The Income Tax Department conducted searches at Namit Malhotra's residence and Prime Focus offices in Mumbai, reportedly investigating foreign financial transactions. The searches, linked to earlier probes involving film industry figures, caused an 8% drop in Prime Focus shares. This comes ahead of the Diwali 2026 release of 'Ramayana: Rise of a Legend,' starring Ranbir Kapoor and Sai Pallavi.
From October 7 to the morning of October 8, the Income Tax Department conducted search operations at the Mumbai offices and residence of Namit Malhotra, the producer of Ramayana: Rise of a Legend. Inital reports state the searches are linked to an investigation into foreign financial transactions, however, the Income Tax Department has yet issued a statement confirming the reason for the investigation.
Prime Focus shares fell by approximately eight percent after news of the searches was reported. The searches come approximately a month before Ramayana: Rise of a Legend is scheduled to release in theatres in the Diwali 2026 release window.
The IT Department also searched the Prime Focus studio in Film City, Malhotra's residence and the premises of his chartered accountant. It is reported that these searches were conducted following inputs received during 12 searches carried out last week at premises linked to actor Rakul Preet Singh, her father-in-law and veteran producer Vashu Bhagnani, and production house Panorama Studios.
As first reported by India Today, the Mumbai IT division executed the searches in connection with alleged financial irregularities and foreign capital transfers tied to film ventures. Officials were yet to outline the exact scope of the transactions or disclose any specific figures under scrutiny.
While speculation has arisen regarding the connection between the two investigations, no official confirmation has been made.
Following the news of the searches, Prime Focus shares fell around 8 percent, driving selling pressure. Prime Focus, headed by Namit Malhotra, is a global media and entertainment business that works on visual effects, production, post-production and animation.
Ramayana: Rise of a Legend, directed by Nitesh Tiwari, stars Ranbir Kapoor as Lord Rama, Sai Pallavi as Sita, Yash as Ravana and Sunny Deol as Lord Hanuman, with a large supporting ensemble that includes Ravi Dubey as Lakshman, Arun Govil as King Dashrath, Lara Dutta as Kaikeyi, Rakul Preet Singh as Shurpanakha, alongside Vivek Oberoi, Kunal Kapoor, Shobana, Saurabh Sachdeva and Faisal Malik.
Its soundtrack is composed by A.R. Rahman and Hans Zimmer in their first collaboration in an Indian film. T-Series acquired the music rights to both parts of the film for a reported refundable advance of ₹75 crore.