Saregama to Invest in Bhansali Productions for Potential Majority Stake
Investment Details
India’s oldest music label, Saregama, has announced plans to invest 3.25 billion Indian rupees (approximately USD $36 million) in Bhansali Productions. The investment, approved by Saregama’s board on December 16, involves a multi-stage acquisition that could lead to Saregama gaining majority control of the Bollywood studio by 2030.
Acquisition Structure
The agreement includes the subscription to 9,960 compulsory convertible preference shares (CCPS) in Bhansali Productions. This could increase Saregama’s stake to 51% by 2030, as stated in a filing to the Indian stock exchanges. The deal also secures exclusive music rights from future Bhansali Productions films through a separate agreement.
Music Rights Agreement
A press release confirmed that Bhansali Productions will exclusively sell all future film music to Saregama. This arrangement ensures Saregama a consistent supply of high-quality film music, eliminating competitive bidding and securing long-term market share.
Stage-wise Acquisition
The initial CCPS subscription is expected to be completed by February 14, 2026. These shares will convert to equity within 60 days of Bhansali Productions finalizing its audited financial statements for April-September 2028. This will provide Saregama with 28% to 49.9% ownership on a fully diluted basis, depending on the investment agreement formula. Saregama has the option to increase its stake to 51% within 60 days of the fiscal year 2030 audit.
Background of Bhansali Productions
Founded by Sanjay Leela Bhansali in 1996, Bhansali Productions is renowned for films like “Hum Dil De Chuke Sanam” (1999) and “Devdas” (2002), the latter winning India’s National Film Award for Best Popular Film Providing Wholesome Entertainment.
Financial Performance
In the fiscal year ending March 31, 2025, the studio reported revenue of 3.04 billion rupees ($33.7 million), a significant increase from 55.2 million rupees ($611,000) the previous year. This surge is attributed to projects like the Netflix series “Heeramandi,” which premiered on May 1, 2024.
Future Plans and Comments
Sanjay Leela Bhansali emphasized the importance of time, trust, and respect in meaningful cinema, expressing confidence in Saregama as a partner. Saregama plans to phase out its in-house film production over the next two years, focusing on strategic partnerships.
Financial Outlook
Saregama expects the investment to enhance earnings per share by fiscal year 2027, with improved margins in music and video segments. In the second quarter of fiscal year 2026, Saregama reported a 2% year-over-year drop in consolidated net profit to 438 million rupees ($4.9 million), with a 5% decline in revenue to 449 million rupees ($5 million).
Upcoming Projects
Bhansali Productions has over ten feature films planned in the next three years, including “Love and War” and “Do Deewane Shehar Mein.”
Strategic Partnership
Saregama Vice Chairperson Avarna Jain highlighted the alignment with Bhansali Productions as part of Saregama’s strategy to collaborate with India’s top creative minds.
Saregama’s Recent Activities
Saregama, part of the RPSG Group, recently acquired a 100% stake in Finnet Media through its subsidiary, Pocket Aces Pictures. It also acquired a catalog from NAV Records and formed a partnership with Spotify in 2020.
Conclusion
This strategic investment marks another significant move by Saregama to strengthen its position in the entertainment industry, aligning with creative leaders and expanding its influence in the film music domain.
