PVR and Inox Leisure’s stock prices increased 5% and 16% in early trade, respectively, a day after the announcement of their merger plan to form a movie behemoth with over 1,500 screens.
PVR hit a 52-week high of Rs 2,010.35 and INOX Leisure hit a 52-week high of Rs 563.60.
PVR and Inox, two of the top multiplex operators, announced the transaction after their boards approved an all-stock merger yesterday, subject to approval by PVR and Inox shareholders, stock exchanges, market watchdogs, and others.
At the approved swap ratio, Inox investors will receive PVR shares in return for INOX shares. According to an Inox news statement, shareholders who own 10 fully paid up equity shares of the firm as of the record date (as stated in the scheme) will get three fully paid up equity shares of PVR.
PVR promoters would control 10.62 percent of the merged business after the merger, while Inox promoters will own 16.66 percent. Ajay Bijli will serve as the combined entity’s managing director, while Sanjeev Kumar will serve as the executive director.
The combined organisation would have Pavan Kumar Jain as non-executive chairman of the board and Siddharth Jain as non-executive non-independent director, according to an exchange filing by the two companies.
CLSA maintained a buy recommendation on PVR and Inox because the combination, which is expected to take six months, offers significant synergies.
PVR and Inox have had a robust reopening, and OTT (over the top) services offer no harm to multiplexes in India, according to the report. PVR was trading at Rs 1,931.05 on the BSE at 09:17 hrs, up Rs 103.45 or 5.66 percent, and Inox Leisure was trading at Rs 545.00, up Rs 75.30 or 16.03 percent.
PVR Cinemas began as Priya Cinema in Vasant Vihar, Delhi, which was purchased by Ajay Bijli’s father in 1978 and named after Priya Jaisinghani. Bijli took over the cinema hall, which had been renovated in 1990, and its success led to the establishment of PVR Cinemas.
In 1995, the company was founded as a 60:40 joint venture between Priya Exhibitors Private Limited and Village Roadshow Limited. In June 1997, it commenced commercial operations. Ajay Bijli, the chairman and managing director of PVR Cinemas, started the company. Sanjeev Kumar Bijli, Ajay Bijli’s brother, is the Joint Managing Director of PVR Ltd.
In November 1999, Inox was established as a public limited company.  Gujarat Fluorochemicals Ltd owns the company. The company began operations in 2002 with the opening of its first four-screen multiplex in Pune and second four-screen multiplex in Vadodara. Kolkata, Goa, and Mumbai all got multiplexes in 2004.
In 2006, Gujarat Fluorochemicals issued 1,65,00,000 equity shares of 10 each at a price of 120 per share, comprising of a fresh issuance of 1,20,00,000 equity shares of 10 each and an offer for sale of 45,00,000 equity shares of 10 each.