‘The clause spooked Karan Johar’: Sanjiv Goenka shares why RPSG missed the chance to acquire Dharma

When asked if he regrets saying no to the deal, Goenka admitted, “I am disappointed that I didn’t get the Dharma deal. Sometimes it is also a lesson in how much to delegate and at what time to delegate. Too much delegation doesn’t necessarily work. This is one example.”

What is a drag-along and tag-along clause?

In mergers and acquisitions, drag-along rights allow majority shareholders to force minority shareholders to sell their stake if the majority agrees to a sale. Tag-along rights, on the other hand, protect minority shareholders by allowing them to join (or “tag along”) if the majority sells its stake, ensuring they get the same price and terms.

Goenka on films, content and IP

When asked if Goenka is still interested in movie production and distribution, Goenka made it clear that RPSG has already produced 26 movies under Yoodlee Films.

“It is a business that has not done as well in the last couple of years as it has in the past, but I do believe content and IP are two very important businesses. If you have content and if you own IP to that content, there will be more avenues for monetisation as technology progresses,” he said.

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Karan Johar on selling Dharma Productions stake to Adar Poonawalla

Johar has previously spoken at length about why he eventually sold a stake in Dharma to Adar Poonawalla, CEO of Serum Institute of India.

On Raj Shamani’s podcast last year, Johar said, “In 2023, we realised we need to leverage and grow. In our business to grow organically would have taken me another 5-7 years. I needed the fund to grow and today, I am happy with my partnership with Adar. He is an amazing human being and his instincts are very strong.”

In another interview with Komal Nahta, Johar revealed that funding constraints had stalled several ambitions. “I had many dreams that weren’t able to get fulfilled because there was a funding issue. I was very clear that I am okay to sell 50% of my company or to sell equity, only because I want to expand. I want to leave many legacies behind, within the company. Me and Apoorva, who work like brothers, had decided that we would do this but we needed the right partner. It so happened eventually that Adar and his wife Natasha have been my close friends, very dear to me. He picked up the phone one day and said that I am interested, but I told him that this is not your business. He said he also wanted to expand.”

Johar added that his longtime collaborator Apoorva Mehta played a key role in closing the deal, assuring him that Poonawalla would not interfere creatively.

“we haven’t lost any creative control. There are cheques and balances because when there’s a partner, you become more accountable. We got an investment for expansion, I was able to immediately open a distribution arm and talks are going on to do something big with the music arm. Adar is somebody we turn to, when we want to do bigger deals. Apoorva and I lean on him for advice,” he added.

The deal

In 2024, Karan Johar signed a Rs 1,000 crore deal to sell 50% stake of Dharma Productions to Adar Poonawalla through Serene Productions. The remaining 50% continues to be held by Johar, with Apoorva Mehta serving as CEO.