PVR Cinemas and INOX Leisure are preparing to merge in what will be a mega consolidation of the two largest movie theatre chains in India, people with direct knowledge of the matter told Moneycontrol.
The PVR and Inox Leisure boards are likely to meet on Sunday, March 27, to give their approval for the merger, these people said, asking not to be named.
Combined merged company will form a large company with over Rs 16,000 crore market cap. Inox Leisure stock rose over 6% on Friday to end at Rs 470/share with Rs 5,700 crore market cap. PVR shares ended up 1.55% on Friday at Rs 1804/share at the market cap of over Rs 11,100 crores.
Also Read: PVR expects business to reach pre-pandemic levels in first quarter of FY23
Combining forces to tide over the pandemic inflicted performance slowdown is said to be the primary reason for the mega consolidation by the top two players in the theatre business, PVR and Inox Leisure. Stiff competition from the OTT (over-the-top) players is also posing a threat to this business, sources share. This merger also means that PVR-Cinepolis merger talks may be on hold.
PVR holds the number one position with 860 screens while Inox is second with around 667 screens. 400 screens are owned by the India business of Mexico-headquartered Cinepolis’s in the country.
PVR had a total gross debt of Rs 1,536 crore and Rs 678 crore liquidity as of December 31, 2021. Its revenue nosedived from Rs 3,452 crore in FY20 to Rs 310 crore a year later due to the pandemic and it has been scouting around for strengthening forces by consolidation.
Moneycontrol reached out to both the companies but did not get any response from the spokespersons of PVR & Inox Leisure.