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Warburg Pincus has acquired a stake of about 14 percent in PVR Limited, India’s largest cinema chain, for about $120 million (8.2 billion rupees).
The U.S. private equity firm said it bought the stake from New Delhi-based PVR’s existing investors, which include Indian private equity firm Multiples Alternate Asset Management and PVR’s founders, including chairman and managing director Ajay Bijli. According to a statement, PVR’s founders, including Bijli, will remain the largest group of shareholders with a stake of more than 20 percent. Multiples now owns a 14 percent stake in PVR.
Bijli said in a statement that India’s multiplex industry “is at a cusp of rapid transformation and at the next level of growth driven by consumer demand and experience, convenience and technology.” He pointed out that with Warburg Pincus as an investor, PVR will “continue to accelerate our long-term development and expansion.”
“The Indian film and entertainment market is expanding rapidly and we look forward to supporting Ajay and the entire management team during the next phase of growth,” added Warburg Pincus India managing director and co-head Vishal Mahadevia.
As a pioneer in India’s theatrical landscape, PVR was established as a joint venture with Australia’s Village Roadshow, which exited in 2002, opening the country’s first multiplex in 1997 in the capital of New Delhi. Since then, the company has been on an expansion spree and currently operates a cinema circuit of 562 screens in 48 cities.
PVR became India’s largest cinema chain in 2015 when it acquired a controlling stake in Mumbai-based rival Cinemax for about $58 million (3.95 billion rupees), which was operating 138 screens.
According to a recent report by consultancy PricewaterhouseCoopers, box-office revenue in India is estimated to reach $2.74 billion in 2020, up from $1.64 billion in 2015, growing at an average annual rate of 10.9 percent. However, India still remains a market with low screen penetration with an estimated total count of about 9,500, including about 1,780 multiplex screens.
According to a recent report by KPMG India, India’s screen penetration stands at 6 screens per a million people, versus 23 screens per million in China and 126 screens per million in the U.S. India’s theatrical market is dominated by local players, with Mexico’s Cinepolis being the only foreign-owned company in this segment, operating 265 screens.
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