Market Insight

PVR Cinemas makes another acquisition after the Cinemax deal

June 16, 2015  | Subscribers Only

Xin Zhang Xin Zhang Senior Research Analyst, Cinema, IHS Markit
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Indian exhibitor PVR Cinemas is to acquire DT Cinemas from its owner DLF for about RS500 crore ($77.8m). DT currently operates 36 screens across nine locations in the National Capital Region (NCR) and Chandigarh. Controlled by Ajay Bijli, PVR Cinemas is the largest operator in India by screen count with 467 screens in 105 sites across 43 cities.  The acquisition will boost PVR’s screen count to 114 sites and 503 screens.

PVR also acquired Cinemax in 2013, and fully integrated the circuit under PVR brand in 2015.

Our analysis:

The Indian theatrical market is quite active recently. The PVR and DT deal is the fourth acquisition in the past 12 months.  In July 2014, Inox acquired Satyam for about Rs182 crore ($28.3m), which strengthened its presence in North India and also moving closer to catching up with the market leader PVR Cinemas. In late 2014, Carnival Films acquired Big Cinemas from Reliance Group for a reported total of Rs700 crore ($109.0m), making it a leading player in the market with over 300 screens. Mexican cinema giant Cinepolis acquired Fun Cinemas from Essel Group in January 2015, making it the fourth largest operator in India at the time. After the acquisitions, the Indian cinema exhibition market is now significantly more concentrated although from a low base. The top five exhibitors now have a market share of 13.2% of the market by screen count, compared to less than 10% before those acquisitions.

More aggressive expansion plans are on the way, and these could be a combination of M&A and organic growth. Cinepolis plans to reach 400 screens in India by 2017, which is more than double its current size. Inox also expects to add a further 156 screens in the next two years. It opened 3 new cinemas with 10 screens in the first quarter of 2015, and has another 10 sites upcoming. Carnival Cinemas also states it is in talks to acquire 175 screens from three separate multiplex operators. In the next 12 months, DT Cinemas (now PVR) had proposed to add 10 screens at two properties in the NCR. The battle among the top cinema operators in India is not over yet.


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