CINEMA SCOPE

HOW THE MARRIAGE OF COMPULSION BETWEEN PVR AND INOX, INDIA'S BIGGEST MULTIPLEX COMPANIES, MIGHT JUST HELP THEIR BELEAGUERED THEATRES RECOVER FROM THE TWIN BLOWS OF THE PANDEMIC AND THE OTT ONSLAUGHT. AND ALTER THE DYNAMICS OF THE FILM EXHIBITION BUSINESS

- KRISHNA GOPALAN AND VIDYA S.

A MERGER OF TWO companies is often called a meeting of minds. By any yardstick, it is a complex affair that involves a host of issues ranging from financial metrics, a cultural fit and, perhaps most importantly, keeping differences aside in the interest of creating a robust organisation.

Much of this is true in the case of PVR Ltd and INOX Leisure Ltd, two big names in the multiplex space. They competed fiercely, although some regions were always their respective strongholds—north, south and west India for PVR, and east and central for INOX. The two men at the centre of this new entity called PVR-INOX, Ajay Bijli and Siddharth Jain, are candid when they speak of how the pandemic played havoc. Business came to a standstill and the emergence of OTT (over-the-top) did not do their cause any good. Revenue took a huge beating—PVR’s revenues fell 91 per cent, and INOX’s 92 per cent in FY21—and an uncertain future with a disruptive present made for a marriage of compulsion.

Together they are stronger— PVR-INOX will have 1,546 screens across 109 cities. It is a combo with substantial ability to derive significant cost and revenue synergies in addition to driving a serious bargain across all components of the multiplex business. Not surprisingly, analysts and industry trackers are enthused and the stocks of both companies, ever since the merger was announced on March 27 (Sunday), surged to new highs. PVR closed at ₹1,883.50 on March 28, up 3 per cent from its previous close; and INOX closed 11 per cent higher at ₹522.90.