The Indian Film Co. invests Rs 3 bn in year 1; posts profit

MUMBAI: Alternative Investment Market (AIM) listed The Indian Film Company (TIFC), has posted a net profit of Rs 168.75 million (Rs 16.87 crores or £1.96 million) for the period – 4 April 2007 to 31 March 2008.

The company, which raised £55 million through placing and admission to London Stock Exchange’s AIM market, has until now invested Rs 3.12 billion (Rs 312 crores or £36.31 million) (68.79 per cent) of net proceeds from funds raised.

“We expect to invest the remaining 31.21 per cent by 31 December 2008,” said TIFC chairman Shyam Benegal.

TIFC’s revenues for the period stood at Rs 984.70 million (Rs 98.47 crores or £11.45 million), whereas gross profit posted was Rs 195.22 million (Rs 19.52 crores or £2.27 million).

As at 31 March, 2008, in addition to the existing investments of £36.31 million, the company has committed to further investments of £39.28 million. Since 31 March 2008, TIFC also committed to invest another £8.61 million in film projects.

The company’s performance was helped by the success of films like Jab We Met and Welcome. As per figures made available by TIFC, while Jab We Met directed by Imtiaz Ali and starring Shahid and Kareena Kapoor grossed £6.48 million worldwide; Welcome went on to gross £18 million at the box office.

At the time of listing, the company acquired 14 initial film projects from Studio 18 for a total of £22 million. The company’s upcoming film slate includes 10 films like Singh is Kinng directed by Anees Bazmee and starring Akshay Kumar, Katrina Kaif; Dil Kabaddi directed by Anil Sharma and starring Rahul Bose, Irfan Khan, Konkona Sen Sharma, Rahul Khanna; Kidnap directed by Sanjay Ghadvi and starring Sanjay Dutt, Imran Khan, Minisha Lamba; Ghajini directed by A R Murgadoss and starring Aamir Khan, Asin; Golmaal Returns directed by Rohit Shetty and starring Ajay Devgan, Kareena Kapoor, Arshad Warsi, Tushar Kapoor, Shreyas Talpade, Amrita Arora; Shortkut – The Con is On directed by Neeraj Vohra and starring Akshaye Khanna, Arshad Warsi, Amrita Rao; Little Zizou directed by Sooni Taraporewala and starring Boman Irani; Pappu Pass Ho Gaya directed by Ravi Chopra and starring Govinda, Lara Dutta; Loot directed by Rajneesh Thakur and starring Suniel Shetty, Govinda and Fruit ‘N’ Nut directed by Kunal Vijaykar and starring Cyrus Broacha, Boman Irani, Diya Mirza.

As of 31 March 2008, the company has a portfolio of films comprising seven acquisitions, 14 co-production agreements and five production agreements. TIFC also inked deals with nine directors, actors and scriptwriters for its productions.

On the distribution front, TIFC opened new revenue streams with the release of films in new international markets including Switzerland, Germany, Poland, Lithuania and Iran. The company also opened up new, non-traditional distribution channels in international territories to give impetus to DVD sales. A new syndication model for exploitation of satellite and ancillary rights for Jab We Met was also put in place. Additionally, TIFC also negotiated a 15 per cent increase in commission percentage with cinema chains in North America.

TIFC’s advisory company CEO Sandeep Bhargava said, "Since listing, the company has successfully built a strong portfolio of films and has developed its distribution model across new revenue models and geographies to increase revenue streams. The company’s active approach to portfolio management has enabled it to return a profit in the first period and it expects to be fully invested by the end of this calendar year. The industry is expected to continue to deliver double digit annual growth this year and we believe that the company is well positioned to take advantage of this with a strong slate in place."

“The outlook for the next six months is very encouraging, with one of the strongest stable of films due for release. We are acquiring new films and our productions are progressing as planned,” said Benegal.

“During the first phase of our growth the focus of our strategy was to acquire films alongside our co-production and production projects in order to generate revenue. We anticipate this focus shifting towards co-production and production agreements as our portfolio matures and develops,” said Network18 managing director Raghav Bahl.

“The company has a strong slate in place for release this year and has isolated a number of further opportunities for investment. Our active approach to portfolio management has ensured that the company is already in profit following less than 10 months of trading with two releases performing strongly at the box office. The industry is currently experiencing the effect of a number of positive dynamics, which will combine to drive its growth and the breadth of the appeal of Indian film on a global scale. In the coming year we will focus on developing the company’s current portfolio with the continuing acquisition, co-production and production of quality content whilst maximising the revenue of these assets through effective distribution models in order to maximise shareholder returns,” Bahl added.

On 2 July, the company’s share were trading at 62.500 pence on AIM.

(Exchange Rate: £1 = Rs 86)

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