New Delhi: India’s largest listed real estate developer, DLF Ltd, plans to spin off its multiplex unit, DT Cinemas, into a separate company that will raise money through an initial public offering (IPO) in the next two years after adding more screens.
DT Cinemas, fully owned by DLF, plans to invest Rs1,500 crore over two years to take its total number of screens to 500 in 100 multiplexes from seven in two currently. It plans to expand into cities such as Mumbai, Hyderabad, Bangalore, Chennai, Pune and Goa.
“We are seriously thinking of raising funds for expanding DT Cinemas in the next two years,” Kajal Aijaz, chief executive officer of DT Cinemas, said. “Our idea is to increase the financial valuation of the company (in the first place) by building more multiplexes and then take the IPO process from there,” she added, but declined to say what percentage of its stake DLF plans to dilute and how much the company plans to raise.
India, with its well-known domestic movie-making industry, Bollywood, is among the top movie-going nations. Last year, the country’s movie makers produced more than 1,000 films. It has more than 12,000 stand-alone cinema halls. Of late, it has also seen a growing number of organized multiplex operators, some of which, including PVR Ltd, are listed on the stock exchanges.
Over the past decade, cinemas have transformed from disjointed no-frills single movie halls into multiplexes. Revenue at cinemas is expected to swell to Rs10,200 crore in the next three years from Rs6,750 crore, according to a 2006 report by audit and consulting firm PricewaterhouseCoopers.
DLF plans to develop more than 130 malls over two years, with DT Cinemas in most of them. It plans to add 40 screens in the current fiscal. It is also in talks with leading international multiplex chains for a strategic tie-up.
“We are looking at entering into a joint venture with an international multiplex chain. It makes sense for us to have an international partner,” Aijaz said. DT Cinemas is also looking at acquiring domestic multiplex chains to grow its business faster. “Acquiring a multiplex chain is the best way to grow fast. We are talking to some chains,” she said.
The company will also soon launch a new format multiplex called DT Premier, which will be a premium multiplex theatre. The company is developing two such multiplexes in South Delhi.
“These will be five-star multiplexes with all the facilities of a five-star hotel,” Aijaz said.