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Hindujas enter film financing

Anusha Subramanian

The Hinduja Group has entered film financing by earmarking a corpus of Rs 200 million.

The funds are being routed through Aasia Industrial Technologies, a subsidiary of Hinduja TMT, the holding company of the group's new economy initiative.

The company has financed several films which will be released by end-2002. At present, it has six films on the floor.

"We are one of the very select corporate entities which have domain expertise in the film business. We have been in the business of financing and distribution of films for overseas territories for sometime and have been able to exploit the Hinduja Group's contacts and experience in the film industry," said the company's spokesperson.

"Hinduja TMT already has an exposure to the film industry through Incable and CVO. It also has worldwide rights for various movies for satellite television, DVDs and theatrical rights. The group is further looking at acquisition on good software content," the spokesperson said.

The total exposure at any given time in movie financing is expected to be between Rs 50 million and Rs 100 million.

The unique strategy that the company has adopted with regard to film financing is the fact that it finances films which are nearing completion to minimise risk of delay. The money is then secured by territorial rights.

A senior company official said, "We believe it is not a high risk business and in case of movies such as Pitaah we have been able to recover the money despite the fact that it made losses."

Although, films have been granted industry status, organised financing by financial institutions and banks is yet to take off with only the Industrial Development Bank of India and Bank of India having advanced money.

Media analysts feel that corporatisation is the best thing that has happened to the industry after the graduation to colour from black and white.

While corporatisation won't change the success ratio and quality of films, it will definitely change industry practices.

Corporatisation is expected to bring in more International standard practices such as strict budgeting fund and time, streamlining the payment cycle and corporate governance.

Last year many corporate entities declared their plans to foray into film production.

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