Earlier this month, Karan Johar’s Dharma Productions made headlines by selling a 50% stake to Adar Poonawalla for ₹1000 crore.
Known as one of India’s top production houses, Dharma has long been seen as untouchable. However, this deal has revealed deeper issues within the company. Newly released financials this week show just how serious the situation had become.
Throughout the 2010s, under Johar’s leadership, Dharma flourished, producing hits like Yeh Jawaani Hai Deewani, 2 States, Dear Zindagi, Raazi, and Simmba. By 2019, it was generating annual revenue of over ₹700 crore, with a profit of around ₹27 crore, as per reports submitted to the Ministry of Corporate Affairs.
The pandemic, however, drastically impacted the film industry, with Dharma’s revenue falling by 83% and profits dropping by 75%. Despite this, Dharma rebounded, surpassing its pre-pandemic revenue, reaching over ₹1000 crore in 2022-23, thanks to hits like JugJugg Jeeyo, Brahmastra, and Sooryavanshi, along with successful digital projects through its Dharmatic unit.
But 2023-24 was especially tough. Revenue halved to just over ₹500 crore, and profits plummeted 95%, leaving Dharma with a mere ₹59 lakh in profit. This steep decline has sparked speculation that it prompted the ₹1000-crore investment from Poonawalla, marking the first time the company is not solely family-owned.
An insider suggests that the failure of films like Selfiee and Yodha, coupled with waning interest in Koffee With Karan, caused major cash flow issues. Karan Johar reportedly felt pressured to sell the stake, even though he hoped to retain full control.
Poonawalla’s investment, made through his new venture Serene Pictures, grants him a 50% stake in Dharma. While the infusion of funds relieves Johar’s financial concerns for now, trade analysts suggest that the deal might provide Dharma with the flexibility needed for bigger budgets and innovative content.
Only time will tell if this partnership will bring Dharma back to stability.
