Inox Leisure’s stock has risen past pre-covid highs as a result of its merger with PVR.

PVR Ltd and Inox both saw their stock prices rise on the NSE on Monday morning. This follows the announcement on Sunday of a merger between the two corporations. Inox’s stock increased by 13% to Rs531 per share, exceeding COVID highs of Rs495 per price set on February 24, 2020. PVR’s stock, on the other hand, increased by about 8% and is now just modestly below its pre-covid highs.

Inox owners will get three PVR shares in exchange for 10 Inox shares.  Motilal Oswal Financial Services experts said in a report on March 28. Enterprise value is abbreviated as EV. EBITDA stands for earnings before interest, taxes, depreciation, and amortisation.

merger came amid when the fear of getting the COVID-19 is subsiding, and demand for cinema tickets is expected to rise sharply in the coming months, unless there are new restrictions imposed by a significant outbreak of covid-19. Remember that both enterprises have lost a lot of money in the last two fiscal years, with the multiplex industry being one of the most impacted because to the pandemic’s stringent limitations.

its corporations will build a monster, with 1546 screens spread over 341 locations. Furthermore, due to the minor scope of activities in FY21, the combination may not require clearance from India’s Competition Commission (CCI). “The timing of the purchase is shrewd because CCI permission (which would be tough in a regular year) is only required for firms with a sales ceiling of Rs1000 crore or above in the previous financial year,” an analyst who asked to remain anonymous said. PVR and Inox had consolidated income from operations of Rs280 crore and Rs106 crore, respectively, in FY21.

Without the merger, observers believe both firms would have done well on their own. “Given Inox’s recent significant expansion, we believe the gap could have been bridged even without transaction.” PVR, too, could be able to accelerate its growth by utilising its balance sheet.
screen increases after repeated rounds of finance in recent years, according to Motilal Oswal’s analysts.

“I believe they want to strengthen their negotiation position against OTT ” says another expert who asked to remain anonymous. “Creating scale to create economies is important for the long-term existence of the company and fighting the assault of digital OTT platforms,” PVR said in a statement announcing the merger.

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