Today, the share of PVR reached Rs 2004 with a rise of 10 per cent, while INOX Leisure gained 20 per cent and it reached a price of Rs 564.
In today’s business, multiplex chain operators PVR and INOX Leisure have seen great growth. Both the stocks touched their new 1-year high in intraday trading. The stock of PVR reached Rs 2004 with a gain of 10 per cent today, while INOX Leisure gained 20 per cent and it reached Rs 564. In fact, both the companies have announced merger among themselves. When the new screen is launched, it will be named PVR INOX. It is believed that this will strengthen the business of both the companies. The brokerage house is anticipating further rise in these stocks, from which they are advising investment.
Business will be strong by getting more screen
Brokerage house CLSA has termed the INOX-PVR merger as a positive move and advised to invest in both the stocks. The brokerage house says that this merger may take 6 months, although it is subject of approval. After the merger, the business of the company will get stronger. OTT will reduce the risk. The risk is less for OTT platforms as compared to multiplexes in India.
At the same time, brokerage house JM Financial has also advised to invest in the shares of both. The brokerage expects that the stock of PVR may further reach a price of Rs 2300 by March 2023. Whereas the stock of INOX can show a price of Rs 690. In terms of current prices, INOX is likely to rise by 47 per cent and PVR by 28 per cent.
OTT platform challenge now
Brokerage house Motilal Oswal has given a neutral rating on the stock of PVR with a target of Rs 1600. The brokerage says that the company’s business will be strengthened by increasing the screen. Although OTT platforms will remain a challenge. The brokerage believes that the valuation of the stock is high, due to which there is not much scope for upside in the near term.
what is the matter
The big news from the multiplex industry is that there will be a merger between PVR and INOX. This deal will be completed through share swap. Instead of 10 of INOX, you will get 3 shares of PVR. The name of the new company will be PVR INOX. After the merger, both PVR and INOX will be the promoters. PVR will hold 10.62 per cent and INOX will hold 16.66 per cent. After the merger, both PVR and INOX will have 2-2 seats in the board. After this merger, both will have more than 1500 screens across the country. Currently screen names will remain with their old names. When the new screen is launched, it will be named PVR INOX.
Why was the decision of merger taken?
After the merger, both the companies said in a joint statement that due to the OTT platform, we have to face a big challenge. But after the merger, we will be able to give a better experience to the audience in the coming time in Tier-2 and Tier-3 cities as well. Ajay Bijli will be the managing director of the joint entity, while Sanjeev Kumar will be the executive director. Inox Group’s current chairman Pawan Kumar Jain will be the non-executive chairman of the new entity.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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