RPSG Group’s entertainment arm, Saregama India, is set to acquire a significant 28% stake in Bhansali Productions Private Limited, a company founded by renowned filmmaker Sanjay Leela Bhansali. The deal, valued at Rs 325 crore, allows Saregama the option to increase its stake to 51% by March 31, 2030. This partnership aims to merge Bhansali Productions’ acclaimed storytelling with Saregama’s expertise in music and live events, creating a formidable presence in the media and entertainment sector.
Details of the Investment
Saregama’s investment involves the subscription of 9,960 compulsory convertible preference shares in Bhansali Productions. This strategic move is expected to significantly enhance Bhansali Productions’ content offerings. The company plans to develop a world-class studio while retaining the intellectual property rights of all its future films. This collaboration represents not just a financial transaction but an effort to elevate the quality and quantity of cinematic content produced by Bhansali Productions.
Exclusive Music Rights
As part of the agreement, Bhansali Productions will exclusively sell the music rights for all its upcoming films to Saregama, based on a pre-established formula. This arrangement ensures Saregama has a consistent supply of film music, reducing the need for competitive bidding and allowing for better control over acquisition costs. This strategic alignment aims to secure Saregama’s long-term market share in the music industry, particularly in the film sector.
Future Prospects and Financial Expectations
Saregama anticipates that this partnership will benefit its earnings per share (EPS) by the fiscal year 2027, enhancing profit margins in both its music and video segments. Bhansali Productions has a robust pipeline, with over ten feature films planned for release in the next three years. The studio is committed to maintaining its auteur-driven approach while scaling its output. For the fiscal year 2025, Bhansali Productions reported impressive financial figures, including a revenue of Rs 304 crore, an EBITDA of Rs 60 crore, and a profit after tax (PAT) of Rs 45 crore.
Statements from Key Figures
Sanjay Leela Bhansali expressed his belief that creating impactful cinema requires time, trust, and respect for the artistic process. He emphasized that Saregama shares this philosophy, making them an ideal partner. Avarna Jain, vice chairperson of Saregama India Ltd, highlighted that this collaboration aligns with Saregama’s strategy of partnering with India’s top creative talents, ultimately delivering long-term value to shareholders. Bhansali Productions is celebrated for its iconic films, including “Hum Dil De Chuke Sanam,” “Devdas,” and the Netflix series “Heeramandi,” further solidifying its reputation in the industry.
Disclaimer: Digihunt is not a financial advisor, and this is not investment advice.