Karan Johar finds a new partner in Adar Poonawalla, the CEO of the Serum Institute of India as he buys 50% stake in Dharma productions, offering the sum total of a ₹1000 crore to the production.
By now, you must have heard of Adar Poonawalla purchasing a 50% stake in Karan Johar's Dharma Productions. Yes, this CEO of Serum Institute of India was behind the manufacturing of the COVID-19 vaccine, Covishield. He has invested a whopping ₹1000 crore in Johar’s production house, encompassing both Dharma and Dharmatic Entertainment. While this might seem like a sudden move, it wasn’t entirely unexpected as Dharma Productions has been actively seeking investments for some time now. The production house had been in talks with several major conglomerates, including Reliance, as it faced financial challenges despite its significant revenue growth.
In FY23, Dharma reported a fourfold surge in revenue, reaching ₹1,040 crore, but rising expenses caused a 59% drop in net profit, falling to ₹11 crore. Despite impressive earnings from distribution rights, digital, satellite, and music sales, the company struggled with increasing costs and sought an investor to stabilize operations and cover losses. So does that mean that now Poonawalla will also have a say in the films being made by Dharma?
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As of now, that doesn't seem to be the case! Adar Poonawalla’s investment was made in a private capacity through Serene Productions, with Karan Johar retaining the remaining 50% of Dharma and staying on as Executive Chairman. This will give Johar, along with his CEO Aproova Mehta, complete control over the company's creative direction and ensure that the filmmaking process remains unaffected by the new partnership.
Though if understood in a broader context, the deal highlights Bollywood’s current financial struggles, exacerbated by the pandemic, where production houses struggling to retain on their own are increasingly seeking financial support from prominent business conglomerates due to shrinking box office numbers with people not showing up to watch films in theatres as much as they used to because of the rise of OTT platforms. Whether this collaboration will prove fruitful in the long run remains to be seen, but for now, it seems to be a timely and necessary partnership in an industry navigating a complex and evolving landscape.
Talking about the partnership, Adar Poonawalla, said, "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 Johar. We hope to build and grow Dharma and scale even greater heights in the years to come."
Commenting on the partnership, Karan Johar, Executive Chairman of Dharma, stated, "From its inception, Dharma Productions has been synonymous with heartfelt storytelling that captures the essence of Indian culture. My father dreamed of creating films that would leave a lasting impact, and I've dedicated my career to expanding that vision. Today, 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. It's about honoring our roots while embracing the future of global entertainment. Dharma's journey has been remarkable, and this collaboration opens up a world of possibilities for creating content that will resonate across borders and generations."
Apoorva Mehta, CEO of Dharma, said, "Over the years, I've witnessed Dharma's transformation into a multi-faceted content powerhouse. This partnership with Adar realizes our vision and marks a new era where cinema, streaming, and global content converge. It 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."
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