Panorama Studios Secures ₹65 Crore Credit Line from Kotak Mahindra Bank

Panorama Studios International's board has approved credit facilities totaling ₹65 crore from Kotak Mahindra Bank (KMBL), along with an in-principle offer for an additional ₹10 crore.

These funds are intended for the company's principal business activities.

Approval Details

The company's board has approved credit facilities aggregating ₹65 crore from Kotak Mahindra Bank (KMBL). These facilities, covering both fund-based and non-fund-based services, will support the company's core business operations. KMBL has also offered an in-principle facility for an additional ₹10 crore.

The approved credit facility will be secured by the hypothecation of current/movable assets and a mortgage of specific immovable property.

Importance for Business

This credit line offers essential working capital, helping Panorama Studios manage production, post-production, and distribution more effectively. It confirms the company's ongoing access to banking finance for its operations.

Financial Background

The media and entertainment sector is known for its volatile, hit-driven model, leading to fluctuating revenues and profits. Historically, the company has managed its capital through debt and equity. Total debt has increased from ₹257 million in FY2021 to ₹792 million in FY2025, although reports indicate a relatively low debt-to-EBITDA ratio recently. However, free cash flow has been negative in several recent years, highlighting cash generation challenges.

The company has also pursued capital optimization strategies, including a bonus issue and amendments to its Memorandum of Association to invest idle funds in securities.

Impact for Shareholders

This approval gives shareholders a clearer view of the company's access to vital banking credit lines. The ₹65 crore facility is secured against company assets, backing immediate and near-term operations. If finalized, the additional ₹10 crore offer would further boost the company's financial flexibility.

Key Risks

The film industry's 'hit-driven' nature means financial performance remains highly volatile and unpredictable. Recent financial reports have indicated signs of strain, with declining net sales and profits in certain quarters, alongside increased interest costs signaling higher borrowings.

Negative free cash flow in recent years could pose challenges for long-term financial health and debt servicing capacity. The credit facility is secured by company assets, meaning a default could lead to the seizure of these assets.

Industry Peers

Pantheon Studios' financing approach contrasts with some industry peers. Eros International Media Limited recently achieved a debt-free status in India after repaying approximately $56 million. Zee Entertainment Enterprises maintains a strong position, largely debt-free with significant net cash, while Balaji Telefilms also boasts a robust balance sheet with minimal debt.

Financial Capacity

Panorama Studios has a shareholder-approved borrowing limit of ₹1250 crore as of September 2025, offering significant room for future financing.

What to Watch Next

Investors should monitor the finalization of definitive agreements and necessary approvals for the additional ₹10 crore in-principle offer from KMBL. Also, observe the completion of documentation and the creation of security for both credit facilities. Keep an eye on how this credit line is utilized to support production pipelines and its impact on upcoming film slate releases and financial performance.