HDIL scripts new act — entertainment

MUMBAI: Adding a completely different dimension to its business, Mumbai-based real estate developer Housing Development & Infrastructure Ltd (HDIL) is foraying into entertainment.

The BSE-listed company has floated a wholly-owned subsidiary, HDIL Entertainment Ltd, to undertake various activities in this regard.

Sarang (Sunny) Wadhawan, MD, HDIL told DNA Money the new company would start with the film exhibition business. “Currently, there are three multiplexes being developed. These are part of our shopping-entertainment projects in Kandivali, Vasai and Bhandup,” said Wadhawan.

The company has already put in place the necessary manpower for the film exhibition business.

Going forward, it plans to get into distribution of entertainment content on the lines of existing players like Cinemax, INOX and Adlabs, under the Broadway Entertainment brand. Between the current three projects, the multiplex chain would constitute 13 screens and a total seating capacity of 3,800 people.

“Entertainment is a very lucrative and serious business for the company and integrates very well with the kind of developments we are involved in,” said Wadhawan. Investment plans were being worked out and a final call on numbers would be taken soon, he added.

Industry experts said the new business was a logical extension given that HDIL is already in the process of developing major shopping and entertainment destinations across the country, though primarily in the western region.

It also fitted the overall business plan as the promoters, the Wadhawan Group, had interest in food and grocery retailing in addition to operating food and beverage business under the name Dish Hospitality.

Wadhawan said, “The idea is to have a complete control on the entertainment activities within our developments and run it as a profit centre. And as rightly pointed out, the food and beverage part will be taken care of by the group company besides exploring retailing related activities within the destinations being developed.”

While it will be too early to point out whether the entertainment subsidiary will hit the capital markets similar to what Kanakia Group did with its Cinemax chain and what DLF Ltd might be looking at pursuing with its DT Cinemas, Broadway hitting the capital markets in future cannot be ruled out.

The Indian film industry is amongst the largest in the world in terms of the number of films released (over 1,000) and the number of patrons visiting theatres (over 3.7 billion tickets sold) per year.

The cinema exhibition space is expected to record Rs 10,200 crore in revenues in the next 3 years, of which multiplexes would have a share of over 10%. According to industry reports, India is among the world’s largest media consuming and content creating markets.

“In fact, according to an SSKI report, Indian entertainment and media industry is just 0.7% ($10bn) of the global $1.4 trillion industry. “Sweeping changes in distribution, convergence and integration of models, IEM is expected to grow to $21 billion by 2010,” the report said.

Growing at a compounded average growth rate of 26% between 2006 and 2010, the sector is expected to generate revenue of about Rs 16,200 crore (or Rs 162 billion) by 2010.

The country is set to witness rapid ramp-up of multiplexes. Players like PVR, Adlabs, Shringar, Inox, Fun Republic, Cinemax, etc have lined up plans to set up 150-200 screens each in the next three years.

And with the advent of multiplexes and digitisation of cinema, the wheel of fortune is also turning for the film industry.

More than 400 screens have mushroomed all over India in a period of five years with approximately 1,500 more lined up by 2010. As a result, box office collections have shot up substantially, given 100% reporting of revenues and that patrons of multiplexes are willing to shell out 4-6 times the current ticket price.

Also, multiplexes create market for niche content, which till now was being sacrificed to accommodate popular mass movies.