Cinemax’s Kanakia takes another shot at the multiplex business
After his 2012 deal to sell out Cinemax to PVR, Rasesh Kanakia, a well-known face in India's real estate sector, now plans to have 75 screens in FY23.
- Dec 28, 2021,
- Updated Dec 28, 2021 5:15 PM IST
Rasesh Kanakia was one of the earliest entrants into the multiplex business. He created a robust brand called Cinemax with 138 screens spread across Ahmedabad, Panipat, Nagpur, Hyderabad, Kolkata, Mumbai, Thane, Bangalore and Pune. In 2012, he sold the entire operation to PVR for Rs 395 crore. In one stroke, it made PVR the largest multiplex player edging past Inox and Big Cinemas. Since then, Big Cinemas, at that point owned by Anil Ambani, too has been bought over by the Carnival Group.
The deal between Cinemax and PVR had a non-compete clause for a period of ten years. It also had a lease agreement for 23 screens. That period is set to conclude over the next few months and Kanakia is all set to get back to the business.
In a chat with Business Today, he says the plan is to add around 50 new screens during FY23, taking the total number to close to 75. Kanakia, a familiar name in the real estate business, has the existing screens in Mumbai and greater Mumbai, Nashik and Nagpur. Under a new brand called Cineline, he plans to spread that. "Apart from western India, we want to move to the north and south," explains Kanakia, Chairman, Cineline India, a part of the Kanakia group.
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Why Kanakia is choosing to venture into the business at the most difficult time seems hard to comprehend. "The big players are badly hit and have no money. Our conversations with mall owners clearly show we can strike good deals," he thinks. If you think investing a lot when a business is challenging, Kanakia is a good example of that. "This is the only time when we can get highly discounted rates.
Besides, developers are willing to absorb a part of the fit-out costs (or what is incurred in doing up the interiors) and that is a huge plus," he says. It is estimated that 70-80 per cent of the existing screens are in good shape and very little needs to be spent.
According to him, the prior experience of having run a multiplex chain will come in handy apart from the industry being ripe for consolidation. "A lot of players are stretched and we see an opportunity for a new player. Cinema viewing will always remain and can never be replaced by OTT. OTT's competition is television."
In terms of financing the foray, Kanakia says his internal accruals stand at Rs 60 crore and the plan is to raise more money. "We will dilute some of our assets, including a shopping mall in Nagpur, a hotel in Goa and a commercial space in Mumbai," he points out. How the industry dynamics change in an uncertain environment and a new player promises to be intriguing.
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Rasesh Kanakia was one of the earliest entrants into the multiplex business. He created a robust brand called Cinemax with 138 screens spread across Ahmedabad, Panipat, Nagpur, Hyderabad, Kolkata, Mumbai, Thane, Bangalore and Pune. In 2012, he sold the entire operation to PVR for Rs 395 crore. In one stroke, it made PVR the largest multiplex player edging past Inox and Big Cinemas. Since then, Big Cinemas, at that point owned by Anil Ambani, too has been bought over by the Carnival Group.
The deal between Cinemax and PVR had a non-compete clause for a period of ten years. It also had a lease agreement for 23 screens. That period is set to conclude over the next few months and Kanakia is all set to get back to the business.
In a chat with Business Today, he says the plan is to add around 50 new screens during FY23, taking the total number to close to 75. Kanakia, a familiar name in the real estate business, has the existing screens in Mumbai and greater Mumbai, Nashik and Nagpur. Under a new brand called Cineline, he plans to spread that. "Apart from western India, we want to move to the north and south," explains Kanakia, Chairman, Cineline India, a part of the Kanakia group.
Also Read: SEBI clears amendments to various regulations, tightens rules for IPO
Why Kanakia is choosing to venture into the business at the most difficult time seems hard to comprehend. "The big players are badly hit and have no money. Our conversations with mall owners clearly show we can strike good deals," he thinks. If you think investing a lot when a business is challenging, Kanakia is a good example of that. "This is the only time when we can get highly discounted rates.
Besides, developers are willing to absorb a part of the fit-out costs (or what is incurred in doing up the interiors) and that is a huge plus," he says. It is estimated that 70-80 per cent of the existing screens are in good shape and very little needs to be spent.
According to him, the prior experience of having run a multiplex chain will come in handy apart from the industry being ripe for consolidation. "A lot of players are stretched and we see an opportunity for a new player. Cinema viewing will always remain and can never be replaced by OTT. OTT's competition is television."
In terms of financing the foray, Kanakia says his internal accruals stand at Rs 60 crore and the plan is to raise more money. "We will dilute some of our assets, including a shopping mall in Nagpur, a hotel in Goa and a commercial space in Mumbai," he points out. How the industry dynamics change in an uncertain environment and a new player promises to be intriguing.
Also Read: Booster dose: No medical certificate required for people above 60 yrs