Mahindra Group eyeing media, entertainment businesses

Mahindra Group eyeing media, entertainment businesses

Mumbai: The Mahindra group, one of the top 10 conglomerates in India based on revenue, with businesses ranging from automobiles and financial services to trade and information technology, is set to enter the media and entertainment business.

“We are seriously exploring the opportunities in the entire media and entertainment space. It is a business that has a huge growth potential and fits well into our strategy of entering emerging growth sectors," said Andrey Purushottam, executive vice-president, corporate strategy, Mahindra & Mahindra Ltd, the flagship company of the group.

Interestingly, the group’s vice-chairman and managing director Anand Mahindra studied to be a film-maker and majored in film-making and photography before he did his MBA from Harvard University. He has even produced a short film on Kumbh Mela. His wife, Anu Mahindra, is a magazine publisher in her own right.

The media and entertainment industry, according to a study by industry lobby Federation of Indian Chambers of Commerce and Industry and consulting firm PricewaterhouseCoopers, stood at around Rs43,700 crore in 2006 and is expected to grow to Rs100,000 crore by 2011. The film industry, the study says, stood at Rs8,400 crore last year and is likely to grow to Rs17,500 crore by 2011.

The Mahindra group will be the third large Indian conglomerate to enter the film business. Aditya Birla Group and Reliance-Anil Dhirubhai Ambani Group (R-ADAG) have already joined the fray.

While Aditya Birla Group’s Applause Entertainment (Pvt.) Ltd is into the production of feature and animation films and television software, ADAG’s Adlabs Films Ltd, which it acquired in 2005, is primarily focused on film production and distribution. Adlabs is also present in TV content production space through its acquired entity Synergy Communications. The group, however, plans to hive off its film business under a new entity called Big Motion Pictures and is currently, scouting for senior management people for the new venture, said a person familiar with the development. He requested anonymity saying the company is not yet ready to make any formal announcement yet.

Analysts say while Mahindra has no prior experience, the company is cash rich, a prerequisite for film production and distribution business.

“Since revenue stream is now multifold in the movie business and the rate of return is between 18% and 20%, Mahindra’s entry into the entertainment space seems logical," said an analyst at Kotak Securities Ltd. He didn’t wish to be named because he said he hadn’t heard from the company itself on any media plans.

M&M is a leading general purpose utility vehicle manufacturer and is one of the top five tractor manufacturing companies in the world.

The group’s consolidated annual revenue stands at around $6 billion, or Rs23,610 crore.