Multiplex operator Satyam Cineplexes, which started its operations in the 1980s in Delhi, has established itself as an important player in the northern region. The company now plans to make a strong presence in South India. Deven Chachra, MD, Satyam Cineplexes, takes us through the company’s growth plans and expectations from the rapidly evolving market.
The film exhibition industry has close to 1,000 screens across India, with a potential to grow to 5,000 over the next 10 years. The exhibition space is the most evolved component in the whole segment. Players in this segment are now looking at a large number of screens per site.
Competition in the market is growing by the day. Does Satyam Cineplexes feel the heat due to the presence of players such as PVR, Cinepolis and Inox?
No doubt, some markets are over-subscribed. But, by and large, most operators are concentrating on certain territories and trying to be the first movers in tier II and III towns.
You had set a target to open 100 screens across India by 2011-end. Will you be able to achieve it? Which markets are you targeting?
We currently have 20 screens and expect to have 32 screens by the end of March and close to 50 by the end of 2011.
We are targeting both North and South India, with a major thrust on the southern region. We will have 40 per cent of our screens in South by the end of 2012.
Satyam Cineplexes recently raised Rs.50 crore through private equity (PE) funding. Would that be sufficient for your expansion plans?
Yes, for the first round this amount is enough. We are raising more funds for expansion in 2012 onwards.
What kind of rental tie-ups do you have with malls?
Rentals vary from property to property – some are minimum guarantee rentals or revenue sharing, whichever is higher. Besides, we have pure rental and pure revenue sharing models with some malls.
What was your turnover in FY’10? What are your expectations for the current fiscal?
In FY’10, our turnover was Rs.55 crore and we should close this fiscal with a turnover of Rs.67 crore.
Do you plan to take the acquisition route to strengthen your position in the market?
We are open to the idea of inorganic growth and acquisitions are key to our future. We will look at this space quite aggressively to see if any opportunities fit our overall growth plan.