Warburg invests ₹820 cr in PVR

NEW DELHI: Private equity firm Warburg Pincus has bought a 14% stake in PVR Ltd, India’s largest multiplex chain, for ₹820 crore, through an open market transaction, the PE firm said in a statement.

Warburg Pincus bought the stake from existing investor Multiples Alternate Asset Management, which sold 9%, and the promoters of PVR, including chairman and MD Ajay Bijli. The sale values the company at around ₹5,860 crore.

Following the transaction, Renuka Ramnath-owned Multiples will retain a 14% stake in PVR through its units. The company’s promoters will remain the largest shareholders with a 20% stake, Warburg said in a statement. The promoters of PVR held 25.25% in the company as of December 31, 2016.

Shares of PVR surged 5.05% to ₹1,303.90 on the Bombay Stock Exchange after the announcement. The multiplex chain has a market cap of ₹6,046 crore.

Multiples PE had invested around ₹153 crore in 2012 to buy a 15.8% stake in PVR. Canada Pension Plan Investment Board (CPPIB), Dutch pension fund manager PGGM and CDC are among the other investors in the multiplex chain.

“The Indian multiplex industry is at the next level of growth, driven by consumer demand and experience, convenience and technology,” said Bijli.

PVR currently operates 562 screens across 122 properties in 48 cities in India.

Box office revenue in India stood at an estimated $1.64 billion in 2015, and will rise to $2.74 billion in 2020, according to a report by consulting firm PwC.