In hindsight, it was remarkably prescient. Weeks ago, before investment banking became the subject of derision, Kishore Lulla, chief executive of Eros International, was explaining why he thought it prudent for the media group to hold fire on major acquisitions.
“The world is going through a very difficult phase and I want to really conserve cash at this minute,” he said, over tea and biscuits at his office in an industrial park in the west London suburb of Park Royal. “We are sitting on a golden goose. My company’s profitability is very high. You don’t want to be in that position when the world markets are really melting down. You don’t know what could happen—the world is very uncertain.”
Weeks later, amid the chaos in the global capital markets following the collapse of Lehman Brothers, Bank of America’s $50 billion (Rs2.3 trillion) acquisition of Merrill Lynch and the emergency bailout of the insurer AIG (American International Group) by the US Federal Reserve, the 46-year-old executive’s caution seems entirely appropriate.
Games people play: Lulla spends his weekends with friends, often over a game of chess. Jayachandran / Mint
Unassuming and low-key—the black Aston Martin parked outside the decidedly unglamorous, plywood warehouse housing the Eros office offered the only hint of the swagger usually associated with media barons—Lulla joined the company founded by his father Arjun before he had even graduated from law school in Mumbai in the 1980s.
He brought with him a clear vision of taking Indian cinema global and transformed his father’s model of buying films from India and selling them to various exhibitors by buying the film rights directly and building an international distribution network.
From that emerged several initiatives, including the establishment of a production company, the July 2007 acquisition of Ayngaran International, a Tamil film distribution company, and tie-ups with Sony Pictures and Lionsgate, the independent film production house.
In addition, Eros, which is associated with the hit films Om Shanti Om, Heyy Babyy and Namastey London, is poised to sign up Pharrell Williams, the hip hop and R&B superstar, as part of its bid to explore new avenues of growth.
Although Eros has its headquarters in the Isle of Man, London became the company’s executive base following the purchase of offices in Park Royal a decade ago. That status was consolidated in 2006 when the company became the first Indian media group to list its shares on the Alternative Investment Market or AIM of the London Stock Exchange.
However, Lulla is vehement that the company will focus increasingly on India, and shows no inclination to partake in the current frenzy of Hollywood deal-making by his peers, including the recent $500 million tie-up between Reliance Entertainment and Steven Spielberg’s DreamWorks.