Cinepolis plans to add 60 screens, weighs rebranding Fun assets

Mumbai: Cinepolis India Pvt. Ltd, the Indian movie exhibition arm of Mexican chain Cinepolis, is planning to add 60 screens to take its total count to over 250 screens by the end of 2015, said a company executive.

“With the acquisition of Fun Cinemas assets, we now have 193 screens and... we will end 2015 with more than 250 screens,” said Javier Sotomayor, managing director at Cinepolis India.

Cinepolis plans to own 400 screens by 2017 and its acquisition of Zee group-owned Fun Cinemas in December was completed with the same goal in mind. Cinepolis, which started negotiations with Fun Cinemas in October and closed the deal in two months, is assessing which assets of Fun Cinemas it wants to rebrand under its portfolio. This was Cinepolis’s first acquisition in India since entering the country in June 2009.

“For sure some of the assets will be rebranded into Cinepolis but would it be the entire portfolio which needs restructuring is what we are evaluating,” Sotomayor said. “We believe that by April we will have clarity on which properties we decide to rebrand and I foresee by December we should finish the entire process.

Although Sotomayor did not disclose how much Cinepolis had paid to acquire the assets, two people involved in the process said the deal was valued at Rs.470 crore.

This acquisition has given Cinepolis a strong base in the northern region, mainly the national capital region market. Before the acquisition, Cinepolis had 17 properties spread across Bengaluru, Pune, Mumbai, Jaipur, Bhopal, Surat, Mangalore, Hubli, Ahmedabad, Amritsar, Hyderabad, Ludhiana, Patna, Vadodara, Vijaywada and Pune.

With the acquisition of Fun Cinemas, it has added new markets such as Ambala, Bhatinda, Chandigarh, Coimbatore, Delhi, Dibrugarh, Ghaziabad, Gwalior, Khanna, Kota, Lucknow, Panipat and Ranchi.

“Our default strategy is to grow organically and we have a strong pipeline of screen openings, but having said that, we will be and we are looking at inorganic growth opportunities. However we are not obsessed with the number of screens and we do not want to take any premature decision to reach a certain number of screens,” Sotomayor added.

According to Cinepolis’s website, it is the fifth largest multiplex operator in the world, with 2,000 screens in six countries.

“Serious multiplex players will only get bigger from here and apart from giving them bargaining power with distributors and studios in terms of movies and screens they want to allocate, it helps them to raise prices,” said Jehil Thakkar, head of media and entertainment at KPMG India.

Listed multiplex firms like PVR Ltd and Inox Leisure Ltd have been steadily increasing their food and beverages (F&B) and average ticket prices over the last six months, according to a Mint report on 9 December.

The year 2014 has been the most active year for multiplex firms in India in terms of consolidation, with four multiplex businesses acquired by larger ones for a total of over Rs.1,410 crore.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.