Adlabs to enter home video mart

Adlabs Films, managed by Reliance-Anil Dhirubhai Ambani Group, plans to foray into the home video segment through the organic route.

Initially, the company was in talks with leading players in the home video segment for a possible acquisition, but owing to differences in valuation figures the company has decided to venture out on its own.

Manmohan Shetty, chairman and managing director, Adlabs, said, "We were initially looking at acquiring a company to give us a jump-start in the business. But, we have now taken the decision to start up on our own as an acquisition is not working out."

The company is currently in the process of drawing up plans for the segment debut.

The company had earlier sounded out all the established players in the industry for a possible buyout, including Shemaroo, Excel Home Videos and the Ultra group.

Apparently, Adlabs and the players, with which it was negotiating, were unable to reach a consensus on the companies' valuation front and, hence, the proposal of an acquisition fell through in each case. Adlabs feels that venturing out on its own would amount to more value for money.

Recently, the company raised $100 million through issuance of foreign convertible currency bonds for funding its various expansion projects including the home video segment foray.

The other players, who too are eyeing the home entertainment sector, are Sahara One and UTV. These two companies are already into production and distribution of movies.

Of total market size of close to Rs 1,000 crore, the official home video entertainment market size is currently estimated at Rs 180-190 crore.