Update (Feb 9, 2009): Reliance ADAG has put a spanner in the works: According to Business Standard, Anil Arjun, CEO of Reliance MediaWorks has written to Fame India, asking why promoter Shravan Shroff sold his family’s majority 44.28 percent share to Inox at Rs. 44/share, much lower than the Rs. 80/share that Reliance had offered. The company is expected to approach the Indian regulator, SEBI. One should expect an inquiry around shareholder interest, since Fame India is a public listed company, and the interests of minority shareholders need to be protected. More here.

Feb 4, 2009: After PVR announced intent to buy DLF’s DT Cinemas for Rs. 202 million plus stake, another Indian theatre chain INOX Leisure has acquired 43.28 percent stake in Fame Cinemas or Shringar Cinemas Ltd for Rs.664.8 million. Inox had earlier announced its intent to acquire Fame and has now completed the buy using funds from its promoter Gujarat Fluorochemicals Limited, taken as a shareholder loan. The company will follow this with an open offer to acquire an additional 20% stake in Fame for cash.

This is Inox’s second acquisition – in 2006, Inox took over Calcutta Cine Pvt. Ltd. (CCPL) a Bengal Ambuja company that ran the ’89 Cinemas’ chain of multiplexes. It added 9 multiplexes in West Bengal and Assam to its chain then. Inox Leisure had 30 cineplexes in 21 cities. Now, Inox adds Fame’s 95 screens to its 109 screens, and overtakes PVR Cinemas to become the 2nd largest theatrical chain in India with 204 screens.

Competition & Consolidation

Its competitors include:

Reliance ADA Group’s BIG Cinemas: This is the clear market leader, with 500 screens of which 246 are in India. It recorded 9 million footfalls in the December 2009 quarter. It has screens in India, US, Malaysia and Netherlands.

PVR Cinemas: PVR stands for Priya Village Roadshow! It has a total of 134 screens and it is strong in Delhi, Mumbai and Bangalore markets. It is also opening up multiple screens in Madhya Pradesh, Punjab and Uttar Pradesh. In 2007, it had set a goal of having 250 screens by 2010.

Pyramid Saimira Theatre Ltd (PSTL) had 190 screens as of June 2009, but the company has not been doing well financially and may have shut down more screens. There is no update on the number of screens operational in the company’s financials for the December quarter.

Cinemax India by the Kanakia Group: It is a listed entity and has 28 theatres with 90 screens in all but primarily in Mumbai, Maharashtra and Gujarat. It has been ramping up screens and adding multiplexes regularly over the past six months. According to a company presentation, it plans to launch 30 screens by this month in Baroda, Ahmedabad, Kolkata, Cochin, Raipur, Bangalore, Hyderabad and Pune.

Spice Cinemas by MCorp Global: At Noida.

Essel Group’s Fun Cinemas: Has 70 screens in 19 cities including 11 ‘Talkie Town‘ screens. Has an aggressive plan to acquire 550 screens and bring 1500 screens into its fold by next year. It also plans to digitise 1000 screens by 2011.

The retail theatre industry has reached a consolidation stage and conglomerates might be eyeing smaller chains like Wave Cinemas, which has 25 screens in Delhi and Uttar Pradesh and City Gold in Mumbai or other local screens to acquire, upgrade and build their network. Theatre is, in India, the highest contributing medium for a movie and still lies far ahead of online, CD/DVD sales and TV, so investment in growing their cineplex chain is a no-brainer for media and entertainment firms.

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