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Carnival Cinemas plans Rs 500-cr investment in Madhya Pradesh

After its latest acquisition of Stargaze Entertainment from Network18 Media, Carnival has now broken into the big league of cinema business

Shrikant Bhasi

Shrikant Bhasi

Reghu Balakrishnan Mumbai
Angamaly, a Tier-III town in Kerala, is known for its alcohol consumption. The liquor outlet that is among the top contributors to the Rs 8,800-crore revenue of Kerala State Beverages Corporation. Besides, Angamaly has to its credit the setting up of the first multiplex theatre in Kerala.

Carnival Cinemas, the multiplex business born in this town, has now broken into the big league of cinema theatres in India, threatening the likes of PVR and INOX in the span of one year.

Carnival started with three screens in 2010 and is closing in on INOX as the second largest multiplex chain through serial acquisitions.

After its latest acquisition of Stargaze Entertainment from Network18 Media, the Shrikant Bhasi-owned Carnival now owns 330 screens, close to the 361 screens of INOX. Carnival has also 75 ready-to-operate screens that will be launched in a month.

Stargaze operates multiplexes in various cities under the brand name Glitz Cinemas.

The buyout gave Carnival a presence in cities like Ajmer, Raipur, Ranchi, BIlaspur, Dehradun, Jodhpur and Muzaffarnagar.

The PVR Group owns India's largest multiplex chain with 454 screens.

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"Stargaze is in the process of setting up screens at various malls across the country. Once these are operational, we will add 28-30 screens," Shrikant Bhasi, chairman of the Carnival Group, said. Carnival is also in discussions to buy two multiplex chains in north and south India. Once the deals materialise, it will have added 80 screens.

Last month, Carnival acquired Anil Ambani's Big Cinemas, which runs 252 screens, for Rs 700 crore. In January 2014, Carnival added 30 screens with its first acquisition of HDIL Broadway for Rs 110 crore.

The funding for the Big Cinemas buy was provided partly by a Singapore-based private equity fund that will own about 21 of the business. Besides private equity, agri-trading company Advantage Overseas has also funded Bhasi's acquisitions.

Carnival is looking at organic growth in states where buyout targets are few. "We don not want to play a numbers game. We are implementing innovative models by setting up screens, food courts as well as community centres in various north Indian states," Bhasi added.

Carnival will invest Rs 500 crore for setting up about 200 screens in Madhya Pradesh. "We are exploring both lease-outs as well as franchises in towns like Harda, Mandsaur, Rewa and Vidisha," Bhasi added.

Madhya Pradesh has 70 multiplex screens, shared among PVR, Fun Cinemas, Carnival and Big Cinemas. "Families travel to Bhopal during the weekend to watch movies, shop and eat out. Once we set up multiplexes with screens and food courts, we hope to attract a good crowd," Bhasi, born in Angamaly and brought up in Bhopal, said.

"The multiplex industry is moving towards three or four pan-India players with a few regional players.This should enable the national players to drive better bargains," said Ajay Shah, partner for transaction advisory services at EY.

Last year, INOX had acquired Satyam Cineplexes, while PVR is reportedly in talks to buy the Chennai-based Satyam Cinemas. Last month, Mexican major Cinepolis bought Fun Cinemas.

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First Published: Jan 14 2015 | 12:47 AM IST

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