Surging Interest Payments on Loans Batter Tollywood
The producer stresses that shooting days must be strictly controlled, as each additional day costs anywhere between Rs 10 lakh and Rs 50 lakh, depending on the scale of the project.
Tollywood is quietly grappling with one of its most alarming financial crises, with interest payments on loans escalating so rapidly that they now exceed the principal amounts, pushing several producers into severe distress.
Akhanda 2 is a telling example. While the film’s principal loan stood at around Rs 11 crore, accumulated interest over the years reportedly swelled the total liability to more than Rs 28 crore. Even prominent producer T G Vishwaprasad recently issued a statement confirming that he had cleared the principal amount borrowed for his film The Raja Saab and would soon settle the interest to facilitate its release.
“Several producers today are borrowing and sometimes paying more interest than the original principal, losing their peace and sleep,” says a leading producer. He adds that directors, in the name of creative freedom, often stretch shooting schedules from 75 days to 150 days, leaving producers to bear the financial consequences. “With every passing month, interest mounts and compounds the problem,” he explains.
The producer stresses that shooting days must be strictly controlled, as each additional day costs anywhere between Rs 10 lakh and Rs 50 lakh, depending on the scale of the project. “Directors must realise that the entire financial risk rests on the producer,” the producer adds. Even minor shifts in release dates can cause heavy losses, as OTT platforms often renegotiate deals and reduce payouts if schedules are delayed.
Most big-ticket films such as Pushpa: The Rule, Game Changer, Kalki 2898 AD, They Call Him OG, Daaku Maharaj and Hari Hara Veera Mallu are mounted on massive budgets that cannot be sustained through internal funds alone. “Nobody has that kind of cash,” says producer Raj Kandukuri. “Films with budgets exceeding Rs 100 crore are almost entirely financed by private financiers.”
Explaining the system, Kandukuri says producers typically enter into tripartite agreements involving the financier and the film laboratory (now DI centres). “Until the financier confirms that all dues are cleared and issues a no-objection certificate (NOC), the film cannot be released without hurdles,” he explains.
Adding to the crisis is the sharp decline in the number of active financiers in the Telugu film industry. Producer Lagadapati Sridhar has expressed serious concern over the near-disappearance of reliable funding avenues.
“Financing is crucial for any industry to survive, but unfortunately Telugu cinema is no longer in a healthy position,” Sridhar says. “When I recently tried to raise funds for a project, I realised there are barely two active financiers left. Most others have shut shop.”
According to him, the few remaining private financiers charge steep interest rates ranging from 18 to 24 percent per annum and prefer backing only films starring top-tier heroes. “Getting funds without collateral is nearly impossible. Only the top five or six stars can secure financing, and even they rely heavily on OTT advances and Hindi distribution rights,” he notes.
To navigate the crisis, some producers have begun approaching Mumbai-based corporate houses and major music and media companies such as T-Series, Saregama and Pen Studios. While this has offered limited relief, Sridhar points out that these companies are extremely selective.
