PVR-Inox merger: We want to roll out 200 screens a year, says Bijli & Jain

From a macro angle, with the consumer behaviour change that has happened, content is getting consumed everywhere: Bijli and Jain

PVR and Inox Leisure have inked a deal to merge and will become India’s largest film exhibition company. In an interview, Ajay Bijli, chairman and managing director of PVR, and Siddharth Jain, director of Inox Leisure, talk to Sharleen D’Souza about the way forward for the merged entity. Edited excerpts:

This merger will make you a dominant player in the industry. Would you get regulatory approvals easily?
 

For regulatory approvals, we definitely have to go through the process — there’s the stock exchange, Securities and Exchange Board of India (Sebi), and National Company Law Tribunal (NCLT). We’ve been told by councils that it doesn’t require a CCI (Competition Commission of India) approval. We don’t believe the word dominant applies to us. This is because India has 9,500 screens and it’s still growing. There are new players who are coming, there are old players expanding, and we’ll have a combined 1,500 screens. From a macro angle, with the consumer behaviour change that has happened, content is getting consumed everywhere. It is not just getting consumed in theatres. So, from that point of view, the revenue pie, which gets created, we are only a subset of it. Revenue monetisation is happening in a lot of areas.

Do you expect any kind of backlash from film producers and distributors, as you will have pricing power? Likewise, you have a stronger bargaining power with advertisers.

We have not really looked at it from this point of view, because it’s a symbiotic relationship. No cinema can survive without content. We need movies, and during the pandemic, you've all seen that movies are going to OTT platforms also. So, nothing is going to change there. We want all stakeholders to flourish. We are looking at the overall pie of the gross box office collections of India that really got impacted. Even pre-pandemic, if you compare the number of movies that we came up with — 1,500 films — this is nothing compared to the US and China. We can only increase the pie if we have more screens, and we have full support of all our stakeholders. The film fraternity is an exceedingly important stakeholder for us, and we want their movies to come and play in our cinemas. There’s no intention of doing anything by coming together to spoil that equation.

How will your expansion go ahead as a merged entity? How will it change?
 

Pre-pandemic, both companies were adding about 60 to 80 screens per annum. That would not only continue but we're going to increase that. We do hope to at least touch 200 screens a year. India has only 9,500 screens compared to China’s 70,000. As a country, we were adding only about 400 screens a year, whereas China was adding about 6,000-7,000. We are so under penetrated. We hope this partnership and this merger really enthuses more people and enthuses the cinema exhibition industry to continue their investments. This is because the larger the cinema industry grows, we’re going to empower and encourage more content creators.

How long will the merger process take?

About six to nine months.

Will the merged entity look at more acquisitions?
 

Smaller towns also have smaller malls and shopping centres coming. We need to be forward looking. There are a lot of single screens, which are converting into two and three plexes. We are not averse to growing in any format. And wherever there’s an opportunity, we would love to do it organically.