Multiplexes: Entertainment for real - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Multiplexes: Entertainment for real

Sep 25, 2001

Multiplexes, a new concept in movie exhibition is fast catching up in India. Multiplex embodies the luxurious amenities of the modern day theatre, multiple screen choices, state of the art technology, ergonomic seating, eye-catching architecture and top of the line additional recreation facilities like cafes, gyms, shopping malls and food courts. There are 13,000 movie theaters in India, the second largest in the Asia pacific region. However, that is insufficient to meet the entertainment needs of the country’s population who can afford watching movie atleast once in every three months. As against this China, which ranks first in terms of number of screens in the Asia Pacific region, has around 67,000 screens on last count.

High entertainments taxes in India have, till recently have adversely affected the economics of running a movie theatre and hence a major disincentive for expansion of theatre capacity in the country. The entertainment taxes in India range anywhere between 50-120% varying across different States. The prevailing rate of entertainment tax in Maharastra is 37.5% of the ticket revenue.

The state government of Gujarat, Rajasthan and Uttar Pradesh has passed a resolution exempting multiplexes, commissioned before FY02, from entertainment taxes for next 5-7 years. The Maharastra also recently announced complete waiver of entertainment tax for three years and partial waiver for another two years for new multiplexes.

Added to that there has been a relaxation in the import duties of film equipment in the last budget, which has also led to acceleration in multiplex projects coming up in the country. Last year itself around 40 multiplexes were built in India and more than 600 are in the pipeline. The new entertainment tax concession for multiplexes given by the Maharashtra government is expected to spur fresh investments worth Rs 5 bn in the sector over the next two years, adding an estimated 200 screens and an additional 50,000 cinema theatre seats. The concept of multiplexes is not only limited to metros, it is fast spreading to smaller towns and metros like Ghaziabad, Noida, Amritsar, Lucknow, Meerut and Agra where a number of projects have been announced.

The expansion of multiplexes is destined to drive box office spending in the Asia Pacific region in the next five years. Multiplexes are destined to become one-stop shops that promise entertainment. While cinema halls may have been the pivots around which the phenomenon of film watching has sprung up, multiplexes now offer fantasy on a scale surpassing the celluloid.

Equitymaster requests your view! Post a comment on "Multiplexes: Entertainment for real". Click here!


More Views on News

What Fuelled the Sudden Surge in PVR and Inox Shares Today (Views On News)

Sep 27, 2021

Shares of both multiplex chain operators surged almost 18% to hit their 52-week highs.

8 Penny Stocks with Exceptionally High Promoter Holding (Views On News)

Sep 25, 2021

While high promoter holding is a good thing, there can be rare cases where penny stock promoters use misleading information about the actual valuation.

Shareholder Activism Triggers a 30% Rally in Zee Entertainment Shares (Views On News)

Sep 14, 2021

Zee Entertainment shares zoom after top investors seek CEO and MD Punit Goenka's removal.

Here's Why Affle India Hit 5% Upper Circuit Today (Views On News)

Jul 2, 2021

In the past one year, the company's share price is up 202%. Can it go higher?

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

6 Penny Stocks that Rallied 1,000%+ in One Year (Views On News)

Dec 6, 2021

These penny stocks shed their penny status by surging 1,000% or more in the last one year.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 8, 2021 11:04 AM