OTTs driving the VFX boom in India, says head of IPO bound Identical Brain Studios

VFX firm Identical Brains Studios has worked on projects like Rocket Boys 2, Scam 1992, among others.

For visual effects firm Identical Brain Studios (IBS) that is planning to make its debut on D-Street, it all started with a web series for a streaming platform.

The makers of popular series Rangbaaz, streaming on Zee5 were worried about the completion of the project with little time left for its release on the platform. That's when Raghav Rai, Founder and CEO of IBS took up the challenge to deliver it in around 10 days.

The VFX start-up that began its journey with a modest investment of Rs 20 lakh and a rented office space has to thank  the over the top (OTT) platforms boom in India, especially with streaming content contributing 70 percent of the company's business during the pandemic years.

Its biggest project was another popular web series - Scam 1992. Other projects include Rocket Boys 2, Bob Biswas, Night Manager, Criminal Justice 3, among others.

The company's proposed initial public offering comprises a fresh issuance of up to 36,94,000 equity shares with a face value of Rs 10.00, through the book-building route.

Also read: Mumbai VFX firm Identical Brains Studios files DRHP with NSE Emerge; Check the details

Visual spectacle on OTT

"Since OTT became popular among the Indian audience they want international taste in local content due to the exposure to global titles. A lot of international content is heavy on visual effects. To match up to audience expectations, streaming platforms are investing in VFX. Because of OTT, the demand for VFX work has increased," said Rai,  once an aspiring actor who then decided to join an animation course to pursue a career in VFX.

He added that a movie usually has 15-20 minutes of VFX work while a series with multiple episodes involves more visual effects. "A series will have around six to eight episodes of 30 minutes or more each which will have at least 10 minutes of VFX which makes the VFX work a lot bigger than films," he said.

Web series like Rana Naidu on Netflix had over 1,550 VFX shots, Heeramandi used over 1100 VFX shots.

Also, the success of VFX-heavy Indian web shows such as Amazon Prime Video's The Family Man and Netflix's Sacred Games underscores the use of VFX in creating compelling narratives that resonate with viewers.

OTTs are coming up with more projects which are big on VFX with budgets going as high as Rs 50 crore.

The rise of streaming giants such as Netflix has significantly impacted VFX spending patterns. These platforms compete for viewers by offering visually spectacular content. Studios working with streaming services are increasingly allocating larger budgets to VFX, creating high-quality shows that rival Hollywood blockbusters, the company said in its draft red herring prospectus (DRHP).

Growing VFX market

The DRHP added that while the Indian VFX market currently accounts for a miniscule share of less than one percent in the global VFX space, it will grow to above one percent by 2030.

"India is making rapid progress and is expected to benefit from the increasing global VFX market. India’s VFX market is estimated to grow at 15.8 percent CAGR (compound annual growth rate) between 2024 and 2030 against the global VFX market's projected CAGR of 13.9 percent between 2024 and 2030," the DRHP added.

India's VFX market is projected to nearly triple in size, jumping from $647 million in 2023 to $1,823 million by 2030. Meanwhile, the global VFX market is projected to increase from an estimated $84.5 billion in 2024 to $184.5 billion in 2030.

With both the domestic and international VFX market growing, IBS is expecting to maintain its growth momentum.

Eying international markets

In its first year of operations the company did business of Rs 37 lakh, which increased to Rs 2 crore during the first year of Covid.  Business grew to Rs 8 crore in FY23 which further went up to Rs 20 crore in FY24. Rai expects to capture the international VFX market after its IPO.

"We will not open studios outside of India but open small offices with teams. We will hire producers whose work will be to get business from international projects. Even if we get 1-2 international projects it will match the entire business we get from India. Initially, we expect 30 percent business coming from outside of India especially with the market reopening after the Writers' strike which had stalled production of many projects," Rai said.

He added that it was the right time to grab international VFX projects with shoots resuming along with expectations of more work flowing into the Indian market from next year.

Unreal making it real

The founder is also betting big on new technology. He pointed out that advanced engines like Unreal Engine and Unity are constantly evolving, allowing artists to see the final visuals instantly as they work. Also, real-time rendering can accelerate VFX production pipelines which can help with higher quality of VFX work in shorter time frames, allowing filmmakers to meet tight deadlines and potentially reduce overall production costs.

"AI and Unreal also help in ready content so that makers don't have to shoot everything. We did a movie called Bawaal (starring Varun Dhawan and Janhvi Kapoor). We created background through Unreal (Engine) which helped in reducing post production work. If they had to go and shoot in London, it would have increased the cost," Rai said.

Big screen spectacle

Like Bawaal, many Indian movies are using VFX to enhance viewing experience as well cut down time and cost of production.

VFX adoption in Indian cinema is no longer a novelty; it's become a driving force with big-budget productions like Brahmastra and RRR allocating as much as 25-30 percent of their production costs to VFX.

The movie segment captured a 39.7 percent share of the total VFX market revenue in India in 2023.

Rai noted that pre-Covid VFX on an average would account for 2 percent of a movie's total budget which has increased to around 10 percent in the post pandemic period.

But he expects OTT to be bigger than movies for IBS.