MUMBAI: Subhash Ghai-promoted Mukta Arts has decided to enter the film exhibition business, a move that will complete its presence across the value chain as it strives to increase its revenues.

The film production and distribution company is planning to invest Rs 500 million towards the multiplex business over a 12-month period.

The multiplexes will operate under the brand name of Mukta Cinemas. The first four plexes will be located in Baroda, Ahmedabad, Bhopal and Vishakhapatnam.

“We are currently investing Rs 200 million in the multiplex business. We plan to pump in Rs 500 million within a year,” Mukta Arts executive director Parvez Farooqui tells Indiantelevision.com.

Mukta Arts will enter into a revenue-share arrangement with the mall owners, a model that will limit its funding requirement in a capital intensive sector.

“This will be the business model we will be following. We may take up some properties on rental basis but that is not our priority,” says Farooqui.

So when will the first multiplex be operational? “Our Baroda plex is almost ready and we are waiting for the licence. But with the cricket World Cup and the Indian Premier League (IPL) round the corner, we are deciding whether it will be better to launch in the first quarter of next fiscal. There will not be big movie releases during the cricket season. It is always better to launch a multiplex with a big movie,” says Farooqui.

Mukta Movies Distributors, the distribution unit of the company, already controls programming of 160 theatres across India which include multiplexes of Big Cinemas (All India excluding Tami Nadu), Inox, Fame, Fun, DT Cinemas, Wave, SRS Cinemas in North India and many others including a number of single screen theatres.

Will Mukta Arts hive off the film exhibition business and raise capital to fund its expansion?

“We will take a call after one year. If there is a requirement for higher capital, we may decide to raise funds. One of the routes could be by hiving off the film exhibition business and then capitalising it. But it is too early to take a call on this,” says Farooqui.

Mukta Arts has firmed up three big budget movies to be directed by Ghai, Priyadarshan and Abbas-Mastan.

“The budget has not been finalised as it will depend upon the star cast. But each will be upwards of Rs 250 million. The two movies, by Ghai and Priyadarshan, will release in FY’12. The Abbas-Mastan film could spill over to FY’13,” says Farooqui.