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Tag: Rasesh Kanakia

  • Cineline aims to be organised pan-India player: Rasesh Kanakia

    Cineline aims to be organised pan-India player: Rasesh Kanakia

    Kanakia Group’s Cineline India has recently rebranded itself to MovieMax and re-entered the film exhibition industry with the launch of nine properties at prime locations across Maharashtra, including Sion, Andheri, Goregaon, Kandivali, Mira Road in Mumbai; Eternity Mall and Wonder Mall in Thane; The Zone (Nashik), and Eternity Mall (Nagpur).

    Cineline had been in the film exhibition business since 1997. As they have now forayed back into the film exhibition business, they have a redefined objective.

    In a conversation with IndianTelevision.com Kanakia Group chairman Rasesh Kanakia speaks about the rebranding and its objective, growth, the path ahead and more.

    Edited excerpts:

    On rebranding as Moviemax

    Cineline has rebranded itself to MovieMax with a vision to transform the multiplex landscape as the market shifts from single screens to multiplexes. They will be looking at monetising these opportunities to expand across India while also reestablishing a foothold in Maharashtra.

    Explaining how Moviemax will add value to the business of Cineline, Kanakia says, “MovieMax will be the perfect launchpad for us as we add value to our windmill business and our retail estate business. Moviemax will offer a superior viewing experience, and premium and 3D screenings.”
     
    “We have about 75 screens pan India with over 16500 seats,” he highlights.
     
    “This gives us a clear opportunity and space to leverage our expertise in providing a quality experience to our audiences. We additionally plan to keep acquiring more screens in the coming months and intend to build a strong consumer-centric brand in this industry,” he tells.

    Aiming to be an organised pan India player

    Cineline has been in the industry for quite a long time. Talking about the future plans, he explains, “MovieMax expansion plans are based on the emerging opportunity for the cinema exhibition business’s growth potential.”  

    “With many single screens giving way to multiple screens, we want to be an organised pan India player,” he expresses.

    “As a business, we also want to be asset-light and will monetise these assets to reduce debt. We expect about Rs 350 to 450 crore through our monetisation efforts, which will further boost our plans to acquire additional screens in the future,” adds Kanakia.

    Expecting to witness a growth in D2C and B2C brands

    He feels that advertisers have known the value of branding that cinema houses provide. “We have leveraged this aspect to enable brands to channel their campaign message to the target audience effectively,” he adds.

    Highlighting the advertiser’s interest in cinema advertising, he says, “from various sectors such as smartphones, audio peripherals, healthcare, and fitness brands are engaging with the audiences through in-cinema advertising. Even hygiene and jewellery brands are creating cross-functional promotional campaigns to build brand awareness among moviegoers.”

    “Overall, we are expecting to witness a growth in D2C and B2C brands investing in our business,” notes Kanakia.

    Future of film exhibition and gaming businesses

    Kanakia thinks both film exhibition and gaming businesses are set to revive and revolutionise the entertainment sector.

    “Post the pandemic, the relaxation in restrictions has boosted the popularity of theatres and gaming zones in the shopping malls and entertainment hubs. As most of the sectors are witnessing signs of resurgence, we are expecting massive growth across both these segments in the coming years,” he asserts.

    On Cineline gaming business

    “Our gaming business is growing exponentially and we are optimistic about positive growth as the lockdown restrictions have been lifted. Giggles – The Gaming Zone has been an outcome of our vision to provide wholesome gaming and family entertainment. Giggles offer indoor and outdoor gaming experiences along with a premium choice of food and beverages. We want to expand this business from our four outlets to many more in some of our future multiplexes at different locations in India,” he shares.  

    Talking about the gaming industry further, he says, “the gaming industry is at the cusp of a turnaround. With the boom of the OTT and unlimited access to online content, gaming as an entertainment platform also has evolved. At Giggles, we have a blend of indoor and outdoor games. We are investing in digital technology to revolutionise the gaming zones and provide a rich experience for the entire family.”

    “We are infusing a premium touch to our gaming zones with all age groups being able to participate in fun-filled games and activities,” he highlights.  

    In preparations to prevent another Covid wave

    “Cinema business was the worst hit by the pandemic. To prevent another Covid wave, Cineline businesses are keeping a close eye on the regulations and protocols that are being disseminated to the public. In regards to precautionary efforts, all our theatres and gaming zones maintain a high standard of hygiene and round-the-clock sanitisation efforts are in place. Moreover, the health and safety of our patrons are of prime importance and we are ensuring that our preparations to combat Covid-19 are in line with the government’s directives,” he concludes.

     

  • Cineline India re-enters film exhibition business starting Q1 FY23

    Cineline India re-enters film exhibition business starting Q1 FY23

    Mumbai: Cineline India Ltd, a part of MMRDA region-based real estate player Kanakia Group, is re-entering the film exhibition business and will launch the same under a new brand in Q1 FY23, announced the company on Thursday.

    The company was present in the film exhibition business through Cinemax brand since 1997. In 2012, it sold the multiplex business along with Cinemax Brand to PVR Ltd under a non-compete clause which has already ended. Further, the company had leased out nine properties with 23 screens to PVR under leave and license agreements on which multiplex operations were run by PVR.

     

    “In light of expiry of the license period by 31 March 2022, coupled with weakening industry dynamics for the unorganised and single-screen film exhibition players, there is a tremendous opportunity for organised players to increase their foothold in this segment. Therefore, Cineline with a strong history of operating the film exhibition business has decided to re-enter and create a strong consumer-oriented brand in this segment,” the official statement read.

    Post 31 March 2022, Cineline India will have access to its own properties and thus will be able to kick start its film exhibition operations in Q1 FY23 through 9 properties with 23 screens across Mumbai, Thane, Nashik, and Nagpur having an aggregate seating capacity of more than 6,000  seats.

    The company will grow the film exhibition business in due course of time by acquiring theater properties pan India on a lease basis. It believes that post-relaxation of lockdown restrictions and patrons returning to theaters, there is a huge opportunity in this space with a strong lineup of Bollywood, Hollywood, and regional content in place till the next year.

    Chairman Rasesh Kanakia said, “We are delighted to re-enter the film exhibition business in India. With various leave and license agreements between us and PVR expiring on 31 March 2022, the company will launch a new brand for the film exhibition business in Q1 FY23. We plan to create a strong consumer-oriented brand in this segment.”

    “Considering the fact that as the exhibition business inches closer to a return to normality, post-Covid, we see a strong pipeline of movies coming up in the next year, and patrons’ excitement to return to theaters will be quite high. We are seeing a big wave of opportunity and have big plans for growth in this business,” he added.

  • PVR to buy 69.29% Cinemax promoter stake for Rs 3.95 bn; plex biz in consolidation phase

    PVR to buy 69.29% Cinemax promoter stake for Rs 3.95 bn; plex biz in consolidation phase

    MUMBAI: Ajay Bijli-promoted PVR Ltd. has agreed to buy the entire 69.27 per cent promoter stake in competing multiplex operator Cinemax India for Rs 3.95 billion, which will make it the biggest multiplex operator in the country.

    The deal values Cinemax at Rs 5.7 billion, making it an expensive purchase. Since Cinemax has 138 screens, PVR has paid a higher premium to fortify its presence in Western India, including Mumbai.

    For exiting the business, the Kanakias are being paid at Rs 203.65 per share. Cinemax‘s stock jumped 4.99 per cent on Thursday to close at a new high of Rs 184.25.

    PVR is making the acquisition through Cine Hospitality, its wholly-owned subsidiary.

    Of the 69.29 per cent promoters stake in Cinemax India, Himanshi and Rasesh Kanakia hold 33.46 per cent each while Rupal and Hiral Kanakia own 1.17 per cent each. The remaining 0.03 per cent stake is held by Kanakia Gruhnirman and Kanakia Finance and Investments.

    PVR Promoter Ajay Bijli said, “In order to achieve market leadership in Indian Exhibition business, PVR has been on a rapid expansion mode both through organic as well as inorganic routes. Today, with the proposed acquisition of Cinemax, we hope to create the largest movie exhibition chain in India."

    Cinemax Promoter Rasesh Kanakia said, “We believe that the Exhibition business benefits from consolidation as large scale strengthens competitive advantage as well as significantly enhances operational efficiencies. This transaction enables realization of such benefits and would create significant value for all the shareholders of Cinemax. The deal will enable us to ensure greater focus on our real estate and hospitality businesses.”

    PVR with the backing of private equity investors will also make an open offer to public shareholders of Cinemax, which would eventually culminate in the delisting of the company’s shares.

    As part of the open offer, Cine Hospitality will acquire up to 7.2 million fully paid-up equity shares of face value of Rs 5 each representing 26 per cent of the fully diluted voting equity share capital of Cinemax at a price of Rs 203.65 per share.

    PVR has also got the board approval to issue 10.62 million fully paid equity shares on a preferential basis to Ajay Bijli, Sanjeev Kumar, L Capital, Multiples Private Equity Fund I Limited, and Multiples Private Equity Fund at Rs 245 per share to raise Rs 2.6 billion.

    Under the preferential issue of equity shares in PVR Limited, Multiples will invest an amount of approximately Rs 1.53 billion, L Capital would invest approximately Rs 823 million and Promoters would invest approximately Rs 250 million into PVR.

    Post the above dilution, both Multiples Private Equity and L Capital would own approximately 15.8 per cent stake each in the company and the Promoters will hold 32 per cent stake in the Company.

    The owners of Cinemax had demerged their multiplex business from the core real estate business, which was housed in Cinemax Property. Earlier this year, international private equity fund L Capital Eco had agreed to invest a total of Rs 1.07 billion in PVR.

    In the last fiscal, Cinemax had posted a profit of Rs 77.9 million on revenues of Rs 2.7 billion. While, PVR‘s net profit stood at Rs 281.1 million on revenues of Rs 4.7 billion.

    Expensive deal but PVR gets location advantage

    The deal values the per screen price at Rs 45 million, more than double the cost if PVR were to have build on its own. PVR has valued Cinemax, which has a net debt of Rs 850 million, at Rs 5.7 billion.

    "While PVR becomes the largest multiplex operator, the premium paid for the acquisition is definitely too high. If PVR had decided to build it itself, the capex requirement would have been Rs 20 million per screen. But PVR gets location advantage and makes up for its weakness in western India," says an analyst at a broking firm.

    PVR currently has 46 operational properties, with 213 screens and a seating capacity of 50,655 seats. Cinemax has 39 operational properties, with 138 screens and a seating capacity of 33,535 seats.

    Theis acquisition would create the largest movie exhibition chain in India with a combined strength of 351 screens at 85 locations with a total capacity of 84,190 seats.

    This will also give PVR a leadership position in 10 key markets across the country. It will also help PVR to strengthen its position in Mumbai where Cinemax owns 45 screens and where average ticket prices are higher.

    The acquisition will also help PVR scale up its multiplex business. "For multiplex operators in India, the biggest challenge is to scale up through the organic route. And there are few good multiplexes available to buy. So the premium paid is justifiable," says a media analyst.

    Consolidation in the multiplex business

    The multiplex industry is entering a consolidation phase. Earlier, Inox Leisure Ltd had bought out the promoter‘s stake of 43.3 per cent in Fame India Ltd for Rs 664.8 million. Later this June, Fame was merged with Inox to become India’s largest multiplex chain with 257 screens.

    "There will be pressure on other multiplexes to acquire or sell. The business requires huge amount of cash to expand," says a media analyst.

  • Cinemax sets IPO price band at Rs 135-155

    Cinemax sets IPO price band at Rs 135-155

    MUMBAI: Cinemax India Ltd, which runs a chain of exhibition theatres, has set a price band of Rs 135 to Rs 155 for its forthcoming 8.9 million-share initial public offer (IPO).

    The issue, which constitutes 31.86 per cent of the fully diluted share capital of the company, will enable Cinemax to raise Rs 1.38 billion at the top end of its price band.
    “We will be using the IPO proceeds to widen our presence from 33 screens in 10 properties to 141 screens at 42 locations by FY09. We will have a pan India presence, though our focus will be in strengthening our position in the northern and western regions of the country. We currently have a presence in Maharashtra,” Cinemax chairman Rasesh Kanakia said at a press conference.

    The company owns 8 of its properties while two are leased. “This is a major differentiator from the other theatre operators. But moving forward we would look at the rental model to ramp up the numbers. Our locations are at high catchment areas in affluent and middle class neighbourhoods,” he said. Inox is the other theatre exhibitor which has a predominantly ownership model.

    Cinemax plans to set up a eight-screen multiplex in Chandigarh and have seven gaming zones at its new locations. The company earns 76 per cent of its revenues from ticket sales and five per cent from advertisements, Kanakia said, adding that the company enjoyed leadership position in Mumbai with a 33 per cent market share.

    For the first half of the current fiscal, Cinemax posted a revenue of Rs 347.32 million and a net profit of Rs 21.39 million. In the previous year, it reported a turnover of Rs 438.6 million while its net profit stood at Rs 75.05 million. The company had 2.73 million patrons in the first half of this fiscal as against 3.67 million in FY06.

    Pyramid Saimira Theatre Ltd, which is also into the cinema exhibition business, recently raised Rs 844.4 million through an IPO and ended trading at the BSE on Wednesday at Rs 189.95.