Indian knight rises

Film investors in India still tend to fall into one of two camps - larger production houses or studios, which usually acquire rather than develop content, or wealthy individuals who finance one-off projects and rarely look beyond the next film.

Stepping into the yawning gap between these two extremes is Mumbai-based DAR Motion Pictures, a private equity player turned producer, with a content-driven strategy that gives it a different spin in India’s star-obsessed film industry.

Established three years ago, as the content arm of private equity firm DAR Capital Group, the company has so far invested in seven Indian films and recently formed a syndicate of three investors to bankroll a further nine. It’s also waiting for approval from India’s financial regulator SEBI to raise an $18m film fund with an investment bank out of Mumbai.

At the same time, DAR is developing a wide-ranging slate of Indian-language features in partnership with high-profile filmmakers including Nikhil Advani, Anurag Kashyap, Sudhir Mishra and Siddhartha Jain.

“We’re not just a financier - we want to be very clear about that - we are a fully-fledged production house,” says DAR Capital Group chairman Arun Rangachari. “At first we asked ourselves whether there is any conflict of interest between being a producer and also a partner [in the fund], but we believe the fund will benefit from the slate of films that DAR brings to the table.”

This strategy should also ensure that DAR’s fund will not sit idle while waiting for the right investment opportunities to come along. A common pitfall of film funds is that advisors and managers are under pressure to start making investments from the get-go, and as good projects can’t be generated overnight, this can sometimes lead to investing in the wrong films. But as Rangachari explains:”We’re doing these films with or without the fund, so we thought why not offer the entire slate to the fund, at the time that it’s launched post-SEBI approval, so it can hit the ground running and finance other projects too.”

Recognising the growing fragmentation of the Indian audience, DAR’s slate is being developed in four distinct strands - mainstream Bollywood, genre films, youth-oriented content and international co-productions aimed at global markets.

“In the international category we’re investing in smaller films that may have limited appeal in India, but a sizeable audience overseas outside of the Indian diaspora,” Rangachari explains. “What we’ve learnt from our research is quite basic - audiences in the US and Europe don’t want to see rehashes of Bollywood or Hollywood movies, but they do want to see good indigenous Indian content.”

Investments in this category so far include three films arising from the company’s relationship with Anurag Kashyap Films (AKFPL) - Vasan Bala’s Peddlers, which screened in Cannes’ Critics Week this year, Amit Kumar’s upcoming action thriller Monsoon Shootout and Ritesh Batra’s Lunchbox, which is currently in production.

The latter two films are both co-produced by AKFPL, DAR and Western partners - Monsoon Shootout with the UK’s Yaffle Films and Dutch production house Pardesi Films, and Lunchbox with France’s ASAP Films and New York-based Lydia Dean Pilcher. DAR is also talking to ASAP’s Cedomir Kolar about collaborating on further projects.

In the Bollywood category, DAR is working with Nikhil Advani on action film D-Day, which starts shooting this month with Arjun Rampal, Irrfan Khan and Rishi Kapoor heading the cast, and with Sudhir Mishra on Mehrunissa, starring Kapoor and Amitabh Bachchan as two older gentleman bickering over a lost love.

Tapping into the new trend to make edgy, contemporary films aimed at India’s youth audience, DAR has taken an equity stake in Siddhartha Jain’s iRock Media, which produced youth hit Ragini MMS, and is also backing psychological thriller Ugly, which is Kashyap’s next project as director following Gangs Of Wasseypur.

In the genre category, DAR is focusing on 3D filmmaking, which has not yet been widely embraced by Indian filmmakers. Working with BVG Films and digital exhibitor UFO Moviez (DAR’s private equity business is an investor in UFO backer Valuable Group), the company recently scored a hit with India’s first 3D horror, Vikram Bhatt’s Haunted 3D, which grossed $7m earlier this year.

A second 3D release, Dangerous Ishq, was less successful but Rangachari believes Indian audiences will warm to the format and a sequel to Haunted is in the works along with two other 3D projects with other partners: “Haunted made us realise how important horror can be - it’s the only genre that has not been tapped properly in India.” The US studios are also likely to be tracking demand for DAR’s 3D projects as Indian exhibitors won’t embrace the format wholesale until local filmmakers do.

Also of interest to the US studios and other Western content owners is the fact that  DAR has also stepped into acquisition. Following three months of negotiations with Warner Bros, the company acquired all-India rights to The Dark Knight Rises which has grossed around $10m in India since its release in late July. The company is also buying from international sales agents and recently acquired Marley and 3D J-horrors Shock Labyrinth and Tormented from Fortissimo Films.

While DAR business heads Vivek Rangachari and Nikhil D’Rozario, and commissioning producer Shahnaab Alam, work on the production and financing side of operations, DAR has also brought in former Viacom18 executive Murli Chhatwani to head distribution. “We have our own set-up and offices across the country,” Rangachari explains. “We’ll do whatever is best for each film - so if the investors are better off selling the film, we’ll sell, and if they back us to distribute, we’ll do it ourselves.”

Although Rangachari says the company does not have enough knowledge of international markets to start investing directly in projects that don’t have an Indian angle, its appetite for co-production does mark it out from many Indian investors who prefer to fully finance projects and take all rights.

“We’re willing to split rights with partners because so much benefit comes from collaboration,” says Rangachari. “If we’re making films for a global audience then we need to work with somebody who knows that audience. If it’s a good film and makes money, there’s no reason why you can’t share that with somebody else.”