New Delhi, Feb. 23 -- A flurry of strategic deals in India's film production business is set to swell the pipeline of small and mid-budget movies, even as structural constraints in theatrical releases raise questions about where those films will ultimately play.

Multiplexes in major cities are more open to mid-budget and regional films, but tier-two and tier-three markets remain thinly served. As a result, the industry remains divided on whether the increasing volume of films can find adequate theatrical infrastructure.

Recent deals that underscore the shift include Reliance Industries Ltd-owned Jio Studios' acquisition of a 50.1% stake in Sikhya Entertainment Pvt. Ltd. Meanwhile, music label Saregama has invested Rs.325 crore in an ini...