JM Financial has said Saregama India’s investment in Bhansali Productions (BPPL) is aimed at strengthening its core music business while reducing exposure to the risks of film production. According to JM Financial, the agreement grants Saregama exclusive rights to all future film music produced by BPPL, including films directed by Sanjay Leela Bhansali as well as projects developed under BPPL’s studio model. This structure ensures a steady pipeline of marquee music content, according to the brokerage house. They believe that it will help Saregama avoid competitive bidding for high-profile soundtracks.
Exclusive music rights at the core of the deal
JM Financial said the main benefit of the transaction lies in the music rights arrangement rather than the equity stake. By securing exclusive rights under a pre-agreed commercial formula, Saregama can lock in long-term market share in new music while keeping acquisition costs under control, the report said.
BPPL has a pipeline of more than 10 feature films planned over the next three years, with near-term projects including Love and War and Do Deewane Shehar Mein. JM Financial noted that this provides visibility on future music releases, which are a key revenue driver for Saregama.
Gradual exit from Yoodlee Films
The brokerage also highlighted Saregama’s plan to gradually shut down its own film production activities under the Yoodlee Films banner over the next one to two years. According to management commentary cited in the report, this move could release Rs 1,500–1,750 crore of capital employed in the video segment, which would otherwise remain tied up in film production.
JM Financial said Saregama intends to shift towards a partnership-led approach in video content, instead of producing films on its own. The brokerage expects this change to improve margins across both the music and video segments.
Investment structure linked to performance
JM Financial said Saregama’s Rs 3,250 crore investment will be made through compulsorily convertible preference shares, which will convert into equity in September 2028 based on pre-agreed financial performance parameters. On conversion, Saregama’s stake in BPPL is expected to range between about 28% and 49.9% on a fully diluted basis, with a minimum guaranteed holding of 28%.
The implied valuation for the entire transaction ranges from Rs 6,500 crore to Rs 15,900 crore, the brokerage said. Saregama also has the option to increase its stake to 51% after March 2030. The investment will be funded entirely through internal accruals, with no additional debt proposed.
BPPL financials and earnings impact
JM Financial pointed to BPPL’s recent financial performance to support the investment case. The production house reported audited revenue of Rs 3,040 crore in FY25, compared with Rs 79 crore in FY23 and Rs 55 crore in FY24. It posted EBITDA of Rs 600 crore and profit after tax of Rs 450 crore in FY25, the report said.
According to Saregama management, as cited by JM Financial, the investment is expected to improve margins in both the music and video businesses and be earnings accretive by FY27.