In a major consolidation move within India's media and entertainment sector, Saregama India Ltd, part of the RPSG Group, has announced a strategic investment in the acclaimed film studio Bhansali Productions Private Limited (BPPL). The company is acquiring a significant minority stake in the studio founded by celebrated filmmaker Sanjay Leela Bhansali.
Deal Structure and Financial Details
As per official stock market filings, the initial transaction is valued at Rs 325 crore. For this amount, Saregama will subscribe to 9,960 compulsory convertible preference shares in Bhansali Productions, securing an immediate 28% stake in the company. Crucially, the agreement grants Saregama the right to increase its shareholding to a controlling 51% by March 31, 2030.
The investment is projected to become earnings per share (EPS) accretive for Saregama by the financial year 2026-27 (FY27), with expected margin improvements across both its music and video business segments. Kotak Investment Banking served as the exclusive financial adviser for Bhansali Productions in this deal.
Strategic Synergies and Future Plans
Saregama stated that this partnership merges Bhansali Productions' globally recognized, distinctive cinematic storytelling with Saregama's dominant position in music and live events. The goal is to build a next-generation media and entertainment powerhouse.
A key component of the alliance is that Bhansali Productions will exclusively sell all future film music to Saregama based on a pre-agreed formula. This arrangement guarantees Saregama a steady pipeline of high-profile film music, eliminates competitive bidding, secures long-term market share in new music, and helps control acquisition costs.
The capital infusion will enable Bhansali Productions to significantly expand its content slate across formats, aiming to build a world-class studio while retaining the intellectual property (IP) rights to all its future films. The studio boasts a robust pipeline of over 10 feature films planned over the next three years.
Leadership Perspectives and Company Performance
Sanjay Leela Bhansali, founder of Bhansali Productions, expressed his confidence in the new partner, stating, "For me, powerful and meaningful cinema requires time, trust and a deep respect for the process. In Saregama, we have found a partner that understands this philosophy."
Avarna Jain, Vice Chairperson of Saregama India Ltd, commented, "This partnership underscores Saregama's strategy of aligning with India's finest creative minds while delivering long-term value to shareholders. Bhansali Productions' excellence in storytelling and content creation perfectly complements our leadership in music and entertainment."
Aligning with its evolving strategy, Saregama plans to gradually streamline its in-house film production activities over the next one to two years, focusing more on such strategic partnerships. For the financial year 2024-25 (FY25), Bhansali Productions reported a strong financial performance with revenue of Rs 304 crore, EBITDA of Rs 60 crore, and a Profit After Tax (PAT) of Rs 45 crore.
Bhansali Productions is renowned for creating iconic and visually spectacular films and series that have defined Indian cinema. Its celebrated portfolio includes titles such as Hum Dil De Chuke Sanam, Devdas, Goliyon Ki Raasleela Ram-Leela, Bajirao Mastani, Padmaavat, Gangubai Kathiawadi, Rowdy Rathore, and the recent Netflix global hit series Heeramandi.
