PVR delivers a super hit performance after announcing a merger with Inox Leisure

As per the share exchange ratio, for every 10 shares of Inox Leisure, shareholders shall receive 3 shares of PVR Ltd.

PVR Ltd, an S&P BSE 500 company, surged significantly today after the company announced a merger with Inox Leisure. Earlier this month, there were speculations about a possible merger between PVR Ltd and Cinepolis India. The announcement made by the company yesterday puts an end to these speculations.

Post the announcement, the shares of PVR Ltd were trading higher by 10% in the pre-opening session today. Similarly, the share price of Inox Ltd hit the upper circuit of 20% during the same time.

Why this merger?

At present, PVR Ltd operates 871 screens across 181 properties in 73 cities and INOX operates 675 screens across 160 properties in 72 cities. Post the merger, the combined entity will operate 1546 screens across 341 properties across 109 cities, becoming the largest film exhibition company in the country.

The merger shall bring about immense value creation for all stakeholders, comprising customers, real estate developers, content producers, technology service providers, the state exchequer and above all, the employees.

It intends to focus on using the strengths of both the organizations to provide exceptional customer service and cinema experience to Indian moviegoers.

Moreover, to battle the adversities brought about by the advent of various OTT platforms and the after-effects of the pandemic, the combined entity intends to target the consumer segment in Tier 2 and 3 markets.

Merger terms

In the new entity, Ajay Bijli will take over as the Managing Director whereas Sanjeev Kumar would be appointed as the Executive Director. Pavan Kumar Jain would be appointed as the Non-Executive Chairman of the Board. Further, Siddharth Jain shall work as the Non-Executive Non-Independent Director in the combined entity.

The combined entity will be named PVR INOX Limited with the branding of existing screens to continue as PVR and INOX respectively. New cinemas opened post the merger will be branded as PVR INOX.

Post the merger, the promoters of PVR Ltd shall hold a 10.62% stake, while INOX Promoters will hold a 16.66% stake in the combined entity.

At 12.36 pm, the shares of PVR Ltd were trading Rs 1901.25, higher by 4.03% from the previous week’s closing price of Rs 1827.60 on BSE.