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India’s largest multiplex chain, PVR Cinemas, is planning to invest close to Rs 100 crore in the next six months to open 50 new movie screens, especially in tier II cities.
This apart, PVR is also expecting to consolidate the merger process with its recent acquisition, Cinemax India, by the end of this year.
The company recently bought 138 screens from Cinemax India, a Mumbai-based company, for Rs 395 crore. Post-acquisition, PVR owns nearly 398 screens across 37 cities.
“We will be starting close to 50 new screens in 2013-14, which will include opening new screens in tier II and III cities like Pathankot, Mysore, Bhopal and Pune. Each of the screens would require capex plan of nearly Rs 2 crore,” said Gautam Dutta, Chief Operating Officer, PVR Cinemas.
This financial year, PVR cinemas is expecting a turnover of Rs 1,400 crore, of which nearly Rs 440 crore would come from Cinemax properties.
In November 2012, PVR had said its wholly-owned subsidiary Cine Hospitality would acquire a 69.27% stake owned by the promoter group of Cinemax.
Over the next few months, PVR cinemas would also invest a substantial amount of capex in giving a facelift to the 138 properties of Cinemax, said Dutta.
“Currently, we are in the process to consolidate our position. We had a major inorganic growth after the acquisition of Cinemax. There is a lot of work that needs to be done for people and process integration. Refusrbishing Cinemax properties also need lot of investments after in-depth research,” said Dutta.
However, the company was also open to further acquisition after the consolidation process is over.
“We had a few discussions (on new acquisitions), and we are open to further acquisition,” said Dutta.
Also, while PVR would seek to operate only on a multiplex model, it was open to buying single screen movie halls at strategic locations to increase its footprints. Notably, while PVR dominates the movie market in the west, south and north, its presence in the east is relatively sparse.
“In the current market scenario, single screen is not a preferred way to expand. Yet, we are looking at standalone screen in strategic locations, but the discussions are in a very nascent stage,” said Dutta.
Of the 50 new screens which PVR is planning to open this year, about 28 will come up in tier II and III cities.
