Anil Ambani-promoted Reliance Entertainment is planning to sell around 5% stake to raise money for its large plans in movie production, social networking and the movie rental business.
People close to the development said that Reliance Entertainment is in talks with some global funds and that a deal is likely to be agreed upon soon. The firm is insisting upon a valuation of close to Rs 6,000 crore, justifying the number on the scale, the business model and the potential in each segments. A Reliance Entertainment spokesperson was not available for comment.
The move comes as a booming economy and rising affluence drive demand for entertainment. Movie companies have found it far more easier to sell their films, thanks to the insatiable appetite of NRI population across the world and the growth of multiplexes in the country. The popularity of Bollywood and the recent spate of hits combined with a drastic fall in prices of DVDs and VCDs have given a boost to the rental business.
Reliance Entertainment will produce 25-30 movies within the next two years and about seven to eight animation films. The firm is owned 100% by the Anil Ambani family and associates. Its various business units include a movie production business, animation, a movie studio, a social networking site called Big Adda.com, FM radio, movie rentals, online gaming, mobile gaming, a home video unit and theme parks.
The movie production business is planning to produce 25-30 movies over the next 18 months, while the movie rental business is planning to set up 500 shops in different parts of the country. It will invest Rs 500 crore in these shops over the next three years.
The home video unit plans to sell movies of all genres and languages while the theme park unit will set up giant wheels in Delhi and Mumbai on the lines of the London Eye. The firm also plans to enter the broadcast business by launching movie and entertainment channels next year.
Source: Economic Times