GFL LIMITED holds 16.16% in PVR-Inox Merger

GFL LIMITED holds 16.16% in PVR-Inox Merger


  • GFL Limited operates as a holding company of its wholly owned subsidiary INOX Infrastructure Limited. 
  • It holds investments in PVR INOX Limited, one of the country’s prominent multiplex chains. 
  • Additionally, the Company is actively involved in the business of Mutual Fund distribution. 
  • This integrated structure allows GFL Limited to leverage the strengths and resources of its subsidiary company, INOX Infrastructure Limited while maintaining a significant presence in the entertainment industry through its investments in PVR INOX Limited. 
  • Furthermore, the Company’s engagement in the Mutual Fund distribution business adds another dimension to its diversified portfolio, enabling it to cater to a wider range of financial services.
  • in the FY 2022-23, the Company had received 1,58,35,940 fully paid-up equity shares of PVR INOX Limited, which represented 16.16% of its total paidup equity capital. 
  • In view of power of GFL Limited to participate in the financial and operating policy decisions of PVR INOX Limited, it is concluded that GFL Limited has significant influence over PVR INOX Limited and hence investment in PVR INOX Limited is classified as an associate.

Video https://youtu.be/gdHGVTi-vxw 

  • I spend a lot of time on finding bets that have huge potential and largely depend upon a situation of a theme if that plays out well --- How much it can benefit
  • Many analysts believe the merged entity of PVR INOX would have higher pricing power on the revenue front and higher bargaining power on the costs front
    • The merged entity, the largest multiplex chain stands to be the biggest beneficiary
    • The synergies would result in robust free cash flows which bode well for GFL as it is shareholder in the merge entity
  • GFL is a holding company. So dividends constitute a large chunk of its revenues ( currently no revenue!!!)
    • Due to this, there is a lot of uncertainty around the cash flow. And markets don't like uncertainty with regards to earnings. This is accounted for in the share price.
  • Industry level notes:
    • As far as the number of screens is concerned, India lags behind other countries. The country has around 9,500 screens compared to 40,000 screens in the US and 70,000 screens in China
    • Another interesting fact is that the industry has been consolidating for the last few years. The single-screen cinemas have been losing their market share to multiplexes
    • The pandemic has only accelerated this trend
    • Indians love watching movies. On the supply side, India produces more movies per year than any other country in the world

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Whatsapp: 7838491131

SEBI registered RA : Rounaq Bakshi
Waheguru

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