Rave plans Rs 30cr expansion

Encouraged by the success of its first commissioned multiplex-cum-mall, Rave-3, Kanpur-based Rave Entertainment (Pvt) Ltd is investing Rs 30 crore in new projects.

Rave-3, when established five years ago, became a sort of tourist spot, being the first of its kind in UP. It has clocked an occupancy rate of 61 per cent, being the highest in the country today. It has undergone massive expansion and the company is planning to become the largest screen-owner in the country.

Rave, a company promoted as equal partners by Mahendra Mohan Gupta of the Jagran group and Vikram Kothari of Rotomac Writing Instruments, in their personal capacities, is in the process of establishing 24 more screens, in addition to the existing three, in North India.

The firm had established two self-owned restaurants in Rave-3. As these too have clicked, wherever the company establishes a multiplex, it will set up these two restaurants--Antarangani, serving vegetarian Indian cuisine, and Chimni, serving Chinese delicacies. Their number is expected to go up from one each to about 15 each in the next two years.

"We have been successful both in our multiplex-cum-mall venture, as well as in the restaurant business," said Sunil Bansal, CEO of the company.

Except for Rave-3 in Kanpur, which is self-owned, and Rave@Moti, again in Kanpur, a joint venture between Motilal Padampat Udyog and Rave Entertainment, the rest on current reckoning are on lease. "There is nothing exceptional about it," Bansal said, adding "except Inox, the rest are following this model, including Adlabs and PVR". The reason is buying land can make project cost exorbitant. Thus Rave@Moti will cost, inclusive of land, Rs 90 crore, with land costing about Rs 40 crore.

The strategy is to go to those places first where Dainik Jagran, the largest-selling Hindi daily, has a footprint. Bansal said there was a lot of synergy between newspaper and multiplex. Jagran does help in logistics and in advertising. More importantly, it takes care of any other problem which this industry has to face.

Thus, besides the existing three screens, three more will come up at the second Kanpur multiplex-cum-mall, Rave@Moti.

Others are Noida (five screens), with Unitech, and Agra (three screens with TDI). In Meerut it has tied up with Majestic Properties, and in Jalandhar, Sonepat and Panipat, with MGF.

"Now we are planning to go to Gorakhpur and Varanasi," he said.

The strategy is to go for the leasing model, where the cost per screen comes to about Rs 3 crore. The leasing rates are fixed and the period may vary from nine years, as in Meerut, to about 40 years, in Agra.