The Indian stock market is set to be hit by a tidal wave of IPOs launched by Bollywood production houses planning to finance expansion plans that range from distribution arms to dotcom start-ups and a digital studio in Mumbai.
As many as 35 Hindi feature film production companies are seeking a listing on the Indian stock exchange in the next six months. The motivation for many is to take a competitive position in a market that is witnessing an explosion in satellite and broadband networks hungry for local product.
Among the companies gearing up for an initial public offering is Devgan Entertainment & Software (DESL), backed by leading star couple Ajay Devgan and his wife Kajol. The company plans to mop up $10-15m through a maiden offering to finance an Internet portal for the entertainment industry and open a state-of-the-art digital studio in Mumbai.
DESL has already spent $300,000 on acquiring a 30% stake in a software technology company Bicnet Infosys. The acquisition is expected to provide Devgan's proposed entertainment portal with necessary technical support.
Meanwhile, producer-director Subhash Ghai, whose credits include hit Hindi movie Taal, is also contemplating an IPO. Ghai plans to raise $250m to fund his future film-making and distribution activities.
Producer Boney Kapoor is also planning a stock market float to finance his proposed nationwide distribution network. Kapoor also plans an Internet portal, an event management company and software production outfit but said distribution is his first priority. "Corporatisation is the buzzword now," Kapoor told Screen International. "Things are changing and we do not want to be left behind. To compete with the cash rich multinational studios, we need to raise resources to match them.''