INOX is planning to expand its multiplex base by buying out Debt ridden Fame India. Fame India is currently having a debt of 80 crores with market capitalization of 134 crores.
The company has been currently valued at 101 crores much below its market cap purely because it has quite a lot of debt on its balance sheet.
INOX will also go after buying additional 7% from market which will bring up its stake to controlling 51%. This is really a win-win for INOX as it is looking at expanding its multiplex base through-out INdia.
The number of cinema halls under INOX’s fold would go up to 204 (including Fame’s 95) from the current 108. Anil Ambani’s BIG Cinemas leads the pack of multiplexes with 242, followed by PVR Cinemas with 134 screens (including DT Cinemas’ screen acquisition). (source)
This deal would help INOX increase its presence in Western India, specially in Mumbai, where it has just one property. It has enjoyed strong presence in the eastern region. Considering INOX’s turnover of Rs 226 crore as on March 2009 and Fame’s of Rs 110 crore, it should emerge a strong competitor to the leader. PVR’s turnover as on March 2009 was Rs 305.3 crore.
You will see a lot more of INOX rather than Fame from now on :)
