The Business of Bollywood

 The poster boys and girls of Hindi cinema have forever commanded meteoric paycheques. Whether their blockbusters make it to the 100 crore club or not, there’s hardly a change in their brand equity. And with most signing endorsement deals ranging from fairness creams to innerwear brands, there are few professions that offer the kind of remuneration that the film industry does. Traditionally, the stalwarts of Hindi cinema have relied on tangible investments such as real estate, given that it was one that offered assured and significant returns. But in recent years, they’ve begun to see the value in varied industries from healthcare and wellness to fashion and e-commerce.

Call it the entrepreneurial bug or a retirement plan, but our tinsel town celebs have surely gotten adventurous. Srikanth Subramanian, Senior Executive Director, Kotak Wealth Management says, “The film industry is a tough industry, you can fall out of favour at any time. Also, you have a limited lifespan and are a victim of the vagaries of the movie business itself. Hence, most celebrities have realised the power of diverse investments — to secure their future or for financial prudence and discipline,” he says. Even Raamdeo Agrawal, MD, Motilal Oswal Financial Services feels that those from the film industry prefer investments with long-term returns to insure themselves in an unpredictable market and to be able to retain their high-flying lifestyles even after the camera turns away.

“The problem is that they get money in short and sporadic bursts so there is a lot of uncertainty. Even the biggest celebrities can’t be certain that producers will continue to approach them in the future. But irrespective of earnings, they have to maintain their lifestyles in the long run,” says Agrawal.
 
Charting new zones
For decades, Bollywood stars have invested in the film business and real estate. But now, they seem to be looking beyond the obvious, willing to put their money into projects that are out of their comfort zone. “I think it’ll be fair to say that in the last 4-5 years, celebrities have become more professional in managing their wealth. Earlier, many of them were unorganised. But now, quite a few are crossing over to institutions to have their wealth managed, especially the bigger names. Otherwise, the confidants can be chartered accountants or family members who understand finance,” says Subramanian.

This renewed interest in investments coupled with professional help has lead to some changes in their portfolio. For one, they opt to have diverse investment portfolios rather than sticking to run of the mill options. “Unlike the common perception of them having a set of focussed investments, whether its art or real estate, we actually find them to be pretty smart and prudent about making an investment across asset classes. So most of them will follow the same asset allocation principles like any large financial investor would,” Subramanian reveals. Ajay Devgn, for instance, doesn’t believe in putting all his eggs in one basket. “I have invested in lots of things, in fact, I have invested a lot in the industry itself. I have opened theatres, started a VFX Company. I have also invested in solar energy and real estate deals so that the money rolls.  If you have some money, you will invest it somewhere or the other and there’s no harm in it. It is your choice how you do it and it varies from person to person,” he says.

Driven by passion
This diversification has also given celebrities a chance to invest in projects they are genuinely passionate about. Malaika Arora, for instance, recently ventured into the fitness industry by launching her own Yoga studio in Bandra called Diva Yoga. The actress tied up with Exceed Entertainment, a celebrity management and marketing company, and with Zorba yoga studio to birth this elite yoga centre. When asked what motivated her to launch the studio, the actress-turned-entrepreneur says, “When you strongly believe in the purpose of what you do, it subsequently becomes an extension of oneself. My passion for the fitness and wellness space is what drove me to conceptualise Diva Yoga. Yoga as a fitness form is essential for all-round development of a healthy mind, body and soul,” she says.

And it is this genuine interest that drives all her investments. The actress gives the example of her association with The Label Life, a luxury lifestyle brand that sees its collections ‘edited’ by style gurus Sussanne Khan, Malaika Arora and Bipasha Basu. “The Label Life is more than an association for me; it is driven by my know-how in the fashion space. I believe that every body type can be styled right and that fashion is unbiased. My passion in the fashion, fitness and wellness space stays core to the ideology of any association or partnership. An extension to this is the right mix of teams working towards the same purpose,” she says.

This philosophy lies behind the creation of Rheson, the high-street fashion brand launched by Sonam Kapoor Ahuja and her sister, Rhea. When asked what motivated her to launch the brand, the actress had said in a previous interview, “I had a lot of offers to put my name on brands and it was obviously because people like my fashion, so Rhea and I thought, ‘why don’t we make our own brand?’ Also, I didn’t want to be associated with something I didn’t believe in. We wanted to work on something that is owned by us and had our personal touch. We wanted to make fashionable garments accessible, affordable, especially for Indian girls.”

Arjun Rampal, who is looking at launching two restaurants of his own soon, and in the past, opened a nightclub which enjoyed a short run, reveals why the food service industry attracts him. “It feels good when you walk into your own restaurant or club and you see people enjoying themselves. Also, when I went to Delhi, I heard people weren’t feeling safe; girls were not going out. But girls used to frequent my restaurant as it’s a safe place, and I am going to open more. I like hospitality and enjoy it. I am opening one restaurant in Dubai and one in Mumbai, somewhere in BKC, and am in the process of locking property.”

Actor Sonu Sood too avers that it is interest that drives his investments. He says, “Since I am a health freak, my interests lie in venturing into something related to it. I did set up my gym in my hometown, Moga (Punjab) for fitness enthusiasts who can avail the services free of cost,” but adds that he is not too restless when it comes to earning profits from such investments. “The bigger the investment, the bigger the profit or sometimes you have to face losses as well. If I do have confidence in what I’m trying to set up or work towards, I’ll definitely wait for it patiently to grow,” declares Sonu.

Bollywood’s angels
Till a few years ago, celebrities looking to invest in startups treated them like another endorsement. They would exchange the use of their name for the company’s equity. Now, things have changed and they are investing real money while also more actively helping the business grow. They are choosing to support ideas whose concepts and products align with their passions and beliefs. Subramanian notes how startups are quickly becoming investment magnates when he says, “Financial investors look at startups as an interesting financial proposition. In the case of a celebrity, it’s a mutually beneficial association where the startup gets credibility and reputation for being associated with a well-known name and if the startup does well, the investor or the celebrity stands to profit from the investment.”

Actress Jacqueline Fernandez’s investment in cold-pressed juice brand RAW Pressery is a good example of such a conscious investment. The actress was a satisfied consumer of the product before becoming an investor in the brand. Smritika Sharma, Head of Marketing at RAW Pressery says, “She absolutely represented the interest of coming on board and said that she would love to be a part of this cold pressed juice revolution. Also, she herself is a consumer of the brand, so that made the conversation very easy. The brand lies in the lifestyle, wellness, fitness space, there’s a lot of yoga that we’re involved with, which is her world as well. So, it’s not forced from the brand’s end or her end, but is a part of her daily life. So it’s very easy for her to be invested in it. It’s a very symbiotic fit, which helps us.”

Another similar symbiotic association exists between Alia Bhatt and StyleCracker, a startup that prides itself on being India’s only fashion subscription service. Co-Founder of the brand, Archana Walavalkar, had worked with the actress as a costume designer during her first film, Student of the Year. Archana says, “It was around this time that I started conceptualising StyleCracker, so she had known about it since the very beginning. Alia has been someone I’ve always bounced ideas off of and she’s definitely someone who gets the pulse of the Indian consumer. She understands the need and the benefits of personal styling and how important it is to celebrate individuality. So she was a natural fit to become an investor in our brand.”

This also seems to be the case for actress Shilpa Shetty Kundra, who in 2018, invested a reported `1.6 crores in the mom and baby care startup, MamaEarth. The actress, who is a vocal supporter of fitness and healthy lifestyle choices will also be launching her own wellness brand and says, “My investments have to be synonymous with me, my philosophy or my way of living and should be something that I would practice and preach.”
 
Hands-on investors
 While celebrities have changed the startup game by investing heavily on good ideas and talent, their involvement doesn’t stop there. In reality, they are also sharp investors with good business acumen. And so, they don’t function as passive investors, who merely invest money, but also take active part in activities associated with the brand. They choose to invest their time, knowledge and often utilise their celebrity connections to give the brand an added push. “I always feel that it’s very important for an individual to make the brand grow bigger. Whatever brands I choose, I sometimes tweak the creative strategy or participate in the planning process. I think this way, the brand also benefits from our experiences. I always sit with the creatives and share inputs, so that we can all grow together,” says Sonu. Smritika reveals how Jacqueline takes an active interest in the activities of RAW Pressery and says this often includes providing feedback about the flavours, discussing target audiences and participat
ing in promotional activities. “She always wants to know about new products launched, the market we’ve reached out to. Sometimes, she gives feedback on the way certain products taste. She participates in a lot of gifting and engages with the consumers and influencers even during on-ground launches. Many times, she reaches out to her own network when we’re launching something new and gives us access to her own circle,” shares Smritika.

The same is the case with Alia Bhatt, and underscoring her participation, Archana says, “She’s always very excited and supportive of all the disruptive heights the company aims to achieve and comes up with some incredible ideas for the same. She is constantly in touch with us and provides inputs and feedback to keep optimising the user experience for all StyleCracker members.” The entrepreneur also hints at how Alia taps into her large fan base to create awareness about the brand when she says, “As an investor, she’s introduced the concept of making fashion really convenient and easy to use for all her followers, which is almost 30 million people strong on Instagram alone. That’s almost a third of India’s population.”

While Shilpa Shetty Kundra too likes to be involved in the decision making process, she says that she avoids going overboard. The actress opines, “There is always a personal involvement and we always take collective decision in partnerships, but I don’t like to get over-involved because too many cooks spoil the broth!”

— With inputs from Uma Ramasubramanian