SM&A

Movie Night


Two of our largest multiplex movie cinema chains have decided to merge and become one giant company. 

PVR Limited and INOX Leisure Limited will combine to create the single biggest chain in India with over 1,500 screens across 109 cities. 

So now it's almost certain that you'll end up watching a movie at PVR.

PVR has been pretty dominant already across most of India with most moviegoers preferring them in the North, South and West.
It was the East where they weren't doing as well and were getting beaten by INOX, but now they've figured out a way around that.

The Deal

It will be an all-stock transaction, which means no cash will exchange hands.
INOX will merge into PVR to create an entity called PVR Inox Limited and the shareholders of Inox Leisure will get 3 shares for every 10 held in INOX.
Ajay Bijli, the chairman and MD of PVR will become the MD of PVR INOX.

The promoters of PVR will own a 10.6% stake in the combined entity, while INOX promoters will hold 16.7%, and both will be the co-promoters of the new company with equal representation on the board of directors.

Regulatory Approval

One thing you all may be thinking is won't this deal get flagged by our regulators considering PVR and INOX are the biggest chains we have?

The Competition Commission of India (CCI) still has to give its approval. But the numbers are pretty damning. Once merged, PVR INOX will be more than 3x larger than the nearest competitor – Cinepolis which has 417 screens.

Technically though, the merger does not require CCI approval.
It is below the limit of Rs 1,000 crore. However, that's only because the revenues of both companies have taken a huge hit due to Covid-19. So a serious case of some 'Mauke pe chauka' here.

It will be interesting to see how each stock reacts once markets open, but experts feel it might be a better deal for INOX.
We do also wonder whether the CCI buts in on this.

Markets

Plug The Leak!


Foreign investors have been selling a lot of their Indian stock holding, and outflows from India have crossed Rs 1 lakh crores this year.

This month alone, Foreign Portfolio Investors (FPIs) have sold almost Rs 50k crores worth of stocks, and it seems to be mainly because of concerns created by the Russia-Ukraine situation.

Investors fear that India could be impacted more by commodity price increases, especially crude oil, since we import a lot of it. This could impact India's currency (we've already seen weakness v.s the US$), and also corporate earnings because of higher input costs.

Markets have performed poorly so far this year, with the Nifty50 index returning around -3% since the beginning of January.

PS - Because of the fickle nature of such investors, FPI flows are often referred to as 'hot money' because they tend to run away at the very first sign of any kind of trouble in an economy, 

Tech

Ambitions And Acquisitions 


Glance's Gaming Ambitions

InMobi's Glance is making quite a few moves nowadays. Last month they raised funds from Mukesh Bhai's Reliance.
Looks like they are already putting some of that money to use.
Glance has now acquired the gaming platform Gambit Sports.

If you guys use Android phones you may have noticed how you get media content on your lock screens. That is thanks to Glance.
They use AI to offer media content, news and casual games on your lock screen. Glance has tied up with quite a few of the android phone manufacturing biggies like Samsung and Xiaomi so you don't even need to install it. It is pre-installed.

Now you notice the casual games part. That's where Gambit sports will fit in.
Gambit sports has some fantasy sports, poker, rummy and quizzing games.

Already they do get some traction for the games they offer on lock screens. By some estimates more than 45 million of their 400 million users play games on their lock screens every month.
They most likely won't get fantasy gaming from Gambit because of regulations but the rest should be available.

They've also been piloting with live game streaming on lock screens. Even that has got decent traction with 10 million users checking it out.

Because of the acquisition Glance did speak to a few media outlets where they even teased how they plan on launching NFTs in live gaming. We didn't get exact deets but clearly Glance is going to making a lot more moves.

Ola's Fintech Ambitions

Ola just announced it is acquiring Avail Finance for $50 million in a share swap deal.

Avail Finance caters primarily to blue-collar workers and offers them loans. They have set a hard cap of serving employees making a max of Rs 35k a month.

Avail Finance had raised about $38.5 million before this acquisition.

Ola itself has been making a push in the fintech space. They've been pushing Ola Financail which provides different financing options like BNPL, vehicle financing and even providing their driver partner with loans. Avail Finance should make sense particular in the latter part.

There were apprehensions about the deal though.
Avail Finance's founder is Ola's founder – Bhavish Aggarwal's brother.
There is always a case of speculation when there are such deals involved but considering Ola is still a private company there hasn't been as much drama about this.

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