You are here: Home » Companies » News
Business Standard

Carnival eyes number two spot by end of FY15

While Ajay Bijli's PVR leads the packs with 454 screens, Inox is number two with 361 screens

Urvi Malvania  |  Mumbai 

The Kochi-based Carnival Cinemas’ acquisition of Reliance Mediaworks’ business has catapulted it to number three position among players in the country.

Ajay Bijli’s leads the packs with 454 screens, is number two with 361 screens. The addition of 250 screens from Big Cinemas, the brand under Reliance Mediaworks, has taken Carnival past Mexican chain (193 screens) with 300 screens.

The deal does not include the real estate and the IMAX property at Wadala. These are valuated at Rs 200 crore, and will be monetised separately by Carnival aims to have 1,000 screens in the country by 2017.

The chain, which at the beginning of the year had 40 screens, plans to have over 400 screens by next March. It has opted for the inorganic growth path until now, but also has plans to start around 75 screens on its own in the coming months.

“Apart from this, we are on our way to acquiring two regional multiplex chains in north India, which will add 85 screens to our portfolio,” says Shrikant Bhasi, chairman of the Carnival Group.

The term sheets for the deal have been signed, and the deals are expected to go through in a week or two. Bhasi refrained from naming the two chains Carnival was planning to acquire, citing regulatory restrictions. The two acquisitions will take Carnival’s screen count to 385. The organic expansion will focus on smaller cities and towns, typically those with populations between 100,000 and 1,000,000.

The deal size was Rs 700 crore and the two regional acquisition deals will cost Carnival another Rs 150 crore. In July, the group acquired the business of HDIL (Broadway Cinemas; 10 screens) for Rs 110 crore. Carnival’s total investment in inorganic expansion thus far has been Rs 960 crore.

While part of this investment has been infused by the promoters, another part is through debt. The group is also bringing on board a private equity fund based in Singapore to raise 15-18 per cent of the total investment.

“We are carrying out due diligence, and thus I cannot reveal the name of the fund. Once the deal is done, we shall have the final financial structure and the ownership structure of the group will be decided,” says Bhasi.

He adds the group will also be looking at setting up a movie distribution arm. This will help Carnival carve a niche for itself as a movie distributor-cum-exhibitor at a national level for regional, and imported content.

“We shall be contracting around 500 single screens for this purpose. With 400 (and counting) screens of our own and 500 single screens, we aim to have a network of 900-1,000 screens nationwide for our distribution business. This will help the smaller film-makers distribute their movies with ease, even without the backing of big studios,” he explains.

Carnival has dabbled in movie production down south. The group entered the movie business five years ago as financiers for films. Finding projects expensive, Carnival shifted its focus to south India where it financed, produced and distributed Malayalam movies.

“While doing business in the south, we realised the biggest lacunae is in the exhibition space. There are just not enough screens for movie-goers in India. So we started with the south. Now we aim to have an all-India footprint,” says Bhasi.

The acquisition, apart from increasing its screen count, has given Carnival a presence in west and north India, two of the strongest regions for Bollywood films. The group’s footprint now spans Kochi, Kollam, Ernakulam, Thalayolaparambu, Dindigul, Ghaziabad, Mumbai (Vasai, Borivali, Bhandup), Kolkata, Kozhikode, Thiruvananthapuram, Mumbai and Hyderabad.

It is not just the screen count that matters, feels Bhasi. “We want to be the holistic entertainment destination for audiences. We are developing properties in which movies are but one part of the experience. In Borivali (a suburb of Mumbai) we have a property where movie-goers can have a five-course meal. We want to start properties where families can come, enjoy their time with various activities like eating or going to the spa, and enjoy good cinema,” he says.

First Published: Wed, December 17 2014. 00:48 IST
RECOMMENDED FOR YOU