Will continue to invest in libraries for content: Shemaroo

Shemaroo Entertainment is looking forward to working with virtually all major players in the digital eco-system, says Hiren Gada, Wholetime Director and CFO of the company.Speaking to CNBC-TV18, he says the company will continue to invest in marquee libraries related to content and the key funding source for acquisitions will be internal accruals and debt. Shemaroo has recently acquired libraries from Red Chilies Entertainment.The company's debt to equity ratio stands at 0.6–0.65 percent and the recent re-rating by CARE and Fitch was on the back of stock financials achieved over the last few years, he adds.Gada is of the view that Shemaroo's new-media business, which is growing phenomenally, will further gain from the launch of 4G data service. This will boost video consumption, he adds.Below is the verbatim transcript of Hiren Gada\\'s interview with Ekta Batra & Anuj Singhal on CNBC-TV18.Anuj: Top on mind right now is your possible tie-up with Reliance Jio or couple of other people for content sharing. Could you tell us in terms of any negotiations that you have done with any of the companies and at what stage they are and at what time can we hear on that?A: I am not in a position to talk about individual negotiations that are going on but suffice to say that we are a large content owner; we control a library of few thousand films. However, given the quality and quantity of library today, we are working with every platform whether its television space but more importantly on the digital space. We have a large presence on all of them.As our model indicates, we are an agnostic distributor across all platforms, so we are in talks with different people at different stages. We already have some content up on platforms like Spool, Hook or Hotstar. So today all the major players in the digital ecosystem, we should be looking forward to working with them.Ekta: You also got a rating upgrade from CARE recently. You don\\'t have much debt on books at this point but what is your capex which is planned in terms of content and would that involve an incremental amount of debt on books?A: I would like to correct that our debt equity ratio would be around 0.6 to 0.65, so we do have certain amount of debt and it is the process of rating for our various limits in which CARE has, and earlier Fitch has also given us good rating and we have got an upgrade given the strong financials that we have achieved over the last few years. Going forward, we will continue to be in investment mode in terms of further content acquisition. As I mentioned earlier we have marquee library from Red Chillies Entertainment etc, so definitely we continue to remain in an investment mode and the key funding source at that stage apart from internal accrual is going to be debt. Anuj: Would it be fair to assume that the next financial year, this financial year has been good for you but the next financial year may not be as good because a) the base effect will go up and b) you will be in investment mode.A: We have been in an investment mode for about four years. We have more than doubled our library both in terms of number as well as we have enhanced the quality through tie-ups like Red Chillies library. The good thing is that the new media business has been growing phenomenally well and therefore it has given a fillip to the investments that have been made. And also if we see the landscape, given the impending launch of the broadband 4G services, the major beneficiary of that is going to be video consumption and that is what we have positioned ourselves for in terms of all of this investment in the content that we have made. In fact in that sense we are well poised to take advantage of the growth that is expected in this space.