Will The PVR-Inox Merger Affect The Industry?

Popular Multiplex chains PVR and INOX got approval from the Mumbai bench of the National Company Law Tribunal for their merger. A written order is expected within two weeks. The merger ratio would be three shares of PVR for ten shares of INOX.

Last year PVR and INOX announced a merger to developing the largest multiplex chain in India, with a network of over 1500 screens. PVR Chairman Ajay Bijli is planning to increase the screen count to 3,000-4,000 screens in five years for the combined entity.

The theater chain will be named PVR INOX Limited.

The trade analysts believe that the merged entity will have a 50% screen share within multiplex space in the country, and PVR and INOX will have a combined box office share of 42% for Hindi and English content in terms of box office revenue.

That means the merged entity will now have much higher bargaining power in terms of rentals, content costs, marketing expenses, etc. It is expected that the merger would make the multiplex industry a two-player market in the country.