In one of the biggest industry news after the Coronavirus pandemic, PVR and Inox, the two largest multiplex chains in India, today (March 27) announced their proposed merger. The board of directors of the two national multiplex chains, in their respective meetings held today (March 27), approved an all-stock amalgamation of Inox with PVR.
Post the merger, Inox promoters will have 16.66% stake in the combined entity while PVR promoters will have 10.62% stake. Of course, the merger is subject to the approval of the shareholders of the two companies, stock exchanges, SEBi and other regulatory approvals.
After this happens, the combined entity will be the largest exhibition company in the country, operating 1,546 screens across 341 properties in a total of 109 cities. The new entity will be named PVR Inox. However, the branding of the existing screens will continue as PVR and Inox respectively. New cinemas after the merger will be branded as PVR Inox. PVR currently operates 871 screens across 181 properties in 73 cities. On the other hand, Inox has 675 screens across 160 properties in 72 cities.
Post the merger, the promoters of Inox will become co-promoters in the merged entity along with the existing promoters of PVR. The board of the merged company will be reconstituted with a total strength of 10. Both the promoter families will have equal representation with two board seats each. PVR’s Ajay Bijli and Sanjeev Bijli will be appointed managing director and executive director respectively. Inox’s Pavan Kumar Jain and Siddharth Jain will be appointed as non-executive chairman and non-executive non-independent director respectively.
Shareholders of Inox will receive three shares of PVR for 10 shares of Inox. It is believed that the merger may not require the approval of the Competition Commission of India as the combined revenues of the two companies (PVR Ltd. and Inox Leisure Ltd.) are well below Rs. 1,000 crore, thanks to COVID-induced closures in the last almost two fiscal years.
As per the audited financials for the quarter and year ended March 31, 2021, Inox Leisure Ltd. has total assets of Rs. 3,784 crore, turnover of Rs. 148 crore (including other income of Rs. 42 crore), and net worth of Rs. 663 crore. As per the limited review financials for the quarter and six months ended September 30, 2021, Inox has total assets of Rs. 3,892 crore, turnover of Rs. 79 crore (including other income of Rs. 9 crore), and net worth of Rs. 720 crore.
As per the audited financials for the quarter and year ended March 31, 2021, PVR Ltd. has total assets of Rs. 7,450 crore, turnover of Rs. 698 crore (including other income of Rs. 472 crore), and net worth of Rs. 1,840 crore. As per the limited review financials for the quarter and six months ended September 30, 2021, PVR has total assets of Rs. 7,348 crore, turnover of Rs. 345 crore (including other income of Rs. 190 crore), and net worth of Rs. 1,485 crore.