Saregama Buys 28% of Bhansali Productions in $38M Pipeline Play
By Trevor Loucks
Founder & Lead Developer, Dynamoi
India’s oldest record label has realized that owning the song is good, but owning the filmmaker’s studio is better.
Saregama India Ltd. has executed a definitive agreement to invest ₹325 crore ($38M) in Bhansali Productions, the studio led by Bollywood auteur Sanjay Leela Bhansali. This isn't just a capital injection; it represents a fundamental shift in how labels in high-volume OST markets secure their pipelines.
Instead of entering bidding wars for individual soundtracks—a brutally expensive standard in India—Saregama is buying equity to guarantee flow.
The rights lock-in
The core mechanism of this deal is an exclusivity clause that effectively removes Bhansali’s future filmography from the open market. By acquiring a ~28% stake via Compulsory Convertible Preference Shares (CCPS), Saregama secures perpetual music rights to all future Bhansali projects.
The benefit: The deal utilizes a "pre-agreed pricing formula" for rights transfer. This insulates Saregama from the inflationary auction dynamics driven by competitors like T-Series and Sony Music India.
The moat: Bhansali is not a volume play; he is a prestige play. His films (Gangubai Kathiawadi, Padmaavat) generate high-fidelity, long-tail streaming assets that drive catalog valuation. Saregama is betting that locking in this specific "marquee" pipeline is cheaper in the long run than fighting for rights film-by-film.
Path to control
The deal structure offers a clear staircase to majority ownership, turning a content partnership into a potential subsidiary play.
| Deal Stage | Stake | Timing | Condition |
|---|---|---|---|
| Initial | ~28% | Immediate | Upon CCPS conversion |
| Majority | 51% | By March 2030 | Performance milestones |
This values Bhansali Productions between $77M and $187M depending on future benchmarks. With the studio reporting $36M in revenue and $5.3M in net profit for FY25, Saregama is paying a premium for access, but projects the deal will be EPS accretive by FY27.
Killing the studio division
Perhaps more significant than the acquisition is what Saregama is stopping.
Simultaneous with this deal, the label announced it will wind down its own in-house film production business. This is a mature admission of capital inefficiency. Film production is a high-risk, hit-driven CapEx drain; music licensing is a recurring revenue game.
Key insight: Saregama is moving from a "make and own" strategy to a "fund and license" strategy. They are trading the operational risk of filmmaking for the financial risk of equity investment.
This divestment frees up balance sheet liquidity to pursue more strategic partnerships like the Bhansali deal, effectively outsourcing the risk of box office flops while retaining the reliable income of the soundtrack.
The ownership arbitrage
For industry strategists, this move highlights a new model for Content Acquisition Costs (CAC). In markets where film music dominates streaming charts (India, China, parts of MENA), labels have historically burned cash on licensing fees that expire or royalties that escalate.
Saregama is converting that OpEx into CapEx. By holding equity in the production house, they not only secure the rights at a fixed cost but also participate in the upside of the film studio itself. If the movie succeeds, their equity value rises; if the movie flops, they still own the music catalog forever.
Works when: The target studio has a consistent track record of musical hits (Bhansali is arguably the best in the genre). Fails when: The filmmaker's output slows down, trapping capital in an illiquid asset without new rights generation.
About the Editor
Trevor Loucks is the founder and lead developer of Dynamoi, where he focuses on the convergence of music business strategy and advertising technology. He focuses on applying the latest ad-tech techniques to artist and record label campaigns so they compound downstream music royalty growth.
