MUMBAI: After sensing the potential in the realty sector, venture capitalists floated several funds dedicated to buildings and the like.
Now is the turn of the film industry to have its share, with a film fund mooted by Religare Enterprises in partnership with Vistaar Entertainment Ventures knocking at the regulator’s door.
Vistaar Religare Capital Advisors Limited, as the company would be called, has sought approval from the Securities and Exchange Board of India to register as a venture capitalist firm. The fund floated by the company would be called Vistaar Religare Film Fund and would raise around Rs 200 crore in the first round.
The money collected by the fund would have a lock-in of five years and would be used to finance film projects in India and abroad.
“Initially we would stick to film projects, as that is where the maximum value will come for investors. The valuations of production houses are high. They are currently quoting at a PE of 19 and upwards,” said Sheetal Talwar, chairman and managing director, Vistaar Religare Capital Advisors.
“Such funds have been successful in the US. The returns are not publicly available, but it has been noticed that investors tend to reinvest in these funds,” she added.
High networth individuals and institutions that are looking for a new class of products to invest in can look forward to this fund. There would be a minimum ticket size, said Talwar, who wasn’t willing to immediately divulge the minimum investment level that one would have to adhere to.
Currently several banks and non-banking financial companies are lending production houses. “The default rate in the loans portfolio for films has been nil,” said a deputy general manager of IDBI Bank, which has a big films loan portfolio.
d_khyati@dnaindia.net
