PVR acquires DT Cinemas of DLF

Several rumors are floating across the pertinent industry and some of them too are uncouth sermons that state DLF, largest real estate developer in the realm of India, is on the wane. Well, the real reason is not yet but it’s a reality that DLF has sold its cinema business, DT Cinemas, to theatre operator PVR. It has been learnt that the deal has taken place against Rs 22 crore in cash and 2.56 million equity shares of PVR, or 10% stake on fully diluted basis. What is more, as indicated by the agreement, PVR will be the sole multiplex anchor tenant for all existing and future retail malls of the developer.

It is to be noted that DT Cinemas does contain a portfolio of 29 screens, of which 26 screens are currently operational in various locations in North India.

Before we do proceed any further, let’s focus on the existing situation more explicitly. At the moment, DT Cinemas are spread all over in Delhi, Gurgaon and Chandigarh exclusively in DLF malls, which would help PVR gain entry into money-spinning estates at reasonable leases. It has also been learnt that both the companies are awaiting to save on synergies as it is set that PVR would gain on the existing infrastructure at key locations for a faster ramp-up, while DLF would save on costs such as operational expenses such as staff cost and annual maintenance, etc.

“The partnership with PVR allows us to focus on our core business of real estate while ensuring the highest quality of entertainment being offered to the retail customers is commensurate with DLF standards,” Pia Singh, who is heading DLF’s entertainment venture, said in a statement.

The DLF Group, is India’s largest real estate company in terms of revenues, earnings, market capitalization and developable area. It has a 62-year track record of sustained growth, customer satisfaction, and innovation. The group has over 231 msf of completed development and 423 msf of planned projects, and has pan India presence across 32 cities.

DLF’s primary business is development of residential, commercial and retail properties. The company has a unique business model with earnings arising from development and rentals. Its exposure across businesses, segments and geographies, mitigates any down-cycles in the market. DLF has also forayed into the infrastructure, SEZ and hotel businesses.