News: India's Cinemax in expansion mode

(BS 19/05/2006) Mumbai - The Mumbai-based Kanakia group, promoter of the Cinemax chain of multiplexes, is currently in an expansion mode.

It is looking at a total investment of Rs 275 crore spanning three years to acquire land across the country to build malls, multiplexes and hotels.

According to informed sources, the company is considering raising about Rs 200 crore through initial public offering or a strategic foreign investor.

Currently, Cinemax has a total of 33 screens in Maharashtra, and the company is looking at a pan-India presence across 21 locations with 77 screens. Cinemax has already signed memorandum of understandings with property owners at various locations in the country for a total of 20,070 seats.

In addition, the company will be acquiring land for the purpose of building malls and hotels that it will develop in strategic locations.

When contacted Rakesh Kanakia, chairman, Cinemax Cinemas, refused to comment on the company's plans for fund raising.

The Cinemax group has already developed the Eternity Mall in Thane, Mumbai, which was done on a sale model and entailed development of over two lakh sq ft.

That apart, Cinemax is currently constructing a mall at Variety Square , Nagpur, with over one lakh sq ft development area. The lease tie-ups are already in place for 40 per cent of the area.

The group has also acquired land at Lucknow with a development area of over five lakh sq ft with a joint venture partner for constructing a complex of mall, multiplex and a hotel.

Kanakia said Cinemax was targeting development of one mall on an average every year by acquiring land at strategic locations.

"The exhibition and the mall model go hand in hand. Hence, for Cinemax the strategy is to acquire land for the purpose of developing a mall, of which 20 per cent would be dedicated for the Cinemax Multiplex. The mall could either be leased out or sold out depending on the situation," he added.