PVR, INOX to merge to become the largest multi-screen players in India

New Delhi: PVR and INOX, India's top two multiplex chains on Sunday announced a surprise merger to create the country's largest multi-screen player as they looked to emerge from the pandemic-induced slump and seek to tackle the onslaught from content streaming giants.

Ajay Bijli of PVR and Siddharth Jain of INOX Leisure told TOI that the move will help the merged entity- to be called PVR INOX with over 1,500 screens - better compete with the new-age deep-pocketed rivals, and added that the benefits of the synergy may be passed on to the consumers in terms of aggressive ticket prices.

"We will become an entity with much stronger balance sheet. There is a lot to be done, and India is still an under-screened country," said Bijli, who will be the MD of the merged entity. He conceded that the pandemic exacerbated the need for consolidation in the multiplex industry, and "creating scale to achieve efficiencies is critical for the long-term survival of the business and fight OTT platforms

"There is no doubt that consumer (content viewing) habits got changed (during the pandemic) One can say that there was no choice but to consume a lot of content on small screens and OTT platforms… you have big OTT players with very deep pockets. Only if you become stronger can you do that (compete). The pandemic expedited consolidation and made it more of an important thing to happen," Bijli added.

Jain, who will be a non-executive director on the board of the merged entity, said that multiplex cinema screens were the "hardest hit" in the past two years and a stronger, merged entity was an effective way to make a comeback while also growing operations. "Someone has to start the investment cycle. What better way to do that than come together and do it… This partnership will bring in enhanced productivity through scale, a deeper reach in newer markets and numerous cost optimisation opportunities."

The amalgamation is subject to regulatory approvals, which may take six to nine months. With the biggest screen population for any entity (India has around 9,600 theatre screens), the merger will also require approval over competition issues.

As part of the plan, INOX will merge with PVR. Post-merger, PVR promoters will hold 10,62% stake while INOX promoters will have 16.66% in the combined entity.

INOX shareholders will receive three shares in PVR for 10 shares of INOX. The new company will have a board strength of 10 members, and both promoter families would have equal representation with two seats each.

And while branding on the existing screens run by the individual companies will be maintained, new cinemas that will be opened post the merger will be branded as PVR INOX.

PVR currently operates 871 screens across 181 properties in 73 cities and INOX operates 675 screens across 160 properties in 72 cities. The combined entity will become the largest film exhibition company in India operating 1,546 screens across 341 properties in 109 cities.