A day after top multiplex players PVR and INOX announced a merger deal to create a cinema giant with over 1,500 screens, Ajay Bijli, Chairman and Managing Director (CMD) of PVR said the deal does not meet the threshold limit to seek approval from the Competition Commission Of India (CCI).
"Counsels have advised that the merger proposal with INOX does not need CCI approval as both of us were shut for two years due to the pandemic and companies' turnovers were impacted, which exempts us from the CCI purview,'' Bijli said in an exclusive interview with CNBC-TV18.
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However, Bijli added that the merger will need approval from the stock exchange. ''The deal will require approvals from SEBI, NCLT, and also the shareholders' nod - all this will take about six-to-nine months,'' he noted.
As per the deal, Bijli will serve as the managing director of the combined entity and INOX Group Chairman Pavan Kumar Jain will be appointed as the non-executive chairman of the board.
Siddharth Jain will be appointed as a non-executive non-independent director in the combined entity, said the two firms in an exchange filing.
''The merged entity is looking to double the number of screens in the next five-to-seven years compared to the current 1,500 screens,'' said Siddharth Jain, Chairman of INOX Leisure in an interview with CNBC-TV18.
Jain is hopeful that the merger deal will encourage the real estate industry to construct more theatres and malls which stopped in the last two years.
Explaining the significance of the merger, Bijli of PVR stressed the huge beating that the exhibition sector took during the pandemic and that deal will add momentum to the business.
''India has a robust film industry and out-of-home viewing market as around 1,500 movies are made every year and 1.4 billion people go to watch every year, so this should not get impacted,'' said Bijli.
He added that the 'coming together' of PVR and INOX will benefit the consumers, the film industry, and all stakeholders as the mall owners, among others, need to stabilise from the pandemic impact.
On March 28, share prices of PVR and Inox Leisure rose five and 16 percent respectively in early trade, a day after the announcement of their merger deal. INOX Leisure touched a 52-week high of Rs 563.60 and PVR hit a 52-week high of Rs 2,010.35.
