Shockingly bad business forced Karan Johar to sell Dharma stake
Earlier this month, Adar Poonawalla picked up a 50% stake in Karan Johar's Dharma Productions for ₹1,000cr. The move had fueled speculation about the financial health of one of India's most influential production houses. Now, fresh financial reports show the company's revenue fell by 50% in the financial year 2023-24 to just over ₹500cr. Profits fell even more by 95%, leaving a meager profit of just ₹59L—the lowest in over a decade.
Dharma Productions's journey: From success to struggle
Under Johar's leadership, Dharma Productions had a successful run through the 2010s. By 2019, it was earning over ₹700cr annually with profits of around ₹27cr. However, the COVID-19 pandemic caused an 83% revenue drop and a 75% dip in profits. Despite the setback, the company bounced back with hits like JugJugg Jeeyo and Brahmastra exceeding pre-pandemic earnings by topping an annual revenue of over ₹1,000cr in FY 2022-23.
Box office failures and dwindling interest led to financial crisis
An insider revealed to Hindustan Times that a number of factors led to Dharma's financial struggle in FY 2023-24. "Selfiee and Yodha were massive disappointments at the box office. Koffee With Karan also failed to generate the kind of interest it did in its heyday. And as a result, cash flow was very diminished." These developments led to speculation that Johar may have been compelled into selling a stake in his family-owned company.
Poonawalla's investment and the future of Dharma Productions
Poonawalla's ₹1,000cr investment came through his new production venture, Serene Pictures. With this deal, Serene becomes a 50% partner in Dharma and gives Johar a temporary financial breather. Trade analysts opine this partnership will give Dharma more creative freedom and bigger budgets for future projects. Responding to public reactions, Johar had earlier shared a cryptic note on Instagram saying, "Competition happens at the bottom. The people at the top are collaborating."
Johar's role in the new Dharma-Serene partnership
Despite the stake sale, Johar will retain 50% ownership in Dharma Productions. He will be the Executive Chairman, steering the company's creative direction. Apoorva Mehta will work closely with Johar as Chief Executive Officer to drive operational excellence in the company. Speaking about the collaboration in an official statement, Johar said he was excited about it and added Dharma's commitment to meaningful storytelling that embodies Indian culture.
