Furthermore, the rating on the Rs145cr NCDs has been withdrawn as the instruments have been fully repaid. CRISIL has received confirmation of no dues pending against these NCDs. The withdrawal is in line with CRISIL Ratings' policy on the withdrawal of NCDs.
In its rating rationale, CRISIL said that the rating action reflects CRISIL Ratings’ expectation of weakening of PVR’s business risk profile over the medium term. Prolonged restriction on operations both in terms of time and capacity along with the delayed opening of key states such as Maharashtra has led to deferment in the release of Hindi content impacting the overall footfalls.
"While cinema halls have been allowed to open in majority of the states across the country, but they are operating at varied levels of restriction in terms of both time and capacity. Since Hindi content has been limited therefore regional and English movie releases have supported the operations so far," CRISIL added.
Further, CRISIL highlighted that PVR has undertaken steps to reduce cost and augment liquidity over the past 18 months. After the second wave of Covid-19, it has been successful in negotiating with the majority of mall owners, wherever operations have been resumed, for waiving off rentals for the entire closure period along with revenue sharing arrangements or lower guaranteed payments from the second quarter of fiscal 2022 onwards. Besides, the company has also conserved cash by reducing its workforce and deferring maintenance outlay and capital expenditure (CAPEX).
PVR mentioned that the ratings continue to reflect the company’s strong market position and established brand, healthy operating efficiency before the pandemic, strong financial risk profile and ample liquidity. These strengths are partially offset by exposure to risks inherent in the film exhibition business.
On Sensex, PVR finished at Rs1517 per piece down 3.2%.