In a landmark deal, one of India’s most celebrated film production houses, Dharma Productions, led by Karan Johar, sold a 50% stake to Adar Poonawalla for ₹1,000 crore. This collaboration marks the first time in history that Dharma, long seen as a family-owned entity, steps into a shared ownership structure. Known for delivering massive hits over the past two decades, the sale reveals a strategic shift, aimed at addressing underlying financial challenges (see here) within the company.
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Rise and Struggles of Dharma Productions
Under Johar’s leadership, Dharma Productions achieved immense success throughout the 2010s, bringing blockbusters like Yeh Jawaani Hai Deewani, Raazi, and Simmba to the big screen. By 2019, the production house was generating an annual revenue of over ₹700 crore, with profits around ₹27 crore, according to Ministry of Corporate Affairs records. However, the COVID-19 pandemic took a toll, with an 83% revenue drop and 75% decline in profits—a reflection of the challenges that gripped the cinema industry as a whole. Yet, Dharma rebounded with post-pandemic successes such as JugJugg Jeeyo, Brahmastra, and Sooryavanshi, bringing annual revenue back above ₹1,000 crore by 2022-23. Its digital arm, Dharmatic, also thrived with popular shows like Fabulous Lives and Koffee With Karan.
Financial Setbacks in 2023-24
Despite its comeback, the 2023-24 financial year marked a steep downturn for Dharma Productions. Revenue plunged by 50%, reaching just over ₹500 crore, while profits plummeted by a staggering 95%, leaving the company with a mere ₹59 lakh in profit, as per data from Tofler. Industry insiders believe that this financial strain compelled Johar to seek external funding, leading to Poonawalla’s entry as a strategic investor. The challenges of 2023-24 included box office disappointments like Selfiee and Yodha and dwindling interest in Koffee With Karan, which impacted the studio’s cash flow significantly.
| FY | Revenue | Expense | Tax | Profit |
|---|---|---|---|---|
| 19-20 | ₹741.91 CR | ₹697.17 CR | ₹16.98 CR | ₹27.75 CR |
| 20-21 | ₹120.92 CR | ₹113.15 CR | ₹0.9 CR | ₹6.86 CR |
| 21-22 | ₹278.05 CR | ₹242.95 CR | ₹8.02 CR | ₹27.06 CR |
| 22-23 | ₹1044.16 CR | ₹1028.59 CR | ₹4.86 CR | ₹10.69 CR |
| 23-24 | ₹520.2 CR | ₹517.9 CR | ₹1.69 CR | ₹0.59 CR |
Adar Poonawalla and Karan Johar’s Vision
The partnership with Adar Poonawalla brings Serene Productions, his newly established production company, into Dharma as an equal stakeholder. Poonawalla’s investment provides a financial buffer for Dharma, enabling it to navigate its current challenges while exploring ambitious new projects. In a joint statement, Serene Productions and Dharma expressed their commitment to producing content that resonates with both Indian and global audiences. “India’s entertainment industry is undergoing tremendous growth with rising digital engagement and diverse audience demands for high-quality content,” the statement read, emphasizing the strategic value of combining Dharma’s storytelling expertise with Poonawalla’s resources.
Karan Johar’s Cryptic Response and Industry Reactions
Following the announcement, Karan Johar took to social media with a cryptic post that read, “Competition happens at the bottom. The people at the top are collaborating,” likely addressing those critical of the deal. Johar’s post hints at his vision of transformation and resilience in an industry where adaptability is key. Actor Jaaved Jaaferi humorously commented on the development, suggesting a potential Dharma film title: Kabhi Khushi Kabhi Serum.
A New Era for Dharma Productions?
This partnership brings renewed hope for Dharma’s future, offering both financial stability and creative flexibility. Trade analysts suggest that the deal will allow Dharma to invest in bigger budgets and push boundaries in content creation. For Johar, who now shares his iconic brand’s ownership, the partnership offers a chance to stabilize and innovate, aiming to replicate the growth Dharma achieved post-pandemic.