Bizarro AIMo part 5
Not satisfied to be the leading stock market for just international technology and mining concerns, the AIM is pressing into the entertainment world. Thanks to a reader, who shares our fascination with the AIM silliness (prior posts include “Bizarro AIMo part 4“, April 25-07), here’s the FT Alphaville piece on Bollywood’s push to raise production and distribution funds on that stock exchange:
“London is emerging as the international fund-raising hub for Bollywood with the third Indian film production company in as many months looking to list on the city’s Alternative Investment Market. Pyramid Saimira Theatres, which operates one of India’s largest cinema chains, is considering a plan to raise $150m by listing a production and distribution unit in London as early as next month. The trend underscores moves by India’s film industry, the world’s most prolific with more than 1,000 productions a year, to develop a formal corporate structure to give it access to larger amounts of capital.”
A $150MM offering might finance, well, one Hollywood big name movie? And don’t the Bollywood casts involve thousands of actors? Wouldn’t have thought $150 million would do it.
Will the Scottish Widows Pension Fund back up the truck on this deal? Send in the clowns….
MRM
(hat tip to Paul)
Dear Sir,
I very much value and enjoy the comments on your blog.
A couple of things to be aware of about the Indian movie production
business:
A major production in India has a budget of between US$5MM and US$20MM.
The average movie made in India has a production cost in the vicinity of US$1MM to US$2MM.
Comparing this with Hollywood, blockbusters cost well over US$200MM to produce, and the the average wide release movie costs US$65MM to make.
Another vantage point, at the revenue line, the movie industry in India brings in US$1.2B per year (2006) on about 1,000 movies vs. US$50B for the major Hollywood studios on about 200 wide release movies plus about 400 other limited release projects.
There’s a case that $150M is a pretty substantial raise for movie production in India.
Best regards,