It’s been a hit-and-miss 24 months for Eros International and shareholders are getting twitchy.
Even as the Bollywood studio celebrates the surprise success of its recent release ‘Tanu Weds Manu’, it is still recovering from some very high profile flops, including the likes of the disastrous Rajnikanth-starrer ‘Kochadaiyaan’ and ‘Tevar’.
The company’s share price has suffered as a result.
Kishore Lulla-helmed Eros – which is listed on the New York Stock Exchange and has a market cap of more than £800 million – has seen its share price drop by 20% over the first five months of 2015.
Now one of the company’s shareholders, London-based Knight Assets, is calling for action.
The Wall Street Journal reports that Knight Assets has sent a letter to Mr Lulla – son of Eros founder Arjun Lulla – detailing the direction Knight would like Eros to take.
Mayfair-based Knight, which has stakes in Tata Motors among others and owns around 2% of Eros, has reportedly called for Eros to divert more resources into the company’s ErosNow streaming platform which in a bid to improve value for shareholders.
The letter, seen by WSJ, states: “We firmly believe that a significant and sustainable long-term uplift in shareholder value will be achieved through concentrated strategic focus and allocation of substantial resources to the development and user adoption of the ErosNow platform as the core of the Company’s operations.”
ErosNow – a service similar to Netflix – boasts India’s biggest movie library with nearly 3000 titles.
Unlike Netflix and other services, uptake of ErosNow has been slow, not least due to poor internet connectivity.
Eros’s management has also said it agrees with another Knight Assets recommendation to drop plans to build a TV network in India.
While ErosNow hasn’t exactly been stagnating – the service boasts 19 million users and revenues of more than £40 million – Knight wants more to be done, including diverting resources currently being used by Eros to build a new TV network.
The good news is that despite the fluctuating fortunes of Eros’ film production and distribution business, the rest of 2015 looks bright.
While the verdict on Salman Khan over the 2002 hit-and-run case saw Eros’ share price tumble in India, Khan’s subsequent release on bail ensures that the company will have a sure-fire hit in ‘Bajrangi Bhaijaan’.
Another Eros release – Sanjay Leela Bhansali’s ‘Bajrao Mastani’ – is also expected to be one of the year’s biggest blockbusters.