Adar Poonawalla’s ₹1,000 Crore Investment Revives Dharma Productions Amid Financial Struggles
Dharma Productions, one of India’s leading film production houses, has been facing a rough patch, but it seems that the tide may be turning. With continuous losses, underperforming films, and a string of flops, the studio was in dire need of financial assistance. The much-needed lifeline has arrived from an unexpected quarter—Adar Poonawalla’s Serene Productions, which has acquired a 50% stake in Dharma Productions, injecting ₹1,000 crores into the company.
Adar Poonawalla, known as the “vaccine king” for his role in leading the Serum Institute of India, is now diversifying into the entertainment industry with this major investment. His company, Serene Productions, has invested in both branches of Karan Johar’s empire—Dharma Productions, which primarily focuses on films, and Dharmatic Entertainment, which handles digital content for OTT platforms. While Karan Johar will continue as the Executive Chairman, Apurva Mehta will retain his role as Chief Executive Officer, ensuring that Dharma’s legacy in Bollywood remains intact despite the challenges.
This investment could not have come at a more critical time. Over the past few years, despite claims of success, Dharma’s financial situation tells a different story. In 2022, the company recorded revenues of ₹276 crores. By 2023, this number had soared to ₹1,040 crores, nearly four times the previous year’s figure. However, the significant increase in revenue was accompanied by a steep drop in profits, falling by 59%. Despite generating ₹1,040 crores in revenue, Dharma managed to earn a profit of just ₹11 crores, with expenses eating up a massive ₹1,028 crores. This painted a grim picture of the company’s financial health.
Dharma Productions’ revenue sources have been varied. In 2023, the bulk of earnings came from distribution rights (₹656 crores), followed by digital rights (₹140 crores), satellite rights (₹83 crores), and music rights (₹75 crores). These figures marked a significant shift from 2022 when distribution rights brought in only ₹19 crores, while digital rights contributed ₹167 crores, satellite rights ₹34 crores, and music rights ₹21 crores. Despite these revenue streams, profitability remained elusive, and the company struggled to keep expenses under control.
Dharma Productions, founded in 1976 by Karan Johar’s father Yash Johar, has been a cornerstone of Bollywood for decades. The company’s first film, Dostana (1980), starring Amitabh Bachchan, laid the foundation for Dharma’s success in the industry. Karan Johar took over the reins after his father’s passing, launching his career with the iconic Kuch Kuch Hota Hai in 1998. Since then, he has produced over 50 films, many of which have been major successes. However, the past few years have been particularly challenging for the production house.
The first major blow came in 2019 with the release of Kalank, which turned out to be a box office disaster. This was followed by another setback in the form of Student of the Year 2, which failed to live up to expectations. In response to these failures, Karan Johar announced an ambitious project, Takht, but later stepped back from it, citing various challenges. The pandemic exacerbated Dharma’s struggles, and many of the company’s films, including Gunjan Saxena, Shershaah, and Gehraiyaan, were released directly on OTT platforms. While some of these films performed well, Dharma’s overall position in the market remained precarious.
In 2022, Dharma attempted a major comeback with Brahmastra, an expensive project with a budget of ₹350 crores. Despite significant hype and anticipation, the film’s global box office earnings barely crossed ₹400 crores, falling short of expectations. Subsequent films like Govinda Naam Mera and Selfie also struggled to find an audience, leading to further losses.
Karan Johar’s return to direction with Rocky Aur Rani Ki Prem Kahani seemed to offer some hope. The film, starring Alia Bhatt and Ranveer Singh, was claimed to have grossed ₹350 crores worldwide on a budget of ₹160 crores. However, industry insiders disputed these figures, suggesting that the actual earnings were significantly lower than reported.
In addition to struggles at the box office, Dharma’s ventures into digital content have also had mixed results. While Dharmatic’s web series Gyaarah Gyaarah on ZEE5 received praise, other projects, such as Ae Watan Mere Watan, Show-Rime, and The Fame Game, failed to make a significant impact. Despite poor reception, Dharma has continued to produce digital content, with the second season of Call Me Bae announced despite the lackluster performance of its first season.
The financial strain on Dharma Productions was evident, and the need for substantial investment became urgent. The studio’s planned projects, including films featuring Akshay Kumar, Varun Dhawan, and Janhvi Kapoor, as well as the announcement of Dhadak 2 with Siddhant Chaturvedi and Tripti Dimri, were all in jeopardy without external funding. Dharma was also in talks with Akshay Kumar to delay the release of Jolly LLB 3 to avoid overlap with his other projects. Additionally, a film with Kartik Aaryan, directed by Sandeep Modi, is on the slate, though no further updates have been provided.
The arrival of Adar Poonawalla’s ₹1,000 crore investment is seen as a much-needed vaccine for Dharma’s financial woes. While it remains to be seen whether this infusion of capital will be enough to turn the tide, it certainly provides Dharma Productions with the resources to push forward with its upcoming projects and regain its position as a major player in Bollywood.