Mumbai, September 12 : While talk of an economic slowdown is affecting the morale of the manufacturing industry, it is surely helping a set of funds. These funds are not only looking at providing the much-needed capital to creative personnel to launch a movie but are also looking at buying stake in established production houses. While two firms have firmed up plans, more such funds are in the pipeline.
Vistaar Religare Film Fund (VRFF), a Sebi-regulated venture capital (VC) film fund, which had closed its first tranche of fund raising in April has already announced to invest around Rs 78 crore to make 8 films. “The films have been budgeted between Rs 5 and Rs 20 crore and the first project is on the floor,” said managing director of VRFF, Sheetal Talwar. The fund intends to have a corpus of Rs 200 crore. Another fund close on the heels of VRFF is Cinema Capital Venture Fund (CCVF). However, it has a different business model and will primarily focus on buying stake in content generating companies. CCVF has identified six-eight companies in which it would like to buy stakes. “We are in talks and in some cases they are in advanced stages. We plan to invest Rs 40-100 crore in these companies to buy 10-49 per cent stake in them,” said founder managing director of CCVF Samir Gupta.
“Apart from identifying companies in which we would like to own stake, CCVF will also launch joint ventures and special purpose vehicles (SPVs) with production houses to invest in their projects. After the completion of the project the SPV would be wound up with proportionate distribution of the propfits between the fund and the production house,” said Gupta. The fund is in its first phase of raising funds and plans to garner Rs 500 crore. “We may have around 3,000 investors in our fund when it closes on September 30 as the minimum ticket size investment is Rs 10 lakh,” Gupta added. The fund will also look at providing seed capital to established actors, directors and writers who would like to set up their own company.
Since entertainment spends in recessionary periods historically show an upward trend, VC firms and private equity funds who wish to take part in the Indian media and entertainment sector growth story seem to be moving ahead with a lot of conviction, said an analyst. “The Indian media and entertainment (M&E) industry is...
