fund
infusion
happening
at
Dharma
Productions.
It
will
largely
involve
a
mix
of
intellectual
property
rights
between
Dharma
Productions
and
the
new
ventures
or
projects
in
the
pipeline.

The
Raine
Group
served
as
the
exclusive
financial
advisor
to
Dharma,
while
AZB
&
Partners
acted
as
the
legal
counsel
to
Dharma
Productions.
JSA
served
as
the
legal
counsel
to
Serene
Productions.

Photographs
curated
by
Satish
Bodas/Rediff.com