Wed Oct 23 16:19:00 UTC 2024: – Adar Poonawalla’s Serene Productions has acquired a 50% stake in Karan Johar’s Dharma Productions for ₹1,000 crore, valuing the company at ₹2,000 crore.
– Dharma Productions, established by Johar in 1998, has faced recent financial challenges with a significant drop in revenue and profit.
– For FY23, Dharma reported revenue of ₹1,040 crore and a net profit of ₹10.72 crore, but this declined in FY24 to ₹512.3 crore in revenue and ₹62 lakhs in net profit.
– The valuation from the stake purchase reflects a revenue multiple of 4x and an EBITDA multiple of over 360x based on FY24 performance, prompting concerns about the deal’s expense relative to current financials.
– Revenue sources for Dharma include ₹111 crore from distribution, ₹70 crore from satellite rights, ₹163 crore from digital platforms, and ₹70 crore from ad films.
– Questions remain regarding the structure of the investment, particularly whether Johar is fully exiting his stake or retaining some ownership, with suggestions that funds may be used to enhance Dharma’s equity capital for future projects.
– Karan Johar will continue to lead creatively as Executive Chairman, while Apoorva Mehta will focus on operational management.
– Concerns over Dharma’s financial health have led to previous negotiations for funding that fell through, indicating the potential need for seeking additional finance.
– Poonawalla’s investment in Dharma represents a small portion of his overall business, primarily centered around the Serum Institute of India, which gained notoriety during the pandemic for its vaccine production.

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