Inox set to invest Rs 200 cr to add 60 cinema screens
Multiplex operator Inox Leisure plans to invest Rs 200 crore to add up to 60 cinema screens across the country this fiscal. "In addition to 1 property, 5 screens and 617 seats (already opened), we expect to open another 12 properties, 54 screens and 10,786 seats this financial year," Deepak Asher, Inox Leisure Director and Group Head, told analysts during a conference call.
"The total capex that we intend to incur on this pipeline at least for 2016-17 is roughly Rs 200 crore, which would be funded essentially by 60:40 debt equity. So, the debt required will be about Rs 120 crore and equity about Rs 80 crore." Asher said post these additions, Inox Leisure will operate 479 screens through 120 properties across India by 2016-17. Asked if the company is also looking at acquisitions to grow its presence, he said: "I think there is still room for further consolidation. If we look at how the multiplex industry is structured, there are about 2,100 screens in the country today, of which about 1,500 belong to the four large chains, which are PVR, Inox, Carnival and Cinepolis, which means there are about 600-700 screens that belong to others." This translates into "30 per cent of screen population that belong to what we call the regional chains, chains which do not have a national presence, but are present in smaller market...". According to Asher, these are potential inorganic growth opportunities and the company is looking for deals at the right price which will lead to inorganic growth potential, going forward.
The Indian multiplex space has been in consolidation mode as lack of space for opening new cinema halls, low footfalls in a number of malls and high rentals have made it difficult for organic growth. Earlier this year, PVR acquired real estate major DLF's DT Cinemas for Rs 433 crore.
In January last year, Mexican multiplex chain operator Cinepolis fully acquired Essel Group's Fun Cinemas for an undisclosed sum. Media and entertainment firm Network18 exited from multiplex business by divesting stake in Stargaze Entertainment to Carnival Films for an undisclosed sum.