Anil Ambani created ripples in the industry last year, when he announced a joint venture with master director Steven Speilberg to invest in Dreamworks to produce a range of Hollywood blockbusters. The initial flow of Rs. 4000 crores established the ADAG-Dreamworks partnership.
With Speilberg, Anil aims to penetrate the global audience and take advantage of the knowledge of India’s youth and produce 5-6 movies every year. With a director of the stature of Speilberg, ADAG has both intellectual and monetary resources to promote such an idea.
Under the terms of the deal, which could allow DreamWorks to make five to six films a year, ADAG group would match whatever financing DreamWorks can get from a syndication of banks.
The $825 million funding slate announced by Reliance would break down as $325 million from the Indian conglomerate, $325 million from the banks and $175 million from Disney. But the total amount could change if DreamWorks raises more from banks. That would increase the matching equity investment from Reliance, which has agreed to provide up to $550 million.
The Adlabs share price increased by more than 20 % in the BSE in light of Anil’s announcement. Indian audiences have really taken to Hollywood productions in the recent past. Dreamworks’ productions like Shrek, Shrek 2, Shrek the third, Shark Tale, Kung Fu Panda etc. have built a cult following among Indian cine goers. These films were landmark Hollywood hits in India.
So leveraging Dreamworks’ competence in movie making and infusing capital, Anil Ambani may well have entered a niche market and going by past records, this JV would heap huge profits.
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