Adar Poonawalla acquires 50% stake in Karan Johar’s Dharma Productions for ₹1,000 crore

In a landmark move set to shake up India’s entertainment industry, Adar Poonawalla’s Serene Productions has announced a game-changing investment of a staggering ₹1,000 crore into Karan Johar’s powerhouse production companies, Dharma Productions and Dharmatic Entertainment (called Dharma collectively).

With this monumental deal, Serene Productions will now hold a commanding 50 per cent stake in Dharma, cementing a partnership that is bound to redefine Bollywood’s landscape. Karan Johar retains the remaining 50 per cent ownership.

Johar, the creative genius behind some of Indian cinema’s most iconic films, will continue to reign as Executive Chairman, driving the artistic vision of the company with his signature flair. Meanwhile, Apoorva Mehta, as CEO, will join forces with Karan to chart the strategic course of Dharma.

Karan Johar

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In a joint statement, Poonawalla and Johar said that India’s entertainment industry is undergoing a transformative boom, fuelled by rapid digital penetration and a diverse audience hungry for high-quality content across a variety of platforms, with increasing global relevance. In this context, the strategic partnership between Serene Productions and Dharma aims to seize these opportunities by blending Dharma’s rich legacy of storytelling with Adar Poonawalla’s visionary leadership and robust resources. Together, they are poised to revolutionise content creation, distribution, and audience engagement by harnessing cutting-edge technologies and innovative production techniques.

This collaboration will enable both entities to cater to the evolving needs of today’s digitally savvy consumers, pushing the boundaries of creative storytelling. By embracing new platforms and formats, Serene Productions and Dharma are committed to delivering compelling, immersive narratives that entertain, inspire, and captivate global audiences. The alliance marks a pivotal moment for Indian entertainment, as it seeks to elevate the industry to new global heights in a world where audience interactions with entertainment platforms are more dynamic and interactive than ever before.

Elevating Dharma’s Legacy

Talking about the partnership, Adar Poonawalla, said, “I am delighted to have the opportunity to partner with one of the most iconic production houses in our nation, along with my friend Karan Johar. We hope to build and grow Dharma and scale even greater heights in the years to come.”

Commenting on the partnership, Johar stated, “From its inception, Dharma Productions has been synonymous with heartfelt storytelling that captures the essence of Indian culture. My father dreamed of creating films that would leave a lasting impact, and I’ve dedicated my career to expanding that vision”.

He added, “Today, as we join forces with Adar, a close friend and an exceptional visionary and innovator, we’re poised to elevate Dharma’s legacy to new heights. This partnership represents a perfect blend of our emotional storytelling prowess and forward-thinking business strategies”.

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Johar said, “It’s about honoring our roots while embracing the future of global entertainment. Dharma’s journey has been remarkable, and this collaboration opens up a world of possibilities for creating content that will resonate across borders and generations.”

Mehta said, “Over the years, I’ve witnessed Dharma’s transformation into a multi-faceted content powerhouse. This partnership with Adar realiss our vision and marks a new era where cinema, streaming, and global content converge. It enables us to explore new avenues in content creation and distribution, elevating the Indian entertainment ecosystem. More importantly, this investment allows us to take bigger creative steps.”

Winner-takes-all market

Karan Taurani, Senior Vice-President, Elara Capital, said the deal will enable Dharma to garner scale and backing of a large conglomerate in terms of funding. “ The industry is moving through a phase wherein it’s a winner-takes-all market, as large scale budget films account for 85-90 per cent of Hindi Box Office in the post Covid era. Backing from a strong conglomerate will enhance the production house’s capabilities to invest in large budget films,” he said.

Abneesh Roy, Executive Director, Nuvama Institutional Equities said this is a good development in terms of corporatisation of Hindi movie industry which has been grappling with tough times in the past few years due to various factors. He added that this also augurs well in terms of funding of Hindi movie projects and is likely to contribute to a more sustainable content pipeline.

As per a FICCI-EY report released earlier this year, the film sector grew 14 per cent to reach ₹19,700 crore in 2023. Over 1,796 films were released in 2023, and theatrical revenues reached an all-time high of ₹120 crore. However, 2024 has been a volatile year for the industry due to fewer film releases and some of the key movies doing below par business at the box office amidst heightening competition from streaming platforms. As per Ormax Media, the cumulative box-office collections for January-September releases were estimated at about ₹7,949 crore, which is 9.5 per cent less than the same period in 2023.

The government wants the media and entertainment industry to aim for a growth target exceeding 100 billion dollars by 2030. With India projected to become a 10 trillion-dollar economy within the next decade, the media and entertainment sector is expected to surpass the 100 billion-dollar mark by 2030, according to the government.