Reliance Industries Ltd. (RIL) is in talks to acquire a stake in Karan Johar's Dharma Productions, according to a report from the Economic Times. If the deal goes through, it would enhance Reliance's foothold in India's entertainment industry, adding to its existing assets such as Jio Studios and Viacom18 Studios.

Dharma Productions, which is primarily owned by Karan Johar (90.7%) and his mother, Hiroo Johar (9.24%), is actively seeking strategic partnerships to navigate the challenges posed by increasing production costs, falling theater attendance, and the rise of over-the-top (OTT) platforms. These factors have intensified the need for new investments in Bollywood, as noted in the report.

A source familiar with previous negotiations mentioned that Karan Johar has been looking to monetize his stake for some time, but earlier attempts fell through due to issues surrounding valuation.

Reliance's Expansion in Media Reliance has shown a keen interest in expanding its media presence through strategic investments in entertainment companies. In the past, RIL acquired a minority stake in Balaji Telefilms, and a similar structure could potentially be applied in the case of Dharma Productions.

Currently, RIL's media portfolio includes Jio Studios, Viacom18 Studios, Colosceum Media, and a minority stake in Balaji Telefilms. Jio Studios has recently made a significant impact in the box office, generating ₹700 crore in collections for FY24. One of its notable co-productions, Stree 2, has become the highest-grossing Hindi film to date.

A media analyst highlighted that many production houses are now exploring fundraising options to alleviate financial stress resulting from the pandemic. "A stake sale could facilitate Dharma's transition from a personality-driven business model to a more professionally managed company," the analyst stated.

Recently, Dharma Productions was also reported to be in talks with Saregama, backed by entrepreneur Sanjiv Goenka, regarding a potential majority stake sale. However, Saregama issued a stock exchange filing on October 8, stating that there were no significant updates on the negotiations.