You are here: Home » Companies » News
Business Standard

Carnival Cinemas to add 150 screens in 2016

The multiplex chain will invest close to Rs 200 cr on organic growth in tier-2 and -3 cities

Urvi Malvania  |  Mumbai 

Two mega commercial realty deals boost property market

In 2016, Carnival Cinemas intends to scale up its presence in tier-2 and tier- 3 territories, adding close to 150 screens organically.

For this, Shrikant Bhasi, chairman, Carnival Group estimates requirement of funds to the tune of Rs 200-225 crore. Setting up a screen in a tier-2 or -3 city/town would cost on an average Rs 1.5 crore. “We will fund this organic expansion on our own. For expansion beyond these screens, we plan to raise around Rs 350 crore through PEs and VCs,” says Bhasi. He adds that of this Rs 350 crore, Carnival has already secured some amount of funding from a PE with whom the company has signed the term sheet recently. He however refrained from naming the investor and the amount raised citing regulatory constraints.

The organic expansion is part of the company’s ‘Vision 1000’ under which it aims to achieve a 1,000-screen presence across the nation by the end of calendar 2017. It is already at the 350-screen mark, and with another 150 screens, will reach 500 screens by the end of the current calendar. In the next calendar, it hopes to add another 100 screens, organically and/or inorganically.

The remaining 400 odd screens, Carnival intends to add by ‘charting’ single screen movie houses in metros and non-metros. “Charting refers to management partnerships or deals with single screen owners. Depending on the owner and his comfort, we will chart out the deals. In some cases, we may charge a retainer while in others, we may take a share of the revenues/profit. We already have a few screens under this model,” explains Bhasi.

Carnival started its cinema exhibition journey with around 50 screens in the south decided to expand nationally a couple of years back. As a result, the first focus was to grow the chain’s footprint in the non-metro regions. After a point however, the company realised in order to scale up quickly, it will have to adopt the inorganic route.

In a year, Carnival added almost 300 screens to its portfolio by acquiring assets from three big players — HDIL, Reliance ADAG and Network's Glitz Cinemas — two regional and one national. The total value of these deals amounted to Rs 900 crore. In case of the Big Cinemas brand, Carnival took over some of Reliance’s debt in the business and paid the rest. In order to facilitate the inorganic growth, Carnival raised funds from a PE based in Singapore, offloading 9% stake in the exhibition business for a commitment of $30 million.

Apart from cinema exhibition, the company is also slowly stepping up its movie production and distribution business and its events and IP vertical. In case of production, Carnival focuses on films around the budget of Rs 20 crore and plans five odd films a year.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, February 11 2016. 19:01 IST