Pyramid Saimira Theatre Ltd Plans Rs 250 Cr Film Fund. The Company is cutting down its expenditure heavily during the slowdown....This is expected to have significant effect on the its results in the following quarters.

Pyramid Saimira Theatre Ltd. (PSTL), is India's largest theatre chain company, operating mainly across South India. Its share price is surprisingly languishing at Rs.25.5; what an irony!! Please calculate only the Real Estate value of its Properties (excluding business) and let me know what will be the fair price of the scrip.....!!

You will be surprised to find that the share of the company at the current price of Rs.25.5 is trading at a substantial discount to its Fair /Intrinsic Value.

The management is very aggressively pursuing growth abroad apart from the country. The mute question is whether it will be able to manage such a huge expansion. This has led to increased risk, resulting in the counter taking a beating on the bourses despite growth.

Knowing fully well, that surviving solely on exhibition would not exactly give it a superlative growth, it is developing its F&B (Food and Beverage) segment into more than just a provider of snacks and drinks at the theatres.

It is trying to create a niche for itself in the F&B segment with 3 (three) food courts, 1 (one) restaurant and 110 (One hundred ten) cafeterias inside theatres in operation with the following brands - Apple Tree, Red Curry, Shivalay, Augrita, Asparagus, Thall, Cineteria, Beverage & More and the latest being Brahmin’s Kitchen--an initiative to bring traditional Brahmin food in the modern format. This division of PSTL is well on its growth path in becoming a full-fledged food and restaurant business entity.

Pyramid Saimira distributes almost eight films a month on an average in Tamil, Telugu, Hindi, Kannada, Malayalam and many other languages. The Indian entertainment and media industry is estimated to touch Rs 1,15,700 crore by 2012.

Theatre chain company Pyramid Saimira Theatre Limited (PSTL) is planning to launch a private equity fund to invest in films. The fund will raise Rs 250 crore initially.

The Company is to modernize 250 screens in South India and plans to invest Rs 200 crores towards renovation in the next 18 months.

It will raise another Rs 250 crore once the initial Rs 250 crore is deployed. The fund plans to invest in mid-tier budget films costing around Rs 3-5 crore, with PSTL funding 75-80% of the total production cost.

The news of PSTL's plans of a venture fund to invest in films has been doing round for past several years. In 2006, it was said to be planning a $150 million fund for films, which was to be divided in three funds of $50 million each based on the level of risk and exposure.

A host of film focused funds have entered the market since then. Cinema Capital Venture Fund, (CCVF) was launched this year with a corpus of Rs 500 crore. Religare Enterprises also has a JV with Vistaar Entertainment to float a fund to finance films with a targeted corpusof Rs 200 crore. Then there is also Indian Film Company, which raised $110 million from the Alternative Investment Market (AIM) of London Stock Exchange.

Quite a few private equity funds are looking to invest in India's media and entertainment market, which is large and growing.

The Indian entertainment and media industry is estimated to touch Rs 1,15,700 crore by 2012 with a compounded annual growth rate of 18% between2008-12, according to a recent report.