Bollywood tackles a rising rupee

Font Size

Print

Feedback

Email

Discuss

: When Brazilian supermodel Gisele Bundchen refused to accept payment for an assignment in dollars, insisting on the euro, she sent a clear signal that the entertainment industry was worrying about the impact of a falling currency. The Indian entertainment industry may not be as aggressive as Bundchen, but it is also waking up to the effects of a rising rupee.

The rupee has risen 12% against the dollar in one year and with overseas operations a serious business for the industry, often bringing in more than domestic box-office collections—it’s time the industry took it more seriously, say analysts. Admitting that the strengthening rupee is “a reality of life,” Sandeep Bhargava, CEO, Studio 18, whose film Welcome is doing the rounds these days, says that his company is yet to adopt tools to protect its foreign earnings from the onslaught of the rupee.

Some have not been impacted yet because they accept payments only in rupees. Says Pritish Nandy of PNC: “Most of our transactions are conducted in rupee terms so we are not going to lose anything due to it. Still, I’m happy to note that shooting abroad has become cheaper now, which I see as an opportunity for Indian filmmakers.”

The good news is that the prices of Indian movies abroad have seen a massive hike, fuelled by increasing demand. In certain cases, prices have shot up by more than 200%, which has become a blessing for distributors who get a chunk of their revenues from overseas distribution.

Eros International, which has exported films like Om Shanti Om and Namaste London last year prominently in countries like the UK and the US and whose film Sunday is set for a January 25 release, spends all its earnings from export of films in acquiring new films abroad. This is not all: hedging of revenues in dollars has become a buzzword among producers like Eros, Shemaroo Entertainment and Percept Picture Company (PPC).

Preet Bedi, CEO, PPC, which is planning to distribute its recently released animation Hanuman returns in the UK and the US, agrees that overseas collection will plummet when it converts its earnings in foreign currencies to the rupee. “We may see a drop in film distribution abroad,” fears Bedi adding, “We are looking at accepting our revenues from overseas partners in rupees only.”