Chhavideep Singh
Source: New Indian Express
PVR Limited is India’s largest cinema chain operator which established its first multiplex cinema in 1997 at Saket, New Delhi.
Recently, the Gurugram-based multiplex operator has raised INR 800 crore from investors by issuing shares through QIP or Qualified Institutional Placement. For those of you who don’t know what a Qualified Institutional Placement is, it is a capital-raising tool primarily used in India and some regions of Southern Asia wherein a listed company can issue equity shares to Qualified Institutional Buyers (QIB). QIP not only deals with the issue of equity shares, but it also deals with fully or partly convertible debentures or any securities which are then converted to equity shares before they are issued to the Qualified Institutional Buyers.
Qualified Institutional Placement is mostly preferred by companies because unlike other methods of raising capital, this particular mode does not include elaborate procedural requirements to raise capital.
As mentioned by PVR Limited in a regulatory filing, the fund-raise committee of the multiplex company approved the issuance and allotment of 55.55 lakhs or 55,55,555 equity shares to eligible Qualified Institutional Buyers (QIBs) at the issue price of INR 1,440 apiece equity share. This calculation aggregates to an approximate total amount of INR 800 crore.
PVR Limited mentioned in a statement that the issue opened for five days i.e., from January 27, 2021, to February 1, 2021, according to a report by Business Today.
Moreover, the share value of the company on the Bombay Stock Exchange was trading 0.29% higher than usual at INR 1,529.30 per share, as mentioned in several reports.
The COVID-19 pandemic hit the show business very hard as all cinema halls were closed for many months since March-April 2020. After the peak of the pandemic had crossed India, the government imposed a 50% cap on cinema halls.
Recently, the Union Ministry of Home Affairs (MHA) has lifted the 50% cap on cinema halls in its latest COVID-19 reopening guidelines, as mentioned in a report by Business Today. These guidelines were to take effect from February 1 and this means that PVR will be back in business with full strength.
Showbusiness along with several other industries have taken a huge hit in sales because of the COVID-19 pandemic but slowly these businesses are getting back on track.
However, in the absence of cinema halls, people shifted to OTT platforms for their entertainment and several movies, during the lockdown were released worldwide on OTT platform such as Netflix, Amazon Prime, Disney+ Hotstar among many others.
Do you think this change will affect the Cinema business in the future? Comment down below.