What The Merger Of PVR And INOX Means For The Indian Entertainment Industry
The merger of PVR Ltd and INOX Leisure Ltd will result in the formation of the country’s largest entertainment firm.
The merger is predicted to bode well for the future of the Indian cinema exhibition sector, as well as to create enormous value for all stakeholders.
On Sunday, the boards of both firms authorized the merger and share exchange ratios. As a result, INOX shareholders will receive three PVR shares for every ten INOX shares they own. Following the merger, promoters of PVR will own 10.62% of the new merged entity, while INOX promoters would own 16.66%.
Following the merger, INOX promoters will join the present PVR promoters as co-promoters in the amalgamated firm. Furthermore, the amalgamated entity’s board of directors would be restructured, and the total board strength will be ten members. Furthermore, both promoter families will have equal seats on the board, with two seats for each promoting family.
Currently, PVR operates 871 screens across 181 locations in 73 cities in India while INOX presently runs 675 screens in 160 locations in 72 cities in the country. Following the merger, the new entity will become the largest cinema exhibition company in India and will have a combined strength of 1,546 screens across 341 locations in 109 cities in the country.
On Friday, PVR shares closed 2.84% higher at Rs 1,827.60 on the BSE. INOX Leisure stock price increased by 6.10% to Rs 469.70.
The combination is intended to boost the expansion of the Indian film exhibition business while also creating enormous value for all stakeholders, including customers, real estate developers, content creators, technological service providers, the state exchequer, and employees.
Ajay Bijli will be named managing director, and Sanjeev Kumar will be named executive director. Pavan Kumar Jain would be chosen as the new merged entity’s non-executive chairman, while Siddharth Jain is slated to be appointed as a non-executive, non-independent director.
“The combined entity will be named as PVR INOX Limited with the branding of existing screens to continue as PVR and INOX respectively,” PVR said in a statement.
The theatres of the new merged entity are to be called PVR INOX. While addressing the challenges provided by the proliferation of OTT platforms and the aftereffects of the pandemic, the united business will also seek to bring world-class movie experiences to consumers in tier 2 and tier 3 markets, according to PVR and INOX.
For the quarter ended December 2021, INOX reported revenue of Rs 296.47 crore and a loss of Rs 1.31 crore. PVR lost Rs 24.53 crore in the third quarter on a revenue of Rs 546.94 crore.
“The film exhibition sector has been one of the worst impacted sectors on account of the pandemic and creating scale to achieve efficiencies is critical for the long-term survival of the business and fight the onslaught of digital OTT platforms,” said Ajay Bijli, Chairman and Managing Director of PVR.
The Indian entertainment and cinema screening industry is moving into a phase of rebound albeit with several headwinds The merger of PVR and INOX will increase productivity due to increased scale, a deeper reach of the market, and multiple opportunities for cost optimization opportunities, said Siddharth Jain, Director, INOX Leisure. For cinema-goers, the merger will result in world-class experiences and landmark innovations, Jain added.