Multiplex operator Carnival Cinema plans to scale up its presence in tier II and III cities and add 700 screens by March 2018 to reach a target of 1,000, a top company official has said. "Our emphasis is on setting up theaters in tier II and tier III markets. So we have a vision of 1,000 screens by March 2018 and 90 per cent of these screens are going to be in tier II markets, where the population is more than 3.5-4 lakh.
We have already signed 150 screens for this," Carnival Group Chairman Shrikant Bhasi said. Currently the company operates 324 screens across 88 cities, with tier I cities and neighbouring areas accounting for 221 screens.
Once the company reaches its target of 1,000 screens, the tier II cities and neighbouring areas would account for 700 screens. The investment on new screens is estimated to be around Rs 850 to 900 crore and the company is looking at states like Madhya Pradesh, Bihar, Jharkhand, Uttar Pradesh, Punjab, Rajasthan and North Eastern states for its expansion plans. Carnival which has largely followed the acquisition model to scale its business is now looking at the organic route to add screens.
"We are not that keen on doing inorganic anymore... The organic growth will be in the tier II markets only," he said. Carnival Group had acquired 254 screens of Big Cinemas from Anil Ambani-led Reliance Group for an estimated Rs 700 crore, 10 screens from HDIL's Broadway Cinema for about Rs 110 crore and 27 screens of Glitz Cinemas from Stargaze Entertainment for an estimated Rs 90 crore. Carnival Cinemas, which has a turnover of Rs 800 crore, might look at getting listed on the bourses after it reaches its target of 1000 screens, Bhasi said. "Up to 1000 screens we have structured the funding part. We will take a call on IPO in 1.5-2 years time. After 1,000 screens we will definitely go through the equity route than a debt route," he said.
Food and beverage currently contribute to 23 per cent of the revenues while advertising contributes to 10 per cent. Online ticket sales currently contributes to 25-28 per cent of the total sales but the company plans to increase its share to at least 60-70 per cent in the future. The company is also planning to take the chain globally and is looking at some of the South East Asian countries and Middle East for the same.