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00:00 there and the company's name is Basilic Fry Studios. It's a company which is involved in VFX
00:06 space. It came out with an IPO which was of nearly 66 odd crores but it got an overwhelming
00:14 response from investor community getting over 14,100 crores of bids. Joining me is Mr. Balakrishnan
00:22 who is the MD and CEO of the company and Miss Yogalakshmi S who is the COO and Director of the
00:29 company. Mr. Balakrishnan and Miss Yogalakshmi, thank you very much for joining us on BQ Prime
00:35 today. Congratulations on the kind of bids that you received for your IPO. When do you expect the
00:41 IPO to list on the markets? The date is yet to be finalized. We expect it could be either be 13th or
00:49 before that but we will have to finalize maybe with the decision of the team as well.
00:56 Very surprised by the kind of response that you got from the investors?
00:59 Yes, we are quite surprised with the kind of overwhelming response in the market and we
01:06 thought that there would be a good response for us but the kind of response that we received is
01:10 really overwhelming and we would like to thank everyone who took the time and we use this
01:14 platform to thank everyone who took the time to invest and that kind of faith really kind of
01:20 puts us in a responsibility where we really need to pay back the faith.
01:24 You have opened up a venue of new age companies especially with respect to VFX and all coming
01:36 into the market. Give me a sense of how big the opportunity is for you and when we say VFX,
01:43 it involves a lot of stuff. Can you give us some kind of a primer to what exactly you do,
01:51 what kind of work you do and if you have such a body of work that you have already done
01:57 with examples saying what all you did for that?
01:59 Yeah, as you mentioned this getting into public for a visual effects company means a lot to us
02:06 as an industry and as an industry I must mention the general awareness that is created among the
02:12 public about visual effects industry is that would really help our industry to thrive along
02:18 and as in what we have seen over the years that IT revolution in the early 2000s and now the content
02:24 revolution now currently the last three four years and really looks to take up from here and
02:31 we see a visual effect company will play a major part in producing more visually appealing content
02:37 and that way it would really help us as an industry to grow along and as you asked about
02:43 the projects and the kind of work that we do, we do from end to end the work on movies that
02:48 we have involved in right from pre-production to final delivery. As a company we have global
02:54 teams across in London as well as in Vancouver and planning to have one in LA so these things
03:01 will really position us to work right from this script breakdown to delivering the final project,
03:05 final output to the client. If you look if you take up some work like set extension we do a lot
03:10 of set extensions for projects, television projects and movie projects and likewise we do other
03:16 stuff as well like effects, lighting that really involves producing high-end visually appealing
03:22 images for the films. So from a layman's point of view if you know we are used to seeing the movie
03:30 the end product you know so when we go and see a movie of which you have done maybe Avatar or
03:36 you know any other movie which you have done what part of that is being produced and you know
03:44 created by your VFX studios just to get a feeling of the kind of contribution that has gone into.
03:50 Yeah when you take a movie like the League of Avatar I think there would be major VFX studios
03:57 like where the VFX studios like Quetta Digital and those other studios would be involved in those
04:02 movies and as in we do we do like maybe we play a part in those movies and we play a support role
04:10 as in we get along when we do work on those movies and likewise as a company we also get
04:15 into work on some other movies as well where we do get to play a substantial part and for Avatar
04:20 we have received the end credit as a company and we have done a very good support role for that
04:25 movie and likewise if you take other movies and episodics where we have done also played a
04:32 substantial role as well so it depends upon different projects where we get to do a substantial
04:38 role and we also do get to do a support role for a few other projects but as in you look into the
04:45 end product that we have delivered it will be of all of our very top-notch quality because that's
04:49 where we are and as a company we need to make sure that we deliver the highest quality content and
04:55 the margin for error is very less because we work for these kind of movies.
05:00 Okay, Mr. Yogalakshmi, managing manpower is probably the biggest challenge for you I guess
05:09 because skills is something which is very rare in this field and it's an evolving sector for
05:15 in India as well. How do you do that? How do you manage skills? Is there a way you
05:22 bring people across so that they stay with you because these are very high skill sets which
05:29 are required in this for this industry? Yeah, so there are two ways we keep hiring. We always hire
05:36 good talents across the country, across wherever sites we are opening up. We kind of recruit a lot
05:41 of talented people and similarly we also train a lot of students and fresh people from the industry
05:50 who get trained from some academies and all. So we get a fine combination of all level of artists,
05:58 so senior, mid and junior. So all put together we make a very good composition of the team.
06:04 Do you have a specific skill set that are required and do you have a training program
06:14 as well for future to create future VFX artists? Yes, we do have a lot of training programs.
06:22 Basic level of trainings we manage it in-house. We have a good training module that we put in
06:28 the trainees who come into the company. They get trained rigorously over the training module for
06:33 more than three to six months and once they are ready they are put into the production.
06:37 This is for the trainees but we have training program going on for the artist level, like
06:42 senior, mid-level artists who wants to get trained into the other departments are also given
06:46 opportunities. We tend to give collaborative training from the overseas trainers or the
06:52 mentors who are working from ILM or from very significant background who have a lot of
06:57 experience in the industry. So that is how we train the artists from one department to the
07:01 other department and also we kind of always make sure that the company has a other level of
07:07 training also internally happening. So both the things we kind of maintain it.
07:10 Mr. Balakrishnan, give me a sense of how big is this industry in India?
07:19 Who are the major players there and how have you seen because you started in 2016. It's almost nine
07:27 years that you've been here. What has been scaling up like for you?
07:32 If you take in the last 10 to 15 years, the industry, VFX industry in India has grown
07:39 leaps and bounds. As soon as I started in year 2006, there wasn't much in the sense,
07:46 the industry was very conservative during the stage but now if you look into the global players
07:52 have come into India and have set shops here in India, that means there is a lot of reliance towards
07:57 and the Indian talent, the potential of Indian talent for the contribution towards the global
08:03 market has grown really high over the years. So that is something is very visible when you look
08:07 into the last four, five years where multiple other companies that has come from either be UK
08:13 or else from US and Canada have come into India and likewise as the company which I've started
08:19 which where we have started from India, we see this as a lot of opportunity where we have already
08:24 have a talent base here in India and have aspirations and also we have set up global
08:29 teams in London and likewise in Vancouver. We wanted to take this forward in a way where we can
08:34 collaborate with global teams and collaborate with global teams where Indian talent would
08:40 collaborate with the western experts and that would really mean a lot as in our team in India
08:46 would be empowered as in they work more because they have more exposure, maybe the team from
08:52 creative leadership team from LA and Vancouver would have that expertise where they have worked
08:57 with, worked on the industry for 30 years where they would have gone from all on set and being
09:03 part of movies where right from pre-production to final delivery. So that kind of exposure will be
09:08 shared and that would really empower the team here in India and likewise we see this as an
09:13 opportunity where it would really work out for us in terms of breeding Indian talents to a global
09:18 level, understand what is needed to deliver. We already are there but there are a few other
09:22 aspects where we'll have to really develop and empower so that will really take us to places
09:28 where we can completely conceive on the overall process of visual effects. You've raised around
09:34 60 crores in a fresh issue in this round from the IPO market. How do you plan to deploy that?
09:43 There are various plans that we have in place. One is to work towards our technology part,
09:48 technology and infra. When I say technology it will be towards automating our pipeline,
09:53 the flow of work which we have done already and to emphasize more on that and create more
09:59 efficiency towards that process and likewise in AI as well as I think that we are focused on and
10:05 other thing is we have other plans to have two more facilities, one in Hyderabad and one more in
10:11 Salem. So that is something we will work towards and the fund would also go towards those plans
10:17 and otherwise we also plan to build a more sizable team. We have a small team in London but
10:22 we will also build a more sizable team in London and because we don't want to restrict
10:27 ourselves in terms of our aspiration, we want to really go big and want to build a global company
10:33 in the fewest time and be involved in projects and collaborate with major filmmakers and be
10:39 the cherished entity where we can really look for things to bring the creative freedom for
10:45 the filmmakers as a company by involving ourselves into more innovative methods of storytelling and
10:52 by bringing up our technology and creative expertise. So that is where we are and that's
10:58 where the funds will really go into. So this would really help us to evolve as a company
11:03 and we see because our as in as a company as in we grow this would be directly in proportional to
11:11 how the VFX industry in India also would grow in the next four five years. So we want to take up
11:16 this opportunity and make sure that we utilize it more completely. Give me a sense of you know
11:22 you have two major centers Hyderabad and Salem in India. These are studios I assume which is there.
11:30 Is there a plan to set up such similar studios in UK or in the US or Canada?
11:35 Yeah we already have smaller teams over there and we would try to build on top of that and
11:42 we will try to build a maybe blend of creative leadership team out there globally that is
11:48 either in London and likewise Vancouver and maybe in LA as well that's a part of a plan.
11:54 So that is already there and yeah so likewise what we do here in Hyderabad. Hyderabad would be
12:00 of a much bigger scale where we will look forward to have much a bigger team here in India and that
12:05 will really allow us know as a company because the talent is something that we could able to
12:10 really work out here in India and we have a very good talent pool available now and we want to make
12:16 use and likewise the potential that we can you know the expertise that we can bring from the
12:22 west because we have the kind of exposure being part of a much bigger either be Hollywood projects
12:28 or else more creative projects so that expertise and blend with the Indian talent would do really
12:35 wonderful for us as a company. Mr. Yogilakshmi you know what is interesting is that the kind
12:40 of scale-up that happened over between 2022 and 2023 your revenues jumped 3x you know
12:47 profitability from 90 lakhs to over 25 crores which has gone that's very you know that's what
12:53 you know caught the eye of the market saying that you know the opportunity which is coming from VFX
12:58 for you and but it also puts a big responsibility on our head because you have to grow now every
13:04 year now that you are in the market you have to grow and show the growth to the market so
13:09 you know are we going to see the same kind of growth going forward as well?
13:14 Yeah very much yes in the planned rate growth rate we are we should we are expecting around
13:19 30% but having this IPO done we should at least have 50 to 70% of growth year on year so that is
13:26 what our plan is for the future. Okay and is there a margin kind of thing that you work in in the
13:34 VFX space how is it actually just for understanding of the investors what kind of margins that
13:39 normally a VFX studios work on? So as far as we are concerned we are determined to maintain our
13:47 part around 30% so that is what is our plans for the future as well. Okay Mr. Balakrishnan
13:55 this growth which is there you have enough projects in hand to continue to get the kind
14:02 of growth that Mr. Yogalakshmi spoke about? Yeah we do have projects in the line the horizon
14:09 maybe we look into the next year and we do see a lot of projects coming in line and that is
14:13 something that we would really be happy to collaborate as well because those projects
14:17 would be from our existing relationship that we already have so eventually we would also
14:22 collaborate on those projects and we've been really geared up and likewise we also have
14:26 an existing team work on some interesting projects at the moment as well so we see a lot of opportunity
14:31 coming up for us as a company and there as in you know the content is something that everyone
14:36 would like to consume at the moment right from now we can see even the kids will consume a lot
14:41 of content so that really helps and also brings up a greater responsibility in creating more
14:47 visually appealing content so that way we do see a lot of opportunity lined up for us.
14:52 So are you only focused on the overseas market or overseas projects or do you see a big scope
14:59 for Indian projects because Indian films are now also using a lot of VFX going forward we have big
15:05 budget movies coming in they're using VFX so are you looking at Indian projects as well?
15:11 Yeah certainly we are quite open for Indian projects as well because we do see a lot of
15:17 demand now for visual effects in Indian movies and the productions are also willing to spend
15:22 more towards creating more realistic visual effects in our Indian productions so that's
15:27 really encouraging and we do see there's a lot of potential as in the Indian market is growing
15:34 really if you look into the last two three years things are really looking good and we definitely
15:40 want to put our hands and want to make sure to use our global reputation that we have gained
15:45 over the years for you know to put ourselves and to try and collaborate with the Indian market that
15:50 could really you know be very challenging and complex for us to build that reputation going.
15:56 Give us a sense of the kind of you know clients that you have your top five clients of yours have
16:02 nearly 46 percent of the revenues coming in what kind of clients are these and how long you've been
16:07 working with them? If you look into our major clients they would be mainly major VFX studios
16:14 and also mainly the production houses that we work with and if you look into you know as in
16:19 they contribute to a majority of our revenue we've been working with them for more than like
16:25 six seven years and the relationship is ongoing with them and that's a comfort zone that we have
16:31 really developed between these relationships so we've been working with them for these are
16:36 the relationships that we have for over five six years minimum. Okay and normally a project takes
16:42 how long to complete? It really varies because some projects would go up to maybe you know
16:49 typically over just close to a year but there are a few other projects which also can run only for
16:54 mid to short term that is around two to three months time and there would be other few other
16:59 projects where it only runs up for a couple of weeks time so we always know get into different
17:03 types of projects and different types of teams working on other the various projects where you
17:09 know they can really go around and make sure that we meet each and every other client's demands.
17:16 You know while you mentioned the kind of growth rate that you expect going forward
17:21 I just wanted to understand the cash flow kind of how the cash flows come in and you can come in
17:28 miss Yogalakshmi here give me a sense of you know is there a project completion method that you use
17:34 for accounting cash flows or is it on completion or advance and completion means we're trying to
17:40 understand the industry much better so if you can give us some you know insights into how you
17:45 you know account for cash flows and revenues accounting. Yeah so if you're working for
17:52 production houses we usually get paid upfront around 30 to 50 percent will be paid upfront
17:58 and based upon the milestone completion we get paid and as and when we deliver the final shots
18:04 we'll be paid up as and when we release the invoice maybe in a week or so if you're working
18:09 for studios then it'll be like we will get turnover based input so we work turnover by turnover can be
18:17 from one turnover to a hundred or 150 turnover as well so based on the completion of the turnover
18:23 we send them the invoice and we get paid in 15 to 30 days of time. And you said turnover what do
18:27 you mean by turnover just to get a turnover of shots okay yeah because just to me I don't want
18:33 to confuse it with financials. Not that turnover it's turnover of shots maybe it will be around
18:39 20 to 50 shots or 100 shots per turnover that is how it is and if you're working for commercials
18:45 it will be like once we complete the commercials it will just be for a week or two weeks so as
18:50 and when we complete that or complete the commercials we get paid maybe in 15 to 30 days of time.
18:56 What I could see Mr. Balagishan that nearly 90 percent of your revenues come from subcontracting
19:01 are you also now looking at doing direct contracting from with some of the studios
19:06 and or is subcontracting the way to go forward and how do you expand it from here?
19:11 Yeah absolutely our plan is to get into more direct work and as you would have seen
19:16 we do already have a team in London and building on our team closely to the locations where the
19:22 productions really happen that is a mainstream in Hollywood as well as European productions so
19:28 and likewise that is our plan and we are also planning to build our creative leadership team
19:33 in LA as well so that would really amplify our you know chances of getting into more towards
19:39 production so our focus would be mainly towards working closely with production as in more chances
19:46 and the subcontract will always be there and that is again a major boost to our revenue so that we
19:52 will still maintain and also we'll focus on building our production direct production work
19:56 through these global teams. Give me a sense of what kind of projects you're working on or how
20:02 many projects you're working on how many movies or web series or you know because you're working
20:08 with Netflix as well you're working with Fox studios as well and you are working for other
20:12 major studios globally so I you may not be able to give me the name but at least the kind of work
20:17 that you're doing what kind of revenue you know projects worth revenue projects are these?
20:22 At least we would be working on 30 to 35 projects at a time on floor maybe it is with across Chennai
20:31 and Pune and if you take what the kind of projects that we would be working on would be like mainstream
20:37 Hollywood movies and there would be like 15 to 20 percent of commercials and 40 to 50 percentage of
20:43 mainstream movies and again like 30 percentage of TV episodics so it's a kind of blend between
20:51 commercials episodics and movies so that's how the work is distributed on floor and
20:56 likewise the projects as you mentioned we have listed few on our websites as well like the ones
21:03 which we can disclose and there are a few other projects that we've been working on now which we
21:08 couldn't be able to disclose at this stage so yeah but every project that we work on are really
21:14 are reputed well reputed projects and no mainstream projects that's all we've been working on.
21:20 I know I'm trying to push across and trying to get more information from you but that's my
21:28 work. My final question to you is basically you know you came on the Emerge platform
21:35 do you have plans to eventually move to the main board as well?
21:38 Yeah yes we would be happy to yeah. Is there a timeline that you have set yourself
21:45 to meet all the conditions so that you can move to the main board?
21:48 So we don't have a timeline but we do definitely have an idea to get into main
21:55 code at some point in time yeah that's something we would really be looking forward to.
21:59 Thank you very much today Mr. Balakrishnan and Ms. Yogalakshmi for joining us today on
22:04 BQ prime and congratulations once again for the kind of response that you got for your IPO.
22:09 Thank you very much. Thank you. It was a pleasure meeting you. Thank you.
22:13 Thank you.
22:21 [BLANK_AUDIO]
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