Two of the biggest players in the film screening industry, PVR and INOX have joined hands now and have announced a merger. Their stock amalgamation has been approved with a stock swap ratio of three shares of PVR for ten shares of INOX.
The new entity will now be named as PVR INOX Ltd.
The new joint company now has over 15,000 screens spanning over 72 cities in over 160 locations.
As of the fiscal year of 2020, INOX’s ad revenue per screen amounted to two thirds of PVR’s as revenue. The executives of either entities believe that the merging of two already successful companies can only be positive and lead to higher gains through advertising, where Inox would catch up with PVR initially and then the integrated entity could even command a higher premium over the course of time.
INOX also charges their customers lesser with cheaper fees. In fact, INOX only brings in half of what PVR rakes in in term of convenience fees per screen. The entire structure of their charges is set to be revamped according to top officials.
With this new merger, the combined corporation now owns half the screens in the country. Both companies have operations all over the nation, but PVR dominates the north, south and west while INOX’s main stronghold lies in the east.
However, with respect to total earnings generated, the integrated entity takes up just under half of the total share. But according, to experts, their share is only bound to rise as this new merger only means that they can reduce the costs and fast track many processes to increase their margins.
The entire film screening industry is now a two–horse race with Cinepolis lagging behind this behemoth of a merger. Cinepolis owns almost a third of the total. The industry as a whole was rattled up by the advent of the coronavirus and the lockdown rules set by the government. With almost zero revenue in the two years, many screens failed to stay afloat and eventually crumpled. INOX and PVR, too ran massive losses during the fiscal year of 2020 and most of 2021 too, therefore, this merger came as a shock to most people including experts as other players are now just getting readjusted and used to the market and other government laws.
With people now revisiting theatres to watch their favourite movies, the industry is here to grow.