From Leh to Kota, multiplexes roll into smalltown India

Big multiplexes such asPVR Inox and Cinepolis as well as smaller companies such as Miraj Entertainment Ltd, Mukta A2 Cinemas, and MovieMax Cinemas have set their eyes on tier 2 and 3 markets such as Patna, Shillong, Jaipur, Kota, and Leh-Ladakh to build low-cost cinemas with local developers.

The second part of the strategy involves focusing on markets in South India, including cities like Hyderabad, Bengaluru, Huballi, Kochi, and Cuddalore that boast a robust theatre-going culture, according to industry experts.

These expansion plans come amid a lacklustre first half of the year for the Hindi film industry, the country’s biggest, which is pinning hopes on a stronger second half with a wave of sequels and stories rooted in mythology and folk traditions, as Mint reported on .

However, real estate experts said the overall cinema industry’s expansion remains fairly conservative, with smaller properties and fewer screens planned as alternative entertainment options such as OTT (video-streaming platforms) have become increasingly popular, especially post covid.

“The South is a strategic focus area for us,” said Kunal Sawhney, chief operating officer, MovieMax Cinemas. “The region’s rich cinema culture, coupled with the popularity of films across multiple languages, allows for greater programming flexibility and wider appeal. This, in turn, leads to better (seat) occupancies.”

MovieMax is targeting several towns across Andhra Pradesh, Telangana, Tamil Nadu, Kerala and Karnataka as part of its expansion, which includes expanding to tier 2 and 3 cities, particularly those with populations of 500,000 and above, Sawhney added.

“In these markets, average ticket price will be lower than metros, in alignment with local affordability. (But) we typically partner with strong regional developers who have a deep understanding of local market potential and are committed to delivering a high-quality mall experience tailored to the needs of the community,” Sawhney said.

Pricing caps, regulations, and other challenges

Rahul Puri, managing director, Mukta Arts and Mukta A2 Cinemas, agreed these smaller markets hold strong potential, as ticket prices in these regions are designed to reflect local dynamics, making cinema-going more accessible to wider audiences. Mukta too is collaborating with regional developers to develop multiplexes in smaller cities.

Referring to tier 2 and 3 markets as commercially promising yet under-screened, Bhuvanesh Mendiratta, managing director, Miraj Entertainment, said ticket prices in smaller cities are calibrated to local affordability, averaging ₹180-200, significantly lower than in metro cities.

“We partner with local developers, including mall owners and standalone theatre operators, often converting single screens into three to four screen multiplexes,” said Mendiratta, whose company is venturing into cities such as Sitapur, Alwar, Ittawa, and Sambalpur.

Miraj Entertainment plans to add 40-50 screens in 2025-26, of which 25-30% will be in South India, including cities such as Chennai, Kozhikode, Visakhapatnam, Kurnool, and Tumkur.

To be sure, southern markets pose certain unique challenges for multiplexes, according to some experts.

Anuj Kejriwal, CEO and managing director, ANAROCK Retail, a property consultancy, said cinemas in South India faced strict state-imposed caps on ticket prices, a less well-developed mall culture in some cities, as well as the prevalence of single-screen theatres.

Complex regulations and competition from OTT platforms can reduce overall profitability for cinemas and prevent faster adoption of luxury formats in the southern markets, industry experts said.

In several small cities in South India, multiplexes will need to modify their business models according to the local market dynamics and requirements to ensure sustainable growth, they added.

That said, some of these hurdles and evolving dynamics aren’t specific to South India.

“Competition from OTT and general lack of new content in cinemas has meant that companies are now quick to give up on properties that aren’t doing well,” said Abhishek Sharma, director, retail, at realty consultancy Knight Frank. “Further, from the 10-plus screens planned earlier, theatre chains aren’t looking at more than eight screens as the best possible scenario now.”