As the entertainment industry depended on intellectual property, debt was a "wrong" and "costly" way of funding, Ambit Corporate Finance managing director Ashok Wadhwa said.

Though most of the domestic media companies are taking the public issue route, private equity would be the best form of raising funds. "By placing funds privately, companies would actually be one step away from going public. Besides, they will be saving themselves from other hassles like organising investors meet and explaining on their return on investments," he said. G W Capital managing director Vishal Nevatia agreed private capital was the most suitable source of raising funds for businesses which were yet to mature.

The cost of accessing venture capital was less today for the entertainment industry. Besides, the reputation of the venture capital funding would add value to the media company. Media businesses would have to assure VCs a high quality of managers and credible promoters. "The business model should have a sustainable and defined cash flow," he said.

The entertainment industry would be raising Rs 3,000 crore through 40 issues in the next few months, Communications Equity Associates chairman Deepak Nanda said. He predicted the industry would grow from Rs 15,000 crore to Rs 70,000 crore in seven years.