With its commercial operations started in 1997, PVR is one of the largest cinema chains in India. The brand has over 161 locations spread all over the country. Its net income is estimated to be 1 Billion USD, with average revenue of 225.8 Million USD. With the movie theatre industry becoming increasingly competitive, PVR is now looking to raise funding through Qualified Institutional Placement (QIP) worth 100 Million USD. In recent weeks, the brand has held many meetings with potential investors regarding the same.
Partnering up with Kotak and CLSA for financial operations
In order to manage their extensive fundraising process effectively, PVR has appointed Kotak Mahindra Capital and CLSA as their financial partners. The brand has also held a few roadshows for their investors and based on the responses they garner in the coming days and weeks, they will be launching their offerings soon. It all depends on whether the market conditions are supportive of the kinds of trades they have in mind.
Though PVR as not revealed its plans for expansion, an anonymous source that is close to the deal stated that the brand plans to pump in the money for avenues for inorganic growth. This probably means that their new business verticals might be slightly removed from the movie industry, but there’s no way of knowing for sure until they actually make the announcement.
PVR has already gained board approval for raising funds. In fact, in December 2018, the board approved the brand raising funds that reached an upper limit of 750 Crore INR. They plan to sell equity shares in order to raise these funds through various means, including the QIP. Apart from meeting investors from India, PVR has also met a few investors from Singapore and Hong Kong.
PVR’s Performance in India
PVR is one of the largest movie theatre chains in India. It operates more than 748 screens which are spread over 161 locations. With a strong presence in 64 cities, PVR’s own reports indicate that they hold 22% of the market share of Bollywood box office and 34% of the same for Hollywood Box office. At the end of December 2018, PVR reported a 9-month revenue worth 2,272.5 crore INR. This indicated that they had experienced an increase in their revenue by 28% when compared to the earnings they had over the same time frame during the previous year.
In 2018, PVR also acquired a significant stake in a South Indian movie hall chain called SPI cinemas. This chain operates over 76 screens in 17 properties that are spread across 10 cities. They paid 633 Crore INR in cash for this deal. They also acquired 32 screens from DT cinemas (which belongs to DLF) for 433 Crore INR. Moreover, the brand spent 395 Crore in 2012 to acquire a Mumbai based movie screening brand called Cinemax.
With these acquisitions in mind, PVR certainly has huge plans for expansion throughout India. Let us see what exactly they want to facilitate their ‘inorganic growth’.