PVR-INOX merger on track to be completed by March 2023, confirms INOX Leisure CEO

Business Today, December 21, 2022

The merger between the country’s top two multiplex chains – PVR Limited and INOX Leisure – is on track to be completed by the end of the current financial year of 2022-23, a year after the deal to bring the erstwhile rivals together was first announced.

“The merger is on track. It’s only a matter of time now. Hopefully, by the end of this financial year the two companies will be one,” INOX Leisure CEO Alok Tandon told Business Today on Wednesday.

The merged entity, to be called PVR-INOX, will become the largest film exhibition company in India, operating 1,546 screens across 341 properties in 109 cities, according to the merger announcement on March 27, 2022.

After the merger, the combine plans to open 200 new screens every year under the brand name PVR-INOX rather than refurbishing old properties. A capex of Rs 500 crore will be pumped into setting up the new screens.

Until then, the two operate as separate exhibition companies and continue to expand in different locations. “We’ve opened five INOX Leisure screens in Delhi and three in Vijaywada today. We have given a guidance of 70 new screens for the ongoing financial year and have opened 45 screens so far in Gulbarga, Hyderabad, Gurgaon, Lucknow, Srinagar, Mysore, Vizag and Vijaywada among other locations,” said Tandon. INOX Leisure, the second largest national multiplex chain, will open new screens in both tier-1 and 2 cities across the country such as Hyderabad, Indore, Dharwad, Ahmedabad, Patna and Chennai in this financial year, he added.

The branding of existing screens will continue as INOX and PVR, respectively. Only new theatres opened after the merger will be branded as PVR-INOX.

The merger has got the approval of the respective shareholders of the two firms, their creditors, stock exchanges NSE and BSE as well the Competition Commission of India. The two companies had sought the approval of National Company Law Tribunal (NCLT), but non-profit group Consumer Unity & Trust Society (CUTS) moved the National Company Law Appellate Tribunal (NCLAT) against CCI’s nod for the merger. In September, CCI had rejected CUTS’ complaint against the merger.

Analysts estimate the combine will command a 50 per cent share among multiplex screens and 16 per cent in the overall market including single screens. In terms of shareholding in the merged entity, the INOX promoters will hold 16.66 per cent, while the PVR founders’ share will be 10.62 per cent.

INOX’s Pavan Kumar Jain will be the non-executive chairman of the merged entity, while PVR’s Chairman and MD Ajay Bijli will be the MD. His brother Sanjeev Kumar Bijli will be the executive director and INOX Leisure Director Siddharth Jain will be non-executive, non-independent director in the combined entity.

The PVR-INOX combine is also likely to foray into film production and ramp up its distribution and food & beverage businesses after the proposed merger as a way to diversify revenue. The promoters also believe the risk around the content business is reduced with many avenues being available for content to be taken up.

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