The motion pictures business in India has certain unique aspects which pose challenges in front of those whose fortunes are linked with the industry. The shelf life of a movie is short whereas the cost of producing and marketing it along with the financial risks associated with its success are very high. The concept of hedging risks is in a very nascent state in the Indian Film Industry. The business, done in a traditional way, exposes producers, distributors and financers to undue risks. In this paper we have looked at the Indian film industry (typically the Mumbai based Hindi film industry), and the risks and challenges that the industry faces. We have analyzed various risks faced by the industry like the risk of a flop movie, financing risks, political risks, and competition from regional film industry and also competition from Hollywood movies which are gaining popularity in India to name a few. A number of these risks, it seems, looms large due to lack of proper visibility of right information due to existing information bottlenecks. We have categorized these risks into certain broad categories and looked at various ways to mitigate them. We have also analyzed the applicability of various financial instruments like options to hedge the risk of low business by a movie and looked at a novel idea of securitization of box office returns and float bonds with those returns as underlying to generate short term financing.