Box-office volatility, high star fees, shrinking streaming budgets, a string of big-ticket failures, rapid artificial intelligence disruption, and shifting audience tastes have stalled consolidation among film production houses, even a year after the Adar Poonawalla-Dharma Productions deal worth ₹1,000 crore, producers and analysts told ET.
The 50% stake sale to Poonawalla signalled the mounting financial pressure on producers as bigbudget releases struggled to recover costs. Excel Entertainment, Sanjay Leela Bhansali Films, and Abundantia Entertainment are among the companies reported to be in early stake-sale talks.
“After the Dharma deal, investors have realised that the Hindi film industry, despite its iconic brands, is a highly volatile and high-variance business,” said Karmic Films co-founder and director Suniel Wadhwa. “The valuation was a premium bet on legacy, not on predictable cashflows.”
“When marquee studios show fluctuating profitability, it impacts flow of capital. Investors today are prioritising stability, repeatability, and data-driven scalability, none of which Bollywood’s traditional model is guaranteeing,” added Wadhwa.
Executives said weak investor confidence stems from the industry’s inability to exhibit scale and returns, a mood worsened by the partial exits of global studios like Disney and Viacom from India.
“Indian M&E industry needs to work on showcasing and creating awareness,” said Reliance Entertainment CEO Shibashish Sarkar. “The sector is still fragmented, so more consolidation is needed so that mid-size companies can reach a certain scale to attract capital. India also needs to create awareness to recognise IP as a real asset class, strengthen incentives and expand copyright terms.”
The 50% stake sale to Poonawalla signalled the mounting financial pressure on producers as bigbudget releases struggled to recover costs. Excel Entertainment, Sanjay Leela Bhansali Films, and Abundantia Entertainment are among the companies reported to be in early stake-sale talks.
“After the Dharma deal, investors have realised that the Hindi film industry, despite its iconic brands, is a highly volatile and high-variance business,” said Karmic Films co-founder and director Suniel Wadhwa. “The valuation was a premium bet on legacy, not on predictable cashflows.”
“When marquee studios show fluctuating profitability, it impacts flow of capital. Investors today are prioritising stability, repeatability, and data-driven scalability, none of which Bollywood’s traditional model is guaranteeing,” added Wadhwa.
Executives said weak investor confidence stems from the industry’s inability to exhibit scale and returns, a mood worsened by the partial exits of global studios like Disney and Viacom from India.
“Indian M&E industry needs to work on showcasing and creating awareness,” said Reliance Entertainment CEO Shibashish Sarkar. “The sector is still fragmented, so more consolidation is needed so that mid-size companies can reach a certain scale to attract capital. India also needs to create awareness to recognise IP as a real asset class, strengthen incentives and expand copyright terms.”
