Hit Tamil filmmaker Ajay Gnanamuthu has announced that he is making his debut as a producer with the upcoming Demonte Colony 2 and will also be penning the story, screenplay, and dialogues for the film, which is the sequel to the 2015 smash hit supernatural thriller Demonte Colony. The upcoming film announced on the seventh anniversary of Demonte Colony's release (May 22, 2015) will be directed by Venky Venugopal, a former associate of Ajay Gnanamuthu, and will also see actor Arulnithi Tamilarasu reprising his role from the original. 

Ajay Gnanamuthu, who is currently busy with the post-production works for his big-budget directorial Cobra starring 'Chiyaan' Vikram, issued a press release about Demonte Colony 2 while informing that the film will roll into production this July. The Imaikkaa Nodigal director said, "Demonte Colony is very special and close to heart for everyone involved in the project. The feedback and response from audiences, critics and trade circle were completely amazing. The scenario didn’t end there as many producers, distributors, and friends from the film industry inquisitively kept asking about Demonte Colony 2. Such encouragements and positive words prompted me to craft the script. When approached Arulnithi sir, he too liked the script, and we decided to proceed. It’s really great to see that his career graph has escalated a lot now, and his presence in this project would be a great crowd-pulling factor. I’m happy that Arulnithi who believed me and initiated my direction career is again entrusting me and initiating my career as a producer." 

Speaking further about Demonte Colony 2, Ajay Gnanamuthu said, "Personally, I have always been fascinated by Hollywood’s ability to create franchises for horror genres like The Friday The 13th, Halloween to the contemporary The Conjuring Universe. With vivid inspiration, we have also decided to take forward Demonte Colony as an uncompromised relentless hard-core horror franchise which will have subsequent parts made hereafter.” We will be kick-starting the shoot of Demonte Colony 2, by July 2022. Currently, we are holding talks with the leading artistes and technicians from the industry, and will accordingly make the official announcements soon."