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PVR INOX shares fell more than 8% on Monday, September 7, as investors reacted to the passing of the record date for the company’s Rs. 300 crore share buyback and a media report about an internal investigation involving a former senior executive.
The stock dropped as much as 8.27% to Rs. 1,125.70 on the NSE during early trade before recovering 4%.
PVR INOX had fixed September 4 as the record date for determining shareholders eligible to participate in the buyback.
PVR INOX plans to repurchase up to 20.69 lakh equity shares at Rs. 1,450 per share through the tender-offer route. The total buyback size is up to Rs. 300 crore.
The announcement had earlier supported buying interest in the stock as investors positioned themselves ahead of the record date. However, with September 4 now behind, investors who bought shares mainly to become eligible for the offer no longer need to hold the stock. This may have contributed to selling pressure on Monday.
The Rs. 1,450 buyback price does not guarantee that every eligible shareholder can sell all their shares at that price. The company will accept only the specified number of shares under the offer.
Meanwhile, JM Financial retained its ‘ADD’ rating on PVR INOX and raised its 12-month target price to Rs. 1,270 from Rs. 1,130. The brokerage also increased its valuation multiple to 9 times EV/EBITDA from 8 times.
The decline also came after a media report said PVR INOX had conducted an internal investigation into alleged kickbacks involving a former senior executive.
The Economic Times reported that the company asked Pramod Arora, its former CEO for growth and investment, to leave in April after an internal probe. The report said alleged payments from developers involved in cinema property construction may have reached as much as Rs. 200 crore over several years.
PVR INOX has not publicly confirmed or denied the reported Rs. 200 crore amount. The figure therefore remains based on the media report and has not been independently established through a company disclosure.
Nuvama Institutional Equities, meanwhile, maintained its ‘BUY’ rating and raised its target price to Rs. 1,640 from Rs. 1,620. The brokerage expects the company to benefit from its film release pipeline during FY27.
PVR INOX reported a consolidated profit after tax attributable to owners of Rs. 56.5 crore for the June quarter of FY27. The company had posted a net loss of Rs. 54.5 crore in the same quarter a year earlier.
Revenue from operations rose 11.91% year-on-year to Rs. 1,622.20 crore from Rs. 1,449.6 crore. EBITDA increased 30.91% to Rs. 529 crore from Rs. 404 crore, while the EBITDA margin rose to 32.58% from 27.85%.
The multiplex operator is also expanding into smaller cities. On September 4, the company announced its first SMART Cinema at ICON Plaza Mall in Muzaffarpur, Bihar.
PVR INOX said, “The opening marks the first step in PVR INOX’s strategy to expand its presence across India’s emerging growth markets.”
The four-screen property has 644 seats. Following the launch, PVR INOX operates about 1,785 screens across 356 properties in 114 cities in India and Sri Lanka. The company was formed through the merger of PVR Limited and INOX Leisure Limited in 2023.
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