In what’s amongst the primary centered fund within the space, India Media Entertainment Fund (IMEF) is elevating Rs 500 crore, which can present each fairness in addition to devices like non-convertible debentures (NCD) to firms within the content material, distribution platform and providers areas.
The personal fairness fund has appointed a high-profile advisory physique which incorporates advert guru Prahlad Kakkar, managing director of Red Chillies Entertainment and cricket staff KKR Sports, actress and entrepreneur Raadhika Sarathkumar, who has starred in Malayalam, Hindi and Kannada movies and runs Radaan Mediaworks. It additionally contains Ramnath Pradeep, former chairman and managing director of Corporation Bank, and Rajesh Gupta, senior accomplice of legislation agency SNG Partners.
The fund will likely be overseen and run by its founder and accomplice Parth Gandhi, former managing director of the $825 million fund AION, a number one asset administration firm within the nation which was a three way partnership between ICICI Venture and Apollo Management. It additionally contains CP Khandelwal, chairman of the Systematix Group, a diversified monetary providers firm.
Sources within the know say that the fund is anticipated to shut its first deal within the subsequent 90 days. It is early-stage firms and plans to take a position as much as Rs 25 crore in an organization within the first spherical.
In the content material space, IMEF plans to supply each NCDs and fairness to firms in TV and movie content material, digital information and entertainment, stay occasions and music. According to sources, within the distribution space, it’s OTT, print, broadcasting, cable, DTH and radio, amongst others. And relating to the providers space, the fund’s focus will likely be on firms with sturdy know-how in areas like post-production, VFX, digital in addition to in areas of sports activities and expertise administration.
The fund clearly intends to leverage the large progress within the media and entertainment sector. The Rs 1.8 lakh crore business is anticipated to develop at a CAGR of 13.5 per cent and hit Rs 3.3 lakh crore, in response to business estimates. The filmed content material business itself is value Rs 20,000 crore, with over 1800 plus releases yearly.
The fund is banking on the truth that there is no such thing as a devoted and organised pool of capital on this sector and financial institution preparations are time consuming and want a number of further asset protection. In its discussions with potential traders, the corporate has stated that it’s a return starting from 12-18 per cent in filmed content material to as excessive as 20-30 per cent within the media and entertainment space.
Private fairness funds have made some earlier makes an attempt to get into the space. For occasion, in 2008, Religare entered right into a tie-up with Vistara Entertainment Ventures to arrange a Rs 200-crore fund, however it was centered solely on financing movies. Even earlier, Reliance floated a mutual fund known as ‘Reliance Media and Entertainment Fund’, which was the primary fund devoted to this sector.
PE funds have, nonetheless, been investing on this space by their basic funds. In 2020 PE funds invested round $300 million within the sector, however the bulk of it went to 3 firms — Dailyhunt, Gaana and inShorts, in response to a Bain & Co report for the 12 months 2020.