Jeff Bezos is looking to diversify Amazon India’s entertainment business with eyes on acquiring multiple film and media distribution players, including Mumbai-based movie theatre chain Inox Leisure, The Indian Express reported. With pandemic hitting businesses such as multiplex chains hard with repeated lockdowns and social distancing norms, Amazon India is looking to pick up a stake in some businesses helped by deep pockets of the world’s richest person. The Indian Express report said that Inox Leisure is one of the several candidates that Amazon is looking at for its diversification exercise.
Although Amazon has been operating its over-the-top (OTT) content business in India since 2016, the pace of growth has not been what was expected by the company. After the initial growth of the first six months last year, its OTT service Amazon Prime has not grown as expected, the report said. “There are three to four deals in this space being evaluated currently, including some distressed assets. Amazon India is in advanced talks with some of them,” the report quoted unidentified sources as saying.
The publicly traded Inox Leisure has been reporting losses consecutively since the pandemic began last year. In the January-March quarter, Inox Leisure reported a revenue of 90 crore, down 75% from the previous year, attributed to lack of content. The company reported a net loss of Rs 93.7 crore. Analysts at ICICI Direct expect the company to report a loss of Rs 235 crore this fiscal year, helped by an expected fall in revenue.
Amazon India had invested $1.5 billion in its Indian business just before the pandemic, bulk of which was pumped into the e-commerce business. The report said that a major deal by Amazon in the entertainment space could see Jeff Bezos’ company increase its focus on this side of the business and away from e-commerce. Amazon has been facing policy changes in e-commerce and unyielding challenges from Mukesh Ambani’s Reliance Retail and Walmart-backed Flipkart. Amazon had earlier held discussions with US-based movie theatre chain AMC for acquiring a stake but talks did not bear fruit.
Inox Leisure, one of the largest movie theatre chains in the country with 153 multiplexes and 648 screens. Most of the company’s screens are in the western part of the country, followed by North, South, and East. As of June 30, Inox Leisure’s promoters held 43.63% stake, while 56.23% is public-owned.
On Monday Inox Leisure’s share price gained 1.7% to end at Rs 302.5 apiece. Inox share price has gained 5.46% so far this year. The company’s market cap stands at Rs 3,705 crore.
UPDATE: Inox Leisure clarification to stock exchanges
We would like to inform you as under:
1. There are no discussions taking place between ‘INOX Leisure Limited’ and ‘Amazon’, nor were there any such discussions in the past.
2. Under the circumstances, the abovementioned news item published on various platforms of Indian Express dated 27th July, 2021, is factually incorrect.