Saregama invests in filmmaker Sanjay Leela Bhansali’s company as M&E industry sees growing consolidation

Bhansali Productions is known for films like Gangubai Kathiawadi and Padmaavat, besides web shows such as Heeramandi. With this fund infusion, the company will augment its content slate across formats, while retaining the intellectual property rights of all its films, according to the statement on Tuesday.

As part of the partnership, Bhansali Productions will sell all its future film music exclusively to Saregama. This guarantees Saregama a steady pipeline of premium film music, eliminating competitive bidding and thereby securing long-term market share in new music and controlling acquisition costs.

The partnership comes on the heels of Serene Productions, led by business tycoon Adar Poonawalla, agreeing to acquire a 50% stake in filmmaker and producer Karan Johar’s Dharma Productions last year. Serene Productions said it would invest ₹1,000 crore in Dharma Productions and Dharmatic Entertainment, collectively known as Dharma.

While film companies Abundantia Entertainment, Excel Entertainment and Roy Kapur Films are said to be in talks to sell stakes and raise money, veteran stock market investor Ramesh Damani, Madhusudan Kela-owned Singularity AMC, and market veteran Utpal Sheth together acquired a 3.3% stake in visual effects firm Prime Focus for ₹146.2 crore. In May, ReelSaga, a mobile entertainment startup founded in 2024 by serial entrepreneurs Shubh Bansal, Shanu Vivek, and Ritesh Pandey, raised $2.1 million in a seed round led by Picus Capital.

Reshaping content

These investors are looking beyond box office volatility, OTT saturation and subscription fatigue to bet on the ability to acquire scale and evolving monetization models after the post-Covid boom, according to experts. Mobile-first formats, artificial intelligence (AI)-driven production, and data-driven audience insights are reshaping how content is created and consumed. The rise of regional and vernacular storytelling is also unlocking fresh demand.

According to a Federation of Indian Chambers of Commerce & Industry (Ficci)-EY report, the Indian media and entertainment industry is expected to expand from ₹2.5 trillion in 2024 to ₹3.07 trillion by 2027, growing at an annualized rate of 7%.

“The recent interest from savvy investors in the media and entertainment space, despite the well-known challenges, is not about betting on a single blockbuster. It’s a strategic play on the broader ‘digital India’ consumption story,” said Varun Singh, founding partner of Foresight Law Offices. “These investors are looking for companies that own the ‘picks and shovels’ of the industry, the talent, the technology, and the distribution networks, rather than just the gold itself.”

The focus is on finding scalable, institutional-grade businesses within an otherwise unorganized creative sector, according to Singh. The real value is in the infrastructure and the intellectual property that can generate multiple, diversified revenue streams over time, he said.

Such partnerships also make sense for Bollywood studios, most of which have so far run on their own steam. While the box office remains volatile and unpredictable, satellite and digital sales for films have shrunk over the past few years with buyers turning cold.

Hollywood studios, which have been bankrolling content from India for a while, have also slowed their investments in the country. Consequently, Bollywood’s film studios have not been able to scale up on their own.

According to experts, funding allows studios to take more risks, moving beyond big-budget, star-driven films to invest in smaller, more diverse projects. The other big difference that such funding could bring about would be to reduce the dependence on OTT companies, which have been tightening their purse strings and steering clear of films that don’t do well at the box office.

Strategic partnerships

Aligned with its evolving content strategy, Saregama will gradually streamline its in-house film production activities over the next one to two years, focusing instead on such strategic partnerships, the statement added. The investment is expected to be EPS accretive for Saregama by FY27, improving margins across both its music and video segments.

Bhansali Productions has a pipeline of over 10 feature films planned over the next three years, including Love and War, directed by Sanjay Leela Bhansali and starring Ranbir Kapoor, Alia Bhatt and Vicky Kaushal. The company reported revenue of ₹304 crore, Ebitda (earnings before interest, taxes, depreciation, and amortization) of ₹60 crore, and profit after tax of ₹45 crore in FY25.

Under the partnership framework, Bhansali Productions will retain complete creative control, while Saregama will provide governance oversight and financial discipline.

“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,” Avarna Jain, vice chairperson of Saregama India, said in the statement.

Bhansali added that in Saregama, his company has found a partner that understands the philosophy of meaningful cinema requiring time, trust and a deep respect for the process.

Kotak Investment Banking acted as the exclusive financial advisor and banker to Bhansali Productions on this transaction.