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Tuesday, May 08, 2001

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Hindi stars reel under failed acts

Nithya Subramanian

NEW DELHI, May 7

THE Rs 1,300-crore Hindi film industry seems to be moving from one crisis to another. First, the industry's main financier Mr Bharat Bhai Shah, was arrested. And now, several big film stars who floated entertainment companies in a bid to corporatise seem to have hit a bad patch.

The list includes names like Ajay Devgan, Jackie Shroff and even Shah Rukh Khan. Industry sources told Business Line that Devgan Entertainment, promoted by Mr Ajay Devgan, is facing financial problems after its magnum opus `Raju Chacha' failed. The compa ny's film distribution business also did not make good money.

``The company had plans to create a brand out of Raju Chacha. It had planned comic strips, games and some other memorabilia with the character. But with a poor box office response, these have been shelved,'' said a source who was involved with the film. Also, plans of tapping the capital markets with an initial public offer (IPO) have been put off and its B2B portal, cinexplore.com, also seems to be languishing.

According to industry analysts, both Jackie Shroff and Shah Rukh Khan have burnt their fingers by getting into film production. ``Mr Shroff's maiden venture, `Grahaan' sank without a trace and Shah Rukh Khan-Juhi Chawla's Dreamz Unlimited also lost money on `Phir Bhi Dil Hai Hindustani'."

Industry pundits are predicting tough times ahead for Bollywood. Though the Government has granted industry status to films, and IDBI has already announced a new film financing scheme, small and medium film producers would still have problems accessing c lean money.

``The institution will look at the track record of the director, the banner, the cast and the script before offering financial assistance. They are more open to the idea of financing big-budget movies only,'' said sources.

Also the interest rates, which could be as much as 22-25 per cent is much higher than what is currently available to producers through non-banking finance companies (NBFCs) and other parallel institutions. Other FIs and banks are not open to the idea of funding films, said banking sources.

Adding to all these woes is a disturbing trend that films per se have not made money in the first five months of this year. Only one Hindi movie, the Govinda-Sanjay Dutt starrer `Jodi No 1' seems to be on its way to becoming a hit.

``With the cost of the movie increasing, recovery has become difficult. A movie which is sold for Rs 1 crore per territory, will recover costs only if it has equivalent gate collections. A Rs 2-crore earner is dubbed a hit. But these targets are becoming increasingly difficult,'' said industry sources.

``And with controversy surrounding stars like the latest one involving Fardeen Khan, the dream merchants will really have to work overtime to cast a new spell,'' they added.

Related links:
No blanket probe on film, media cos -- But stocks slip on Bharat Shah arrest
Bharat Shah's bail rejected

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