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Reliance Entertainment eyes movie business, selling stake

By SiliconIndia  |   Tuesday, 25 December 2007, 04:12 Hrs
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Mumbai: Anil Ambani's Reliance Entertainment is planning to sell around 5 percent stake to raise fund for its plans in movie production, social networking and the movie rental business.

People close to the development said that Reliance Entertainment is in talks with some global funds and that a deal is likely to be agreed upon soon. The firm is insisting upon a valuation of close to $1.5 billion justifying the number on the scale, the business model and the potential in each segment.

The move comes as a booming economy and rising affluence drive demand for entertainment. Movie companies have found it easier to sell their films, thanks to the insatiable appetite of NRI population across the world and the growth of multiplexes in the country. The popularity of Bollywood and the recent spate of hits combined with a drastic fall in prices of DVDs and VCDs have given a boost to the rental business.

Reliance Entertainment will produce 25 to 30 movies within the next two years and about seven to eight animation films. The firm is fully owned by the Anil Ambani family and associates. Its various business units include a movie production business, animation, a movie studio, a social networking site called Big Adda.com, FM radio, movie rentals, online gaming, mobile gaming, a home video unit and theme parks.

The movie rental business of the firm is planning to set up 500 shops in different parts of the country. It will invest $125 million in these shops over the next three years.

The home video unit plans to sell movies of all genres and languages while the theme park unit will set up giant wheels in Delhi and Mumbai on the lines of the London Eye. The firm also plans to enter the broadcast business by launching movie and entertainment channels next year.

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