MUMBAI/HONG KONG: Bollywood is increasingly becoming a target for corporate takeover, as more of India’s multi-nationals diversify into movies to tap the market’s huge investment potential.

Tata Group first tested the water several years ago. Now others, such as cars to financial services group Mahindra and Mahindra, the CD and DVD maker Moser Baer and even pharmaceutical giant Ranbaxy, are getting in on the act.

Mahindra and Mahindra’s media ventures company is putting the finishing touches to its first film, “Mumbai Chaka Chak” (Sparkling Mumbai), about a Mumbai road sweeper.

The company’s chief executive, Indranil Chakraborty, said the time was right to enter the film industry, as it was being driven by a new generation of young Indians and like television was expected to grow in the coming years.

“No one knew that television and entertainment business would have become so big 15 years ago. So, we want to be here and do good content films,” he said.

“We are entering into films with this medium-budget film. ‘Mumbai Chaka Chak’ is a comedy caper and is a very good subject that we feel will appeal to the masses.”

Some 1,146 films were made in India in 2007, according to the Federation of Indian Chambers of Commerce and Industries (FICCI), which produces an annual report on the country’s entertainment sector.

But although that beats Hollywood, its estimated worth was considerably lower at 2.1 billion dollars.

FICCI has suggested, though, that new technology, production techniques and marketing, plus more global audiences could see it grow to 3.9 billion dollars by 2011.

The rules of Bollywood have been changing ever since Anil Dhirubhai Ambani’s Reliance group bought the film processing unit Adlabs in 2005. Adlabs now processes 70 per cent of all Hindi films made in India.

Another Ambani offshoot, Reliance Big Entertainment, announced in May it was to invest one billion dollars to make scores of Indian films and expand its film distribution business in India.

It also unveiled deals with production houses of top Hollywood stars.

Moser Baer has dominated the home entertainment market for the last three years. It is planning to produce half a dozen films by next year, including some in Tamil and Telugu.

Elsewhere, newer production houses are raising capital from stock markets.

Film is big business as multiplex cinemas pop up in Indian cities, increasing ticket sales.

But for the time being the corporates are starting small.

“Mumbai Chaka Chak”, for example, cost just under 2.3 million dollars to make. Moser Baer’s small budget film about life in the military, “Shaurya” (Bravado), hit screens earlier this year, making modest profits.

Moser’s chief executive Harish Dayani said: “One of the reasons we are doing this smaller films because we get a first hand experience in the film making business and even if we make mistakes we learn from it.

“These mistakes will help us to understand the business better and help us while we make bigger films.”

For film director Kunal Kohli, big business backing has benefits for both sides.

“The corporates are bringing in structured finance and it is only helping the industry,” he said. “They are bringing their expertise and corporate ways that is only benefiting the industry.

“No one puts money in business if they are not sure about recovery. They are putting their money because they know they will make money.”

Kohli’s colleague Vikram Bhatt, who was the first to direct a film backed by the Tata Group in 2004, agreed.

“The best thing the corporates introduced in Bollywood was the cheque payment system,” he said.

“They paid your money on time and it was always credited. This system was not heard of in our industry earlier.”

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