Saregama India expects its co-investment partnership with Bhansali Productions to contribute significantly to the company's Hindi music portfolio, with an executive revealing that 30% of Hindi music content is anticipated to come from this strategic agreement.

Strategic Partnership Details

The entertainment company has entered into a co-investment arrangement with Bhansali Productions, representing a major expansion in the company's content acquisition strategy. This partnership is expected to substantially enhance Saregama India's Hindi music catalog.

Expected Content Impact

According to company executives, the Bhansali Productions collaboration will represent a substantial portion of Saregama India's Hindi music offerings. The 30% contribution indicates the significant scale and importance of this partnership for the company's content strategy.

Financial and Market Implications

Saregama India previously indicated that this collaboration would contribute positively to its earnings per share by fiscal year 2027. The substantial content contribution from Bhansali Productions aligns with the company's broader strategy to strengthen its presence in the entertainment sector through premium content partnerships.

Market Positioning

This co-investment reinforces Saregama India's focus on expanding its content portfolio through strategic industry partnerships. The collaboration with Bhansali Productions provides access to high-quality Hindi music content, potentially enhancing the company's competitive position in the entertainment market.

Saregama India Limited's Board of Directors has approved the execution of transaction agreements for acquiring Bhansali Productions Private Limited (BPPL) in a strategic deal valued at ₹325.00 crores. The board meeting held on December 16, 2025, formalized the partnership structure that combines equity investment with exclusive music rights arrangements.

Board Approval and Transaction Structure

The board has approved multiple agreements that form the comprehensive acquisition framework:

The initial investment involves subscription of 9,960 compulsory convertible preference shares (CCPS) with a face value of ₹10.00 each, totaling ₹325.00 crores. Upon conversion of these preference shares, Saregama's shareholding in BPPL will rise to 51.00%, providing majority control of the production house.

Multi-Tranche Acquisition Timeline

The acquisition will proceed through structured phases with specific timelines and shareholding targets:

The 2028 Option ensures Saregama maintains at least 28.00% shareholding on a fully diluted basis, while the 2030 Option provides the right to acquire majority control with 51.00% shareholding through the CCPS conversion mechanism.

Strategic Partnership Framework and Music Rights

Managing Director Vikram Mehra emphasized the deal's strategic structure during the investor conference call, highlighting that the valuation is performance-based rather than historical. The partnership ensures Bhansali Productions retains complete creative control while Saregama provides governance oversight and financial discipline.

The exclusive Music Rights Agreement guarantees Saregama access to all future film music from BPPL productions through a pre-agreed pricing formula, eliminating competitive bidding scenarios. This arrangement is expected to secure approximately 30.00% of Saregama's Hindi film music content, potentially reaching 40.00%.

Bhansali Productions Profile and Performance

Bhansali Productions Private Limited, incorporated on May 8, 2003, operates in media and entertainment with focus on content creation, production and distribution. The company is promoted by Sanjay Navin Bhansali, renowned for directing acclaimed films including Bajirao Mastani, Gangubai Kathiawadi, Padmaavat, and the Netflix series Heeramandi.

The production house maintains a robust content pipeline with over 10 feature films planned for the next three years, including major upcoming releases Love and War starring Ranbir Kapoor, Alia Bhatt and Vicky Kaushal, and Do Deewane Sheher Mein featuring Siddhant Chaturvedi and Mrunal Thakur.

Valuation Structure and Investment Benefits

The deal structure incorporates performance-linked valuation parameters, with the company's total valuation ranging between ₹650.00 crores and ₹1,590.00 crores based on operating margin performance over the next three years. This structure ensures Saregama pays for future performance rather than past achievements.

The investment is expected to be EPS accretive by FY27, with anticipated margin improvements across both Music and Video segments. Saregama plans to gradually wind down its in-house film production activities over the next 1-2 years, releasing ₹150.00-175.00 crores of working capital currently tied up in video business.

The transaction closing remains subject to satisfaction of customary conditions precedent and subsequent conditions as outlined in the transaction agreements. This strategic acquisition positions both companies for enhanced growth in India's expanding entertainment industry while leveraging their complementary strengths in content creation and music distribution.