Is RIL tapping Dharma Productions to acquire stakes?

In a significant development, Reliance Industries Ltd is reportedly in discussions to acquire stakes in Karan Johar’s Dharma Productions, media reports say. 

This potential acquisition appears to be a strategic move by the Reliance group to diversify its portfolio and strengthen its presence in the entertainment sector, sources said. 

Notably, Saregama, an RPSG Group music label, has also been in talks to acquire stakes in Dharma. The group reportedly valued Dharma Rs 600 crore, even as its revenue was above Rs 1,000 crore 

This development comes amid a notable decline in Dharma Productions' profit after tax, which fell to Rs 10.7 crore in FY23, down from Rs 27.1 crore in FY22, according to financial data from Tofler. However, the company reported a total revenue of Rs 1,044 crore for the fiscal year 2023, a substantial increase from Rs 278 crore the previous year. Additionally, borrowings decreased to Rs 82 crore in FY23 from Rs 92 crore in FY22.

Dharma Productions is actively seeking strategic partnerships in response to rising production costs and shifting consumer preferences toward OTT platforms. An acquisition by RIL would enhance its existing portfolio, which includes Jio Studios and Viacom18 Studios.

Founded in 1976 by Karan Johar's late father, Yash Johar, Dharma Productions is one of India's foremost film production houses, launching its legacy with the film ‘Dostana’, starring Amitabh Bachchan. Karan Johar took over the company in 2004 after his father’s demise, expanding its operations into various sectors, including advertising, talent management, content production, and live entertainment through initiatives like Dharma 2.0, Cornerstone Agency, Dharmatic Entertainment, and DharmaShow Live TV & Movies.