Vashu Bhagnani is well-known in Bollywood. Having produced many a commercially successful film, he knows more than a little about risk. “This must be the most unpredictable business to be in,” he says wryly. Sitting in his multi-storied building in Mumbai’s upmarket Bandra, Bhagnani looks slightly uncomfortable in a blazer. He is never attired formally and is most often seen in a Hugo Boss T-shirt. “I own over 300 of them and it’s what I wear even to weddings,” he says in a matter of fact way. If he is somewhat casual about this, it is not an approach he adopts when it comes to managing his money.
Bhagnani’s first love is real estate and it is from there that he took baby steps towards producing films in the mid-90s. “I like to invest in land and anything around construction. Films are more a passion for me,” says the man known for producing films like Coolie No.1, Bade Miyan Chote Miyan and more recently, Sarbjit. “Anything upwards of 11% on a post tax basis is my benchmark,” says the 55-year-old, who has spent over three decades in real estate.
According to him, real estate is flexible and liquid making it ideal for future generations. “One can construct apartments or just leave the land the way it is, which will still give a good return,” he says. Not having to track it on a day-to-day basis is what makes him most comfortable. “It is not like equities, where it has to be constantly monitored. In real estate, one invests and just forgets about it,” is his rationale.
Investment in stocks is restricted to what he has held historically. While realty makes up for half his personal wealth, the rest comes from films. “There is no doubt that cinema is a risky proposition but a lot can be made if one is smart. My own experience is that a successful film can generate healthy cash flows over a ten-year period,” says Bhagnani, who has produced around 30 films so far. In his own words, he likes a healthy combination of risk and security. “I will never invest in a fixed deposit given its ridiculous return in an inflationary environment. It is the worst investment if you are a businessman,” he concludes.
