PVR-Inox combined pipeline at 2,000 screens; plan to double in 7 years

Leading multiplex operators Inox Leisure and PVR, which had announced their merger last month, have a combined pipeline of 2,000 screens and aim to double this size in next seven years, entailing an investment of Rs 4,000 crore.

The merged entity would invest capex of Rs 2.5 crore per screen as part of their expansion, said Inox Leisure Director Siddharth Jain in a Business Update Conference Call with the investors after announcing the merger.

On March 27, PVR and INOX Leisure announced a merger deal to create the largest multiplex chain in the country with a network of more than 1,500 screens to unlock the opportunities in tier III, IV & V cities besides the developed markets.

The combined entity will be named PVR INOX Ltd with the branding of existing screens to continue as PVR and INOX, respectively. New cinemas opened post the merger will be branded as PVR INOX, the companies had said on March 27.

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Responding to a query over the number of screens in the pipeline of the combined entity, Jain said:?We have almost 2,000 screens in our pipeline combined, our stated goal is in the next seven years, we want to double our size, it is going to require at least Rs 4,000 crore of CAPEX (capital expenditure) over the next seven years."

However, he also added that out of the 2,000 screens, only about 50 may be competing with each other.

"Even mall owners would not put it up across the road from each other because they know there is really no point doing that, and we have not looked at it that deeply, yet to see whether there are any places, which we may not go ahead with. We have not dug that deep into it," said a transcript of the conference call quoting Jain, filed by Inox Leisure to the bourses on Monday.

The new screen addition will be diverse and across tiers, he added.

"It is not that we want to take the movie only to certain Indians. We want to take it everywhere wherever we have potential and there is a market," Jain added.

PVR operates 871 screens across 181 properties in 73 cities while INOX operates 675 screens across 160 properties in 72 cities.

As per the agreement, INOX will merge with PVR in a share swap ratio of 3 shares of PVR for every 10 shares of INOX.

Post the merger, promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR. PVR promoters will have 10.62 per cent stake while INOX promoters will have 16.66 per cent stake in the combined entity, it added