Film exhibitor PVR has earmarked Rs160 crore this fiscal to increase number of screens and open new entertainment centres this year.
Sanjeev Bijli, joint managing director, PVR Ltd, told DNA
Money, “Around Rs120 crore will be invested for adding 82 screens while another Rs40 crore will go in launching four PVR bluO centres. Funding will be done through a mix of internal accruals and debt as well as money recently raised from private equity firm L Capital Eco,” said Bijli. The company had added 50 screens last year.
Earlier on Wednesday, L Capital Eco signed a deal to invest Rs108 crore in PVR’s cinema exhibition and in-mall entertainment businesses. Under the agreement, L Capital will take a 10% fully diluted stake in PVR for Rs57.7 crore in PVR Ltd, launch a joint venture with PVR bluO Entertainment Ltd and invest Rs50.1 crore in various in-mall entertainment, gaming, food and leisure formats.
The PVR management said that with mall developments finally getting completed and delivered during this fiscal the targeted new screen additions will be easily met.
The company has already opened 13 screens so far and the balance 70 screens will open in the next 6-7 months. The new facilities will open in metros and larger cities like Pune (2), Bangalore (3), one each in Kochi, Chandigarh, Nagpur among others. The company also plans to add 70 screens each in fiscals 2014 and 2015, doubling the overall screen count in three years.
Bijli said while inflation in the last few years has led to 10% cost escalations, the company has done certain value engineering to ensure the incremental costs do not impact operating margins. “Our costs per screen currently is Rs1.2 to 1.5 crore for a standard facility, while a top-end screen would cost Rs1.8 to 2 crore,” he said.
With two centres and 50 bowling lanes already operational under the PVR bluO brand, Bijili said new centres would come up in cities like Bangalore, Pune, Ludhiana and Chandigarh in the current fiscal. “Being on a larger scale with over 24 lanes, these are not plain bowling centres. Being reasonably priced at Rs150 per game, the approach works well for the business as patrons do not have to queue up for their turn and the churn is much quicker,”
The bluO centres are typically spread across 30,000 square feet on an average including the F&B area. The per-lane cost (for bowling centres) ranges Rs50 – 80 lakh depending on the location and number of lanes. “Smaller the centre, higher the cost,” said Bijli.
To diversify its entertainment offerings, the company is evaluating a host of out-of-the-home entertainment options, including in the food and beverages area.
These in-mall entertainment concepts are expected to incorporate some international formats.
“These are currently in the evaluation stage and we are expecting to introduce them before the end of this fiscal,” said Bijli.