India’s PVR, Inox merge as Covid, streaming squeeze cinemas

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Two of India’s biggest exhibitors, PVR and Inox, are merging in a deal that creates a circuit with 1,546 screens.

Both PVR and Inox are family founded and operated businesses. The merger is taking the form of a share exchange in which three equity shares of PVR will be swapped for ten equity share of Inox. Following the merger, both families will have two seats each on the ten-person board. 

PVR founder Ajay Bijli will be managing director of the merged entity with Sanjeev Kumar Bijli as executive director. Inox founder Pavan Kumar Jain will take the role of non-executive chairman of the board, with Siddharth Jain as a non-executive non-independent director. 

Following the merger, the PVR founders will have a 10.62% stake in the company, while the Inox founders will hold a 16.66% stake. The combined entity will be named PVR Inox, with existing screens maintaining their separate branding, and new screens opened post merger branded as PVR Inox. 

The merger follows two punishing years of Covid-induced cinema shutdowns and the rise of streaming in India. While cinemas are currently mostly open across the country, and Telugu blockbuster RRR opened strongly this weekend, box office has not recovered to pre-pandemic levels and some producers are continuing to debut their titles on streaming services. 

Commenting on the deal, PVR chairman and managing director Ajay Bijli said: “The partnership of these two brands will put consumers at the centre of its vision and deliver an unparalleled movie-going experience to them. The film exhibition sector has been one of the worst impacted sectors on account of the pandemic and creating scale to achieve efficiencies is critical for the long term survival of the business and fight the onslaught of digital OTT platforms.”

Inox Leisure director Siddharth Jain said: “As we head into the industry’s revival amidst headwinds, this decisive partnership would bring in enhanced productivity through scale, a deeper reach in newer markets, and numerous cost optimization opportunities, and continue to delight cinema fans with world-class experiences and landmark innovations.”

Even before Covid and the rise of streaming, India’s exhibition infrastructure was struggling to expand. Compared to China, the property sector was not moving quickly to throw up new shopping malls and multiplexes are hit by high entertainment taxes and restrictions on ticket price increases in many states. 

Before this deal was hatched, Indian press reported that PVR was in merger talks with a third circuit, the Indian operations of Mexican exhibitor Cinepolis.