Indian filmmakers and film production companies will have more access to funds through the first ever Sebi-regulated venture fund for cinema. Titled Cinema Capital Venture Fund (CCVF), the fund will be closed by the end of September or early October. It has a target of $125-175 million (Rs 500-700 crore) and will look to invest in established unlisted film production companies instead of start-ups.
The media and entertainment sector has been attracting a number of private equity (PE) investments; between January 2007 and June 2008, there have been approximately 32 PE investments in the Indian media space, with a total valuation of $991 million.
CCVF was initiated last year in June. Samir Gupta, founder and managing director, CCVF said, ?We are also planning a joint venture to fund three to four films, in Hindi as well as other regional languages.?
CCVF will invest in animation and gaming companies as well. The fund is expected to generate income through capital gains, interest and dividends. It has already initiated talks to invest in 6-8 companies. CCVF will not invest in film distribution and exhibition companies.
However, if a film production company scales up and diversifies into content production for television other media, CCVF will back it up.
Sanjay Bhattacharji of CCVF said, ?We have seen the film industry grow from single screen releases to 13 streams of revenue now, and growing. Each of these streams is in a nascent stage of growth and will peak in the next five to seven years.?
This, according to Bhattacharji, opens up a number of opportunities for PE investors.
He added, ?We also feel that each private film company has the potential to grow bigger than all the listed film companies put together.? Almost 80% of revenues of the film industry come from 20-odd privately held film companies and the balance is staggered all over the place.
?We have created a separate special purpose vehicles (SPV) for individual projects and for this, the corpus will be around Rs 40-80 crore,? said Bhattacharji.