Sidharth Malhotra | First step: build equity in movies
The actor dabbles in property and mutual funds, and hopes to turn part producer
Sidharth Malhotra has been in the film industry for six years—he spent the first two as an assistant director. Today, the actor has a portfolio of films with the most well-known production houses in the country—Dharma Productions and Excel Entertainment. This is just the beginning, he says, so his focus financially is on income generation.
“Every film will take me one notch higher. As an actor, I have to make sure my budget is such that my producers make money. And if that profit margin increases, so can your remuneration. Then you become a profitable actor. Once I get the profitable actor tag consistently, I can divert (my) attention to other aspects,” says the Kapoor & Sons actor who is doing two movies this year and a couple of others next year.
Once he has gained a strong foothold, Malhotra plans to turn producer. “The next plan of action is to become part producer of the movies which I am passionate about. By doing these I feel you can pressurize the producer less by cutting down the remuneration and becoming a part producer.”
Malhotra also sees promise in branding and endorsement —an area where he has a presence and where he hopes to see a shift. “Say, a brand gains from you, enabling you to demand your own price and marketing plans.”
He endorses brands such as Tourism New Zealand, Fair & Lovely, Brylcreem, American Swan, Hoppits and Coca-Cola. “To be honest, I have made certain choices purely because of the financial numbers also. It is but natural.... But that will change in the future.”
“When you mature as an actor, your choices also change. Any endorsement should have equal benefits. I am still at the stage where a shift is going to happen. For instance, I benefit from a big brand like Coca-Cola, which I signed four years ago. These kind of brands I wouldn’t let go of because of emotional reasons and the equity they build for you,” he says.
Malhotra, who is just back from Karan Johar’s Dream Team Tour of the US, says tours and events are not just another source of income, they also bring in more audiences.
“These events help build our brand and are good for our films. It shows in the revenue when your movie makes good money from overseas,” he says. “We put in more than two months of training and it is very rigorous. We did six cities in two weeks in America.”
The amount Malhotra is paid for such events has increased steadily over the years. “So we don’t have to do that many events—and we genuinely don’t have the time. If I am doing two-three films back to back, there is very little space in the middle. Then we do award seasons, endorsements and local events. Our off days are consumed by that,” he says.
When it comes to expenses, Malhotra has a monthly ballpark figure in mind. “I am still renting so I have to pay my rents, the EMI for my car and salary to my staff. I know the amount and that is the minimum that I need to make.”
He also factors in emergencies. “Then there are other responsibilities. For instance, it is a personal thing, recently my parents needed help, which I factored in.” Since the income is irregular, planning can be a little difficult, he says. “It is difficult to have an exact plan for my investments. The easiest thing that I have done a few times now is to invest in property—smaller ones on Mumbai’s outskirts.”
He doesn’t have the time for research. “I think it is a very time-consuming job to invest in property. I have been so short of time because I have been in and out of the country for the last two years.”
Malhotra, who takes the help of a chartered accountant in Mumbai, says he hasn’t put much thought into investing but seeks advice from his brother, a banker. “He says fixed deposits are not good. I have mutual funds and we are trying to get into bonds now....There is also a management company, Matrix, which gives us advice on certain aspects of money management.”
“Right now, I am more consumed by how to make more rather than save and multiply money. As long as the machine is on, that is what I plan to do in these many years. Once I have nice big capital or liquid money, I can put that in various places. For now, it is only property and mutual funds. And everyone is letting me be with my money,” the actor says, adding that gold and silver don’t interest him.
Malhotra plans to buy a house in Mumbai soon. “Now I have started saving for a house that I want to stay in. Hence, I need to have some liquidity so that I can put half of it for down payment and for the remaining half I will take a loan. I don’t have an address in Mumbai, I am dying to get one. I have seen most of the chief executive officers of bigger companies renting because they feel it is a dead investment to buy. (But) I am buying for emotional reasons.”
“I agree that the kind of income we have is so sporadic that it doesn’t make sense to put all my liquid cash or take a big loan for a house I am going to stay in. But I am hopeful this sporadic income will become so high that we will have many more opportunities to buy many more properties. That is how you can build capital and assets because we don’t know how long or how consistent this profession is going to be. It takes many years to build a brand in our profession. So I think it is not advisable to put in all my money into a massive house. I also want to be economical about it.”
One thing that Malhotra is clearly enthusiastic about is start-ups. “There were opportunities in the past where I didn’t have the money to put in a youth-oriented start-up. If somebody comes with a good idea, and where I can give my branding and my name to it, I am open to venturing into it. For example, a bunch of people came from LA (Los Angeles) and they wanted to start an online dating app. They wanted to make something clean, where you meet for coffee, and not about marriage—very platonic, not a hook-up app. I thought that it had potential but the numbers didn’t work out for us; we are not associated with it.”
“I think they (start-ups) are an interesting way to build equity and become part of it, take a stake in the company and grow with them.”
Malhotra and Matrix Entertainment, the celebrity management company that handles his work too, get in touch with start-ups. “So far, all the meetings have been based on profile, brand name or personality. I haven’t got time to search and select them. This is the year when my priorities have been movies.”
Malhotra is open to exploring investment opportunities in the fitness and healthcare space, even accessories. “We have been thinking of going into eyewear. It is manufactured by the same people, you are just branding it. If I can have my brand name (on something) which is economical, mass-produced, decent-looking and sold online, it would be great. For this I need a decent amount, a manufacturer and an online retail person. As and when it works out, I will talk about it.”
For the time being, he says again, the priority is movies. “The more equity I build in movies, it will last me much longer than putting my hand in multiple things.”
Malhotra doesn’t splurge. “I have lived in rented or shared houses. If I am buying something, say a car, I keep a budget in mind. I am not somebody who stresses about money. For example, if I have Rs100, I buy something in Rs15. Now if I have Rs1,000, I will still buy in Rs15. I don’t need to buy it for Rs155. Also, I am not obsessed with my finances or keep checking my bank account. I am not counting right now, but creating for a few more years.”
Name: Sidharth Malhotra
Wealth plan: Go after income now and build a brand. Then focus on investing.
Business interests: Fitness, healthcare, fashion, start-ups
Invests in: Real estate and mutual funds and is looking to add bonds
Money mantra: He doesn’t splurge. ‘If I am buying something, say a car, I keep a budget in mind.’