Bollywood tackles a rising rupee

Font Size

Print

Feedback

Email

Discuss

: like acquisition of theatres and opening subsidiaries. Venkat Devarajan, CFO, Adlabs, a part of the ADAG-promoted Reliance Entertainment that is under the process of acquiring nearly 250 screens in the US, says, “Whatever, we earn in foreign currencies, we are spending on our theatre business there itself.”

Similarly, some others are trying to pare their losses from dollar earnings by increasing their import portfolios. The theory applies well for companies like Shemaroo Entertainment, which is involved in exports as well as import of films. Shemaroo has produced films like Bal Ganesha (animation) and Manorama 6 feet under. Also, Shemaroo’s films like Ghatotkaksh-The master of the magic (animation) directed by Srinivas of Sun Animatics and Mere Baap Pahle Aap directed by Priyadarshan, are ready for a summer release.

Hiren Gada, director, Shemaroo Entertainment, admits, “It is a balancing act for us.” While it has distributed films like Dhamaal, Apne, Fool & Final (which flopped) and Phir Se Hera Pheri; it has also acquired foreign films like Driving Miss Baby—an Oscar winning English movie produced by French filmmaker Pache and Akira Kurosawa’s Oscar winner Japanese film Ran.

Shemaroo’s international business, which contributed 7%-8% to total revenues last year, has doubled. Similarly, turnover has increased to Rs 120 crore from Rs 94 crore a year ago. It has opened a UK subsidiary last year and may open another one in future. Says Gada: “Yes, we have gone for forwarding contract of our foreign currencies to some extent for our earnings from overseas theatrical business as we get our returns after three months only.”

Vipul Mehta, CFO, Shree Ashtavinayak Cinevision, whose film Superstar is set for release by January-end is busy in the production of films like Golmaal Returns, Mr Fraud and Kidnap. Says Mehta: “Interest rates are already higher in rupee terms. In fact, interest rates on foreign currency loans are comparatively low as they are charged in LIBOR (London Interbank Offered Rate) plus—this is less than the existing prime lending rate for the rupee. We have raised money in foreign currency convertible bonds to fund our subsidiary in Dubai and are looking for a Hollywood director to direct the debut film from the subsidiary, the title for which is yet to be announced.”