PVR Ltd has held conversations with various investors in recent weeks as India’s largest multiplex operator looks to raise around $100 million through a qualified institutional placement (QIP) offering, said two people aware of the development.
“PVR has appointed investment banks Kotak Mahindra Capital and CLSA to manage the fundraising process. They have held domestic road shows to meet investors and they are likely to launch the offering soon, if market conditions are supportive for a trade. The company plans to use the funds for various purposes, including pursuit of inorganic growth," said the first person cited above, requesting anonymity.
On 21 December, PVR’s board had approved raising up to ₹750 crore through an issuance of equity shares via multiple routes, including a QIP.
QIP is a capital-raising tool through which listed companies can sell shares, fully and partly convertible debentures, or any securities other than warrants that are convertible into stocks, to a qualified institutional buyer.
The resolution has received approval from its shareholders, the company informed stock exchanges on 30 January. Stock exchange filings by PVR show that it held meeting with various institutional investors on 5 and 6 February, while towards the end of January, it met investors in Singapore and Hong Kong.
PVR and CLSA declined to comment on the development. An email sent to Kotak Mahindra Capital did not elicit any response till press time.
PVR operates 748 screens across 161 locations in 64 cities as on 23 January, according to its latest investor presentation. It claims to have a 32% market share of Hollywood box office and 22% share of Bollywood box office in the year ended 31 March.
For the nine months ended 31 December, PVR reported revenue of ₹2,272.5 crore, a jump of 28% over the revenue recorded in the same period last year. Between April and December 2018, it reported profit of ₹141.62 crore, up 44% from the corresponding period of the last financial year.
PVR has focused on inorganic growth and has grown to its current leadership position on the back of several strategic acquisitions.
Last year, it had acquired a majority stake in South India-based multiplex chain SPI Cinemas, which operated 76 screens across 17 properties in 10 cities under brands such as Sathyam, Escape, The Cinema and S2 Cinema, for ₹633 crore in an all-cash deal.
Last August, The Economic Times reported that the company is also in talks to acquire North India’s Wave Cinemas, which could fetch a price tag of ₹450 crore.
In 2016, it acquired 32 screens from real estate developer DLF, which operated under the DT Cinemas, for around ₹433 crore. In 2012, it acquired Mumbai-based Cinemax Ltd for ₹395 crore.