In an interaction with Dr Ishari Kadhirvelan Ganesh, Managing Director of VELS Films International Limited
We intend to diversify and expand into the Hindi and other regional language film markets such as Telugu, Kannada and so on, to increase the scale of our presence, states Dr Ishari Kadhirvelan Ganesh, Managing Director of VELS Films International Limited.
What is the main objective for raising funds (IPO)?
On October 25, 2019, our company was incorporated in Chennai as ‘VELS Films International Limited’ and within three years, three of our Tamil language films were released. The company is a member of the South Indian Film Chamber of Commerce and its contribution to the south Indian film industry is rapidly expanding, particularly to the Tamil film industry, which is India's third largest. Our company's primary goal is to strengthen our position in the South Indian film industry, and this IPO will pave the way for that to happen.
Up to Rs 28 crore of the net proceeds will be used by the company to fund Tamil language film projects that we plan to produce in fiscal 2023. Remuneration to the star cast, and crew, shooting expenses, post-production costs, and marketing and advertising costs are all included in the total cost of film production. The remaining proceeds, amounting to Rs 5.14 crore, will be used for general corporate purposes, such as operating costs, initial development costs for projects other than the ones that have been identified, the strengthening of our business development and marketing capabilities etc. The total cost of this issue is expected to be around Rs 60 lakh.
What is the growth outlook for your company and how will the listing help you achieve your objectives?
There are multiple projects we are working on, including ‘Singapore Salon,’ ‘PT Sir’ and an untitled project that is 90 per cent, 60 per cent and 85 per cent completed, respectively. In addition, three other projects, namely 'Corona Kumar,' 'Chutney Sambar,' and one untitled, are in the initial stages. The listing will not only provide us with an opportunity to raise funds to support our new projects, but it will also boost the company's reputation by allowing us to expand our reach. We believe that ‘VELS’ and ‘Dr Ishari K Ganesh’ have a decent reputation in the south Indian film industry.
Also, for the theatrical release of our films as well as their distribution on OTT (Over-The-Top) platforms, our rich experience and relationships with south Indian film distributors will be a great asset. Our company is managed by a team of experienced and professional personnel with rich experience and knowledge, which enables us to develop strong business models and effectively execute plans. The expansion of multiplexes, opportunities offered by OTT and other digital platforms, improving market conditions, and opening of the market in other regional languages are all favourable factors for the business soon.
What are the key risks to your business?
The major risks that our business currently faces include competition from well-known production houses, piracy and the violation of intellectual property rights, as well as frequent and expensive technological changes. Moreover, a rise in interest rates, inflation and a slowdown in the economy may hurt the entire business as people are likely to spend less under those circumstances.
The business relies on cinema theatre operators functioning properly to present our films. If cinema theatre operators are unable to show such films, as during lockdowns, our business and ultimately financial performance may suffer. Our subsidiary is currently constructing an amusement park, a water park and various entertainment zones, which are expected to be completed in the financial year 2023-24. Given the current inflationary situation in India and around the world, there is a risk of cost overruns. Such delays and higher costs could be potential risks for the company.
What are your top three strategic priorities right now?
Our mission is to establish ourselves as one of the leading film production houses working in regional languages, and we have developed a few strategies that will assist us to get there. In addition, we have some strategic priorities, which include the aim to expand our production activity to produce films which will cater to every need of Indian viewers and strengthen our position as a production house through continuous innovation and a better understanding of the viewership trend.
We intend to diversify our content library and expand further into the Hindi and other regional language film markets such as Telugu, Kannada and so on, to increase the scale of our presence in this market. We also intend to make better use of our industry connections in the growth and development of our filmmaking business.