Hinduja enter film financing
Anusha Subramanian in Mumbai - Business
standard - 1st April 2002.
The Hinduja group has entered film financing by earmarking
a corpus of Rs 20 crore. The funds are being routed through
Aasia Industrial Technologies, a subsidiary of Hinduja TMT,
the holding company of the group's new economy initiative.
The company has financed several films which will be released
by end-2002. At present, it has six films on the floor.
"We are one of the very select corporate entities which
have domain expertise in the film business. We have been
in the business of financing and distribution of films for
overseas territories for sometime and have been able to
exploit the Hinduja Group's contacts and experience in the
film industry," said the company's spokesperson.
"Hinduja TMT already has an exposure to the film industry
through Incable and CVO. It also has worldwide rights for
various movies for satellite television, DVDs and theatrical
rights. The group is further looking at acquisition on good
software content," the spokesperson said.
The total exposure at any given time in movie financing
is expected to be between Rs 5 crore and Rs 10 crore.
The unique strategy that the company has adopted with regard
to film financing is the fact that it finances films which
are nearing completion to minimise risk of delay. The money
is then secured by territorial rights.
A senior company official said, "We believe it is not a
high risk business and in case of movies such as 'Pitaah'
we have been able to recover the money despite the fact
that it made losses."
Although, films have been granted industry status, organised
financing by financial institutions and banks is yet to
take off with only the Industrial Development Bank of India
and Bank of India having advanced money.
Media analysts feel that corporatisation is the best thing
that has happened to the industry after the graduation to
colour from black and white. While corporatisation won't
change the success ratio and quality of films, it will definitely
change industry practices.
Corporatisation is expected to bring in more International
standard practices such as strict budgeting fund and time,
streamlining the payment cycle and corporate governance.
Last year many corporate entities declared their plans to
foray into film production.