Manmohan Shetty, 70, is looking relaxed in his track pants. He has landed an hour early at ‘The Club’ for the interview before he gets down to a game of tennis at this patch of green for the upper crust in Mumbai’s suburb of Andheri. If you thought he has retired, he quickly dispels that impression. He has returned from a meeting with the Union Bank chief, with whom he is negotiating a revision of terms for a Rs 200 crore loan.
Shetty, for more than two decades that this writer has followed his fortunes, has always mixed conservative business practices with out-of-the-box forays. His anchor business was his film processing laboratory in Mumbai’s Film City, founded in 1976, which by the 1990s has grabbed 80 per cent of the market. As a movie producer, he mixed off-beat films like ‘Ardha Satya’ with the big-starrers like ‘Gangaajal’ and ‘Munnabhai MBBS’. He pioneered a new phase in the exhibition business, setting up the first iMax dome in the country and a string of multiplexes.
Manmohan Shetty was always careful not to overstretch himself and ran a tight Rs 100 crore business, when opportunity came knocking. Anil Ambani had just split from brother Mukesh and was itching to get into the entertainment business. Shetty cashed out selling Adlabs and his film and exhibition chain in July 2005 for Rs 360 crore. In those early days of the entertainment boom, it was the largest deal of the industry.
Over a decade later, and grappling with the challenges of his `1,600 crore theme park Adlabs Imagica, Shetty is wondering if that big leap forward should have been done differently. “Imagica has grown, but with 1.6 million visitors a year, it is not sustainable. We were counting on 2 million and even 2.5 million a year,” he says.
THE BIG LEAP
Imagica, launched in April 2013 on a 130-acre layout on the Mumbai-Pune Expressway, was again a pioneering initiative with world class themed rides like ‘Alibaba aur Challis chor’, a water park and a Novotel hotel. Along with his own money, Shetty raised `1,100 in debt from a consortium of banks; but Imagica’s slow growth has created a debt-plus-interest overhang that is choking him.
“Have I got my ‘catchment’ wrong?” he asks, and replies, “We first thought the catchment was the whole country as we had a world class park. However, we found families preferring to fly to Singapore’s Universal Studios or to Dubai because the flight ticket was the same. So, we were reduced to the local Mumbai-Pune market.” Shanghai Disneyland Park with 11 million visitors has been profitable from day one. But it is not just the brand. The Ocean Park in Hong Kong is a standalone local brand, but it attracts 6-7 million visitors a year, he explains.
“The lesson is that perhaps I should have done several smaller parks, each of them at `300-400 crore to get the ‘catchment’ of various cities. It would have lowered cost and given me faster growth,” rues the entertainment expert. The Wonderla group in the South has experimented with these smaller configurations and done well, he says. The Walt Disney Company, which was mulling setting up theme parks in India about five to six years ago, shied away in favour of China. In the case of the Shanghai Disneyland Park, the Chinese government had put in 50 per cent, investing in infrastructure and connectivity.
But Manmohan Shetty does not accept the ‘India-is-not-ready’ theory. He believes the government, instead of spending time on advertising temples and heritage sites, which already have a market, should be promoting new entertainment destinations. “Our government has not done enough for entertainment tourism,” he says. He is confused where the problem lies. Is it too many forms of parallel entertainment that can be accessed from the comfort of home? Netflix, Amazon? But then in the US, all the entertainment platforms – theme parks, multiplexes, Netflix – all exist and do well.
So how is Shetty coping? The banks have agreed to take a ‘haircut’ by postponing recovery of principal. Shetty has shelved plans for a string of theme park launches in Goa and other centres and is considering selling 200 acres of the original acquisition of 300 acres to reduce debt. He has even set up a new initiative to develop affordable housing units on 10 acres abutting the Imagica Park to provide residences for those working in suburban industries in the area.
From Bollywood to builder, he has come a long way!