From giving Rajinikanth's biggest hit to losing ₹600 cr a year: How Tamil cinema's biggest production house went broke

Even as it once produced the biggest films in Tamil cinema, Lyca Productions is set to shut shop just 11 years after it began producing films.

In 2014, when the Lyca Group ventured into film production and distribution, it marked a pivotal moment for Tamil cinema. A big business house with deep pockets was entering a small territory. Their promise was to shake things up. And that they did. Over the next 10 years, Lyca consistently gave some of the biggest and most expensive Tamil films ever made, including a certain Rajinikanth's biggest hit. It seemed to be on the rise forever until it came crashing down in the wake of the OTT boom, the very boom Lyca helped create. (

Rajinikanth's Vettaiyan was among the final few disappointments for Lyca Productions.

How Lyca became Tamil cinema's biggest production house

Lyca Production's journey began with AR Murugadoss' Vijay-starrer Kaththi in 2014. The film was a smash hit, allowing Lyca to expand further. Over the next few years, they produced critically acclaimed sleeper hits like Vada Chennai and Ippadai Vellum. But it was in 2018 that they struck gold with Shankar's 2.0. The sequel to Enthiran was the biggest hit of Rajinikanth's career and remains the highest-grossing Tamil film of all-time with a worldwide gross of over ₹700 crore. Thus began a spate of 'big' films from Lyca, including Darbar and Ponniyin Selvan I and II, among others. The production house ventured into Bollywood, too, when it produced Akshay Kumar's Ram Setu.

Vijay and Samantha Ruth Prabhu's Kaththi was Lyca's first film.

In 10 years, Lyca produced 34 movies and distributed several others. These include the highest-grossing Tamil film ever, the biggest Tamil franchise, and the three most expensive Tamil films made. The prolificity, combined with the scale, made Lyca surpass veterans in the field, like Sun Pictures and Raaj Kamal International.

Lyca Production's downfall

Cracks began to appear in 2023 as films produced by Lyca began to fail at the box office. In one year, starting late 2023, Lyca produced five back-to-back big flops - Chandramukhi 2, Lal Salaam, Indian 2, Vettaiyan, and Vidaamuyarchi. These films starred some of the biggest names like Rajinikanth, Kamal Haasan, and Ajith Kumar, and featured top directors like Shankar. The collective landing cost of these films was close to ₹1100 crore. But at the box office, they collectively netted just ₹500 crore. Putting the digital rights aside, this gave Lyca losses of over ₹600 crore at the box office.

Shankar's Kamal Haasan-starrer Indian 2 was one of the biggest box office bombs of 2024.

How streaming affected Lyca

Industry insiders say that the decrease in streaming rights revenues from platforms hit Lyca hard. It had brokered a deal to distribute Mohanlal's L2: Empuraan, assuming it would get additional revenue from a big streaming rights figure. But that never materialised. In the end, Lyca pulled out of being a partner in Empuraan just two weeks before the film was to be released. If reports are to be believed, the cash crunch at Lyca Productions is so severe that the production house is set to shut shop after producing its final two movies this year.