Home / Financial News / Carnival eyes number two spot by end of FY15

Carnival eyes number two spot by end of FY15

Kochi-based Carnival Cinemas’ acquisition of Reliance Mediaworks’ (RMW)’s movie exhibition business has catapulted its position to number three among national multiplex players in the country.

While Ajay Bijli’s PVR leads the packs with 454 screens, Inox is number two with 361 screens. The addition 250 screens from Big Cinemas, the movie exhibition brand under RMW, has allowed Carnival surpass Mexican multiplex chain Cinepolis (193 screens) with 300 screens.
 
The deal does not include the real estate under Big Cinemas and the IMAX property at Wadala. These are valuated at Rs 200 crore, and will be monetized separately by RMW. Carnival aims to have 1000 screens in the country by 2017.
 
The multiplex chain, which at the beginning of the year has 40 screens, plans to have 400+ screens by the end of the current fiscal. It has opted for the inorganic growth path until now, but also has plans to start around 75 more screens on its own in the coming months.

“Apart from this, we are on our way to acquire two regional multiplex chains in North India, which will add another 85 screens to our portfolio,” says Shrikant Bhasi, chairman, 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 is to acquire citing regulatory restrictions.

The two acquisitions will take Carnival’s screens count to 385 screens, taking it to second spot within a year. The organic expansion will focus on smaller cities and towns, typically those with population between 100,000 and 1,000,000.
 
The Big Cinemas deal size was Rs 700 crore and the two regional acquisition deals will cost Carnival another Rs 150 crore. Earlier this year in July, the group acquired the movie exhibition business under 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 raised through infusion of funds by promoters, part of it has been done by raising debt. The group is also bringing on board a private equity fund based in Singapore to rise 15 to 18% of the total investment.
 
“We are carrying out due diligence in the deal and thus I canot reveal the name of the fund. Once the deal is done, we shall have the final financial structure and ownership structure of the group will be decided,” says Bhasi.
 
He adds that 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, Bollywood and imported content. “We shall b 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 to 1000 screens nationwide for our distribution business. This will help the smaller film-makers eistribute their movies with ease, even with9out the backing of big studios,” he explains.
 
Carnival has dabbled in movie production down South. The group entered the movie business five years back as financers for Bollywood films. Finding Bollywood projects too expensive, Carnival shifted its focus to South India where it financed, produced and distributed Malayalam movies.

“While doing business in the south, we realized that the biggest lacunae is in the exhibition space. There are just not enough screens for the movie-goers in India. So we started with the south. Now we aim to have an all India footprint,” says Bhasi.
 
The Big Cinemas acquisition, apart from increasing its screen count significantly, has also given Carnival a strong entry into west and north India, two of the strongest regions for Bollywood films.

The group’s footprint now spans across Cochin, Kollam, Ernakulam,Thalayolaparambu, Dindigul, Ghaziabad, Mumbai(Vasai, Borivali, Bhandup), Kolkatta, Calicut, Trivandrum, Mumbai and Hyderabad.

Its not just the screen count that matters feels Bhasi. “We want to be the holistic entertainment destination for audienes. 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.

Leave a Reply

x

Check Also

Debate on Article 370 marked by posturing, says RSS

The Rashtriya Swayamsevak Sangh (RSS) is recalibrating its discourse on its demand ...

Street cautiously positive on JSPL post coal mine

Jindal Steel and Power (JSPL), which witnessed its lowest point in the ...