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Warburg Pincus invests $120 mn in PVR; Multiples PE partially exits

20 January, 2017

Private equity firm Warburg Pincus said on Wednesday its affiliates have acquired a 14% stake in PVR Ltd, India’s largest multiplex chain, for about Rs 820 crore ($120.4 million).

The stake is being acquired from private equity firm Multiples Alternate Asset Management and PVR’s promoters, Warburg Pincus said in a statement. Multiples will retain a 14% stake in PVR and the promoters will remain the company’s largest shareholders with a stake of more than 20%.

Multiples PE and its limited partners, or investors in its funds, likely sold around a 9% stake while the promoters divested almost a 5% stake in the transaction for Rs 294 crore.

“The Indian 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,” said Ajay Bijli, chairman and managing director at PVR.

Explaining the reason for its investment in PVR, Vishal Mahadevia, managing director and co-head at Warburg Pincus India Pvt Ltd, said the Indian film and entertainment market is expanding rapidly.

This is Warburg Pincus’ first investment in India’s media and entertainment sector in India. The PE firm made a couple of large bets on Indian companies last year; it invested $75 million in logistics startup Rivigo in November and $125 million in another logistics startup Stellar Value Chain Solutions Pvt Ltd in August.

The three investments came after Warburg Pincus, which invests in India out of its global funds, raised a $12 billion global fund in November 2015.

Multiples PE and PVR

Renuka Ramnath, the founder of Multiples PE, first invested in PVR in 2002 when the company had only 12 cinema exhibition screens.

At the time, Ramnath was the CEO of ICICI Venture and the PE firm had invested Rs 38 crore to back PVR’s expansion.

PVR has grown manifold since then, in part via acquisitions fuelled by multiple rounds of capital raise. And Ramnath has backed the firm on numerous occasions. 

After founding Multiples PE, she invested in PVR again in 2013 along with L Capital to fund the acquisition of Cinemax.  

In June 2015, Multiples PE and Canadian and Dutch pension funds together invested $58.3 million in PVR for the acquisition of DT Cinemas.

However, in 2014, Multiples PE booked a profit by selling a third of its stake in PVR.

PVR currently has 562 multiplex screens across 48 cities in India. In 2015-16, PVR reported revenue of Rs 1,743 crore and has a market capitalisation of Rs 6,094 crore. PVR shares jumped 5% on Wednesday to close at Rs 1,303 in a flat Mumbai market.

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Warburg Pincus invests $120 mn in PVR; Multiples PE partially exits

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