MUMBAI: Cinemax India Ltd, which runs a chain of exhibition theatres, has set a price band of Rs 135 to Rs 155 for its forthcoming 8.9 million-share initial public offer (IPO).

The issue, which constitutes 31.86 per cent of the fully diluted share capital of the company, will enable Cinemax to raise Rs 1.38 billion at the top end of its price band.
"We will be using the IPO proceeds to widen our presence from 33 screens in 10 properties to 141 screens at 42 locations by FY09. We will have a pan India presence, though our focus will be in strengthening our position in the northern and western regions of the country. We currently have a presence in Maharashtra," Cinemax chairman Rasesh Kanakia said at a press conference.

The company owns 8 of its properties while two are leased. "This is a major differentiator from the other theatre operators. But moving forward we would look at the rental model to ramp up the numbers. Our locations are at high catchment areas in affluent and middle class neighbourhoods," he said. Inox is the other theatre exhibitor which has a predominantly ownership model.

Cinemax plans to set up a eight-screen multiplex in Chandigarh and have seven gaming zones at its new locations. The company earns 76 per cent of its revenues from ticket sales and five per cent from advertisements, Kanakia said, adding that the company enjoyed leadership position in Mumbai with a 33 per cent market share.

For the first half of the current fiscal, Cinemax posted a revenue of Rs 347.32 million and a net profit of Rs 21.39 million. In the previous year, it reported a turnover of Rs 438.6 million while its net profit stood at Rs 75.05 million. The company had 2.73 million patrons in the first half of this fiscal as against 3.67 million in FY06.

Pyramid Saimira Theatre Ltd, which is also into the cinema exhibition business, recently raised Rs 844.4 million through an IPO and ended trading at the BSE on Wednesday at Rs 189.95.