After a seven-year delay, Wonderla Holidays is all set to commence work on its new amusement park in Chennai.
The Bengaluru-headquartered amusement park and resort company has signed an MoU with the Tamil Nadu government to invest ₹500 crore in the Chennai project in the first edition of Global Investors Meet (GIM) held during the AIADMK regime in September 2015. Wonderla acquired 60 acres on the Old Mahabalipuram Road (OMR) in Chennai in 2018.
However, the project could not take off further due to issues over the local body tax (LBT) levied by the Tamil Nadu government.
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Currently, the state government levies 10 per cent LBT over and above the 18 per cent GST, which has deterred many amusement park players from entering the market.
In its Q4 earnings call, Arun K Chittilappilly, MD, Wonderla Holidays said, “We had asked for a 10-year waiver of the local body tax and they (government) have accepted that request. So, we don’t have that problem anymore.”
He added that construction of the Chennai project will be completed in the next two years. “Two years from now we hope to open this park to the public,” he added.
On the tax-waiver, Chittilappilly said as per the government order, there is a two-year construction period following which there will be 10-year waiver of the local body tax.
Wonderla currently has three amusement parks in Bengaluru, Hyderabad, and Kochi. The company commenced work on its fourth park in Odisha in March, which is expected to complete in the next two years.
“We are doing two projects simultaneously now, Chennai and Odisha, so that will take care of our capex for the next two years,” he said.
Wonderla has spent almost ₹100 crore on land in Chennai. However, Chittilappilly said the company will follow an asset-light approach going forward by leasing land from the state governments, just like it did in Odisha. “That is how we are able to bring down the capex by ₹350-400 crores to less than ₹150 crores,” he added.
He said Punjab and Madhya Pradesh have been bullish for a Wonderla project to come in their state. “We are also talking to Goa and maybe Gujarat also, we will initiate some discussions,” he added.
Meanwhile, shares of Wonderla Holidays on Friday touched a 52-week high of ₹498.40 apiece on NSE before closing at ₹490.50 per share.