Theatre chain company Pyramid Saimira Theatre Limited (PSTL) is planning to launch a private equity fund to invest in films. The fund will raise Rs 250 crore initially, and is planning to approach the Securities and Exchange Board of India (SEBI), reports Business Standard. It will raise another Rs 250 crore once the initial Rs 250 crore is deployed. The fund plans to invest in mid-tier budget films costing around Rs 3-5 crore, with PSTL funding 75-80% of the total production cost.
PSTL was recently in news for being sent a forged letter of SEBI asking it to make an open offer to minority shareholders as one of the co-promoters, PS Saminathan had violated the creeping acquisition norms by purchasing more than 5% stake from the open market in a year. PSTL
has now called for an investigation into the matter.
The news of PSTL's plans of a venture fund to invest in films has been doing round for past several years. In 2006, it was said to be planning a $150 million fund for films, which was to be divided in three funds of $50 million each based on the level of risk and exposure.
A host of film focused funds have entered the market since then. Cinema Capital Venture Fund, (CCVF) was launched this year with a corpus of Rs 500 crore. Religare Enterprises also has a JV with Vistaar Entertainment to float a fund to finance films with a targeted corpus
of Rs 200 crore. Then there is also Indian Film Company, which raised $110 million from the Alternative Investment Market (AIM) of London Stock Exchange.
Quite a few private equity funds are looking to invest in India's media and entertainment market, which is large and growing. The Indian entertainment and media industry is estimated to touch Rs 1,15,700 crore by 2012 with a compounded annual growth rate of 18% between
2008-12, according to a recent report by Ficci and PricewaterhouseCoopers.