Market Insight

PVR continues trend of consolidation in Indian exhibition

August 22, 2018

Charlotte Jones Charlotte Jones Associate Director – Research and Analysis, Cinema, IHS Markit

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Leading Indian multiplex operator PVR has completed its acquisition of a 71.69% stake in SPI Cinemas, a chain of 17 cinemas and 76 screens in South India. The reported purchase price was $127m (INR 8.5 billion) and includes a further 13 screens to open over the next 12 months.

Following the deal, PVR will control approximately 706 screens in India, further extending its lead as the largest player in the territory. The deal is part of a wider strategy to see the PVR group hit over 1,000 screens by 2020.

 

Our analysis

The acquisition of SPI by PVR is just the latest in a slew of merger and consolidation activity in the Indian exhibition sector since 2013, led by the leading players PVR Cinemas, Carnival Group and Inox. Inox is the second largest player with 496 screens followed by Carnival Group with 470 screens. Meanwhile, Cinepolis India has also expanded to 339 screens having only launched in the market in 2009.

 

At end of 2017, only 40% of the screen base in India was d-cinema accounting for approximately 4,000 screens. Therefore, the market remains highly fragmented when taking into account even this smaller subset of d-screens, whereby the top three operators account for just 30% of this market based on end 2017 total screen figures and current operator numbers.

 

 

PVR’s aggressive expansion strategy has also recently been directed internationally with the group setting up a joint venture with Al-Futtaim to bring cinemas to Middle East territories including in both UAE, Dubai and the newly opened-up cinema market in Saudi Arabia. It also acquired a minority stake in US Luxury chain iPIC for US$4 million in 2017.

 

Carnival, meanwhile, operates eight screens in Singapore and just acquired 100% of Elan Group’s 100% stake in Novo Cinemas in the Middle East in Q3 2018. Novo has 104 screens across the region with a further 50 planned screen expansions. Carnival has grown from relative minnow building on a number of significant acquisitions led by the 2015 acquisition of Big Cinemas (the largest acquisition in the sector) and E-Square Cinemas. Carnival too has an ambitious target of 1,000 screens by 2022.

 

Alongside local opportunities, Indian operators are therefore increasingly seeking international opportunities, although this is a more recent development and one that reflects their growing influence, size and market stature.

 

PVR has approximately tripled its screen count since 2013 (256) and was first to hit the 500 screen milestone in early 2016. The Indian market is therefore primed for further activity as all three of the top operators continue their growth strategy through to 2022. Alongside, acquisitions, however, the top operators are also focused on high levels of new screen growth.

 

 

Geography
India Singapore UAE USA
Organization
Cinepolis PVR Cinemas
Research by Market
Media & Advertising
Category
Cinema
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