The Hindu Business Line : Pritish Nandy sets sights on `BPO' from foreign films

ITS revenues are now almost wholly from films and at FY03 net sales of Rs 40.13 crore in a Bollywood still warming up to transparency, Pritish Nandy Communications Ltd (PNCL) is arguably on top of the film production heap.

The Chairman of PNCL, Mr Pritish Nandy, says this manager of creative projects, which he founded with a seed capital of Rs 40,000, can become Rs 150-200 crore enterprise in two to three-years' time.

That is when he sees the next phase of PNCL - BPO from Hollywood (or the British or Hong Kong film industries) and distributing Indian films abroad - kicking in.

Exploration of these have commenced, with PNCL recently setting up a fully owned subsidiary in Dubai - PNC International - for film distribution. Initially, the company will tap foreign geographies already identified with Indian film audiences, but it hopes to eventually move into new markets.

Confidence comes from the belief that Indian films are visually rich and capable of relating - albeit with sub-titles or dubbing where needed - to a wide cross section of people. While this is the rationale behind the company's fancy for film distribution, its interest in BPO gains mileage from the cost-effective talent locally available.

Mr Nandy divides prospects therein into three parts - pre-production, production and post-production. Entry into BPO is best had in pre-production work, as in many other areas here too India hosting possibly the best pool of English speaking script, screen play and dialogue writers outside of the US.

A toehold in post-production BPO could entail capital investment for the required infrastructure, but it can be done through alliances.

PNCL has no plans to revive or enhance its exposure to television software. Mr Nandy feels much hype surrounded the well being of channels in the past, while in the present just one or two merit engagement. Consequently, PNCL's focus on film production - begun two years ago - is expected to stay. BPO and overseas distribution draw hope from this focus, but Mr Nandy goes a step further and argues PNCL is really a project manager for creativity.

In conversation, he alludes sometimes to the company's Nariman Point address, a shade as proof of its corporate lineage away from the traditional trappings of Bollywood.

As he puts it, PNCL puts together a team to realise a creative effort, ventures into the industry to source talent and sell the product, work over it steps back from the industry and replaces the old team with a new one for a new project. "PNCL is like a Hollywood studio, it has the over-riding role in project decision making," he says.

Likely true, if its latest release Chameli is considered. Despite the demise of the original director, the film (totally costing Rs 8-9 crore) was delayed by a mere four days.

Mr Nandy says, at any given time, PNCL should be having 10-12 films in various stages of production. And a dozen per year, he claims, is enough to see the company through to the Rs 150-200 crore-mark.

Plus, a financial investor alongside for the ride. The flavour of late in listed domestic media stocks has been for television networks to buy equity stakes in production houses. Mr Nandy concedes there is a life for films on television. Yet even as he remains willing to dilute his near 38 per cent stake, his preference is not for a strategic investor, but a financial one. Hence possibly, the reported talks with 20th Century Fox and no major developments to date.

So, how attractive is PNCL to an investor? It is in Bollywood's big league, has made successful films, is market savvy and has reported profits. Attractive, save a potential downside to what Mr Nandy sees as a virtue - the habit of investing funds from internal accruals in its films. "It disciplines us,'' he says, pointing to the danger in having too much money in a glamorous world. Still, from a financial perspective that enhances risk, doubly so because the company is now only in films.

Going ahead, Mr Nandy says, he will look at institutional finance. Given PNCL's track record, there is money on offer. But the company would like a reasonable interest rate. "Honestly, I would like to borrow at 5-6 per cent," he says. No wonder, that Nariman Point address.