Dharmatic Entertainment merges with Dharma Productions to cut costs
What's the story
Karan Johar's Dharma Productions, one of Bollywood's leading film production companies, has decided to merge its digital arm, Dharmatic Entertainment, into the parent company, effective April 1, 2025. Per The Economic Times, the move is part of a strategic overhaul aimed at streamlining operations and reducing overheads in response to the evolving entertainment landscape.
Approval granted
Fast-track merger application approved by shareholders and creditors
The fast-track merger application has received approval from the shareholders and creditors of both companies, according to company filings, per ET. This is a significant step for Dharma Productions after it sold a 50% stake to entrepreneur Adar Poonawalla last year for ₹1,000 crore. The deal valued the company at ₹2,000 crore.
Operational efficiency
No financial transaction will be involved in the merger
The merger is intended to streamline the group structure by reducing the number of entities, cutting administrative costs, and simplifying legal compliance. Since Dharmatic is already a wholly-owned subsidiary of Dharma Productions, the merger will not involve any financial transaction. The existing stake held by Dharma Productions in Dharmatic will be extinguished due to this merger.
Company statement
'Dharmatic was envisioned as a digital-first creative studio'
The ET quoted a company official saying, "Dharmatic was envisioned as a digital-first creative studio, but the industry has evolved in ways that make integrated operations more impactful." "This merger allows us to optimize resources and run a leaner, more efficient organization while continuing to tell powerful stories across platforms." Launched in 2018, Dharmatic Entertainment produced shows like The Fame Game and Koffee with Karan for Netflix and JioHotstar, respectively.