Multiplex chains PVR Ltd and Inox Leisure Ltd had announced a merger last year. This happened after the industry was hit hard by closures due to the pandemic that wiped out a lion’s share of the industry’s revenue. Moreover, the rise in the consumption of OTT content added fuel to the fire. OTT platforms in India obtained subscribers at an alarming rate.
PVR and INOX joined forces and the combined entity now controls a 50% market share of India’s multiplex industry. This merger was aimed at combating the competition between multiplexes and OTT platforms.
According to an exchange filing, the merger is on the verge of completion. The merged entity has been renamed as “PVR INOX Limited” with effect from April 20, 2023. It now operates the largest multiplex network with 1683 screens at 360 properties in 115 cities (India and Sri Lanka). The name of the company has not yet been changed on the exchanges and it will be done in due course.
PVR Inox’s shares closed at ₹ 1447.00 apiece, down 2.14% on the National Stock Exchange (NSE) on Wednesday. They reached a 52-week low of ₹ 1438.10 apiece during intraday trades.
In the past year, the company’s share price fell by 19.05%. A major reason for the fall is the selling by foreign institutional investors (FIIS). They trimmed their holdings in the company from 41.93% in the December quarter of 2022 to 31.20% in the March quarter of 2023, given unfavourable developments in global markets.
Moreover, the industry is facing seasonal weakness due to school and college exams across the country, leading to reduced footfall.
Despite the short-term hiccups, brokerage firm Anand Rathi has a buy call on the company’s shares with a target price of ₹ 1784.00 apiece. This translates to an upside of 23.29% as compared to its share price of ₹ 1447.00 apiece.
Written by Simran Bafna
