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Theatre chain operator PVR Cinemas is eyeing the acquisition route to fuel its growth plans. The company is in the process of exploring suitable options for inorganic growth, said Mr Sanjeev Kumar Bijli, joint managing director, PVR Ltd.
PVR, with 162 screens across 37 multiplexes and a net turnover of about Rs 350 crore, is one the largest multiplex chains, after Reliance Mediaworks Ltd owned Big Cinemas (260 screens in 102 multiplexes and revenues of Rs 479 crore).
“We have so far focused on organic growth. Now, we are also looking at inorganic growth. We are in an exploratory stage and, as and when we get a right opportunity, we will take note of it,” Mr Bijli told newspersons.
Incidentally, theatre chain INOX Leisure Ltd, a subsidiary of Gujarat Fluorochemicals Ltd, had acquired the entire 43 per cent stake of rival multiplex chain Fame India, which owns the chain of Fame Multiplexes, in February 2010.
INOX had previously (in 2006) acquired Calcutta Cine Private Ltd, which owns the chain 89 Cinemas. This acquisition (of CCPL – a Bengal Ambuja company) kick-started the process of consolidation in the multiplex industry. INOX has 155 screens across the country.
According to Mr P. V. S. Sreekanth, research analyst, Media and FMCG, Angel Broking, consolidation is an option that the multiplex industry will explore once they start expanding in the Tier II and III towns. “Once companies have a sizeable presence in the smaller towns they will look at consolidation,” he told Business Line .
Organic Growth
PVR Cinemas plans to add 70 more screens at an estimated investment of Rs 120 crore during the next fiscal, Mr Bijli said. “We are planning expansions in the Tier II and III towns. Though the ticket prices are lower in these towns our capex is also low; so, getting returns on investment is not an issue,” he pointed out.
PVR set up its first multiplex in the eastern region at Avani Riverside Mall in Howrah, near Kolkata on Thursday. The company plans to set up one more multiplex in the city in another six-to-eight months. This apart, it also plans to add two more multiplexes in Ranchi and Dhanbad, in the next 18 months.
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