From VC pitches to seeking control, Karan Johar keeps Dharma afloat
Adar Poonawalla’s booster shot for Dharma Productions signals confidence in the industry's growth.
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Amid various speculations about companies eyeing to secure stakes in Dharma Productions, Adar Poonawalla-backed Serene Productions will invest Rs 1,000 crore for a 50% stake in Karan Johar's company. Industry sources claim that Dharma Productions has met with multiple venture capital firms over the past three months but declined their offers due to the VCs' demands for control and lower valuation.
It is important to note that Dharma Productions reported a significant decline in its consolidated revenue from operations, which fell by 50.75%, dropping to Rs512.2 crore in FY24, down from Rs1,040 crore in FY23. Total revenue for FY24 also decreased by 50.17%, reaching Rs520.20 crore compared to Rs1,044 crore in the previous fiscal year, according to financial data from Tofler. Net profit plunged to Rs59 lakh, a sharp decline from ₹10.6 crore in FY23. Total expenses for FY24 also fell by 49.71% to ₹517 crore, compared to Rs1,028 crore in the previous year.
A senior founding member of a VC firm told Storyboard18, "Dharma Productions was looking for a partner that would not only provide a higher valuation but also allow them to retain control of the company. Several venture capital firms, interested in diversifying their investment portfolios, were in talks with Dharma Productions."
The industry leader added, "Karan Johar was determined not to relinquish control. VC firms were unwilling to offer both the valuation and control that Dharma Productions demanded. Other media conglomerates rumored to be in talks similarly wouldn’t allow full control, which is what Serene Productions offered."
Joint press statements confirmed that Karan Johar, along with his friend and Dharma Productions CEO Apoorva Mehta, will retain creative and administrative control.
A senior industry analyst told Storyboard18, "It’s crucial that industry consolidation doesn’t happen and that more players participate in its growth. A small number of players and limited capital infusion won’t lead to the industry growth we’re aiming for."
He added that the entry of new players and corporations will expand the ecosystem, whereas the involvement of only a few players would restrict the industry's potential growth.
