Economic Times: December, 2016
Mumbai: The latest entrant in the Indian multiplex business, Carnival Cinemas, has devised an unusual, low capex strategy to expand its footprint across the tier II and III cities and hinterland.
The company, which has become the third largest cinema chain in India on the back of multiple acquisitions, most notably Anil Ambani-owned Big Cinemas, is now partnering state governments and real estate developers to come up with entertainment zones.
Carnival has signed a memorandum of understanding (MoU) with the Odisha government, wherein the company will get 1-1.5 acres of land in each of the districts to build these zones with two-three screen multiplexes, food courts and some retail outfits.
“We will be building 150 screens in Odisha under this partnership with the state government. This is our capex light institutional programme, wherein we plan to partner with states and get into joint ventures with investors or real estate developers to build these zones,” Shrikant Bhasi, chairman of the Carnival Group, told ET.
In August this year, Carnival had entered into an agreement with the Jharkhand government for setting up minimum 75 theatres-cum-recreation zones in 18 out of 24 districts.
It has now signed a similar deal with Odisha to build these centres across all the 30 centres. “We are also in talks with Madhya Pradesh and Rajasthan state governments to expand footprint there,” Bhasi added.
As per Bhasi, the company will be looking at upto three partners per state for the development of these zones. “We are approaching the multiplex game differently. We are very clear that we want to play in the tier II and III cities where people are deprived of these and are hungry for entertainment.
We will keep ticket prices low so that more people can come. Our estimate is that these zones will get over 2,000 footfalls daily,” he added.
Bhasi claims that Carnival has a blueprint for over 5,250 screens ready and even as inorganic growth phase is over, there is organic expansion and institutional expansion. At present, Carnival is operating 365 screens, while 300 more signed and under construction.
Bhasi says the company will be opening 20-30 new screens every month going forward. Carnival has secured a long term loan from Yes Bank, which Bhasi claims is enough for the company’s 1,000 screens milestone, but for its expansion beyond 1,000 screens, the company has already initiated talks.