(Bloomberg) -- Billionaire businessman Adar Poonawalla’s Serene Productions will invest 10 billion rupees ($119 million) in Indian producer Karan Johar’s Dharma Productions and Dharmatic Entertainment, the maker of blockbuster Bollywood movies.
Serene will hold a 50% stake in Johar’s production house in a deal that values the Indian movie studio at 20 billion rupees. Johar’s studio has produced hits like “Kuch Kuch Hota Hai” and “Kabhi Khushi Kabhi Gham” which starred superstars like Shahrukh Khan and Amitabh Bachchan.
The deal comes at a time when Bollywood is struggling with a string of flops while movies from southern India are appealing more to Indian audiences. Nevertheless, the size of India’s media and entertainment sector is expected to rise to 3.1 trillion rupees in 2026, from 2.3 trillion rupees in 2023, according to a report by industry body FICCI and consultancy firm EY.
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X handle user @BiggerSpalash said the Poonawalla deal is expensive at a valuation of around 200 times Dharma’s earnings for the year ended March 2023. “It makes no sense, even if you assume a double-digit growth, which will be hard to come in an industry that is struggling,” the post said, adding the investment could be aimed at building Poonawalla’s personal brand.
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Earlier, local media reports said other players had been eyeing a stake in Dharma.
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