CRISIL Ratings has downgraded its ratings on the bank facilities and debt programmes of PVR Limited (PVR) to 'CRISIL A+/CRISIL PP-MLD A+r/Negative/CRISIL A1'.from 'CRISIL AA-/CRISIL PPMLD AA-r/Negative/CRISIL A1+' CRISIL Ratings has assigned its 'CRISIL PP-MLD A+r/Negative' rating to the Rs.250 crore long-term principal-protected market-linked debentures.
Furthermore, the rating on the Rs 145 crore NCDs has been withdrawn as the instruments have been fully repaid. CRISIL Ratings has received confirmation of no dues pending against these NCDs. The withdrawal is in line with CRISIL Ratings' policy on withdrawal of NCDs.
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 delayed opening of key states such as Maharashtra has led to deferment in 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 level 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.
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 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 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).
In August 2020 and February 2021, the company raised Rs 300 crore (rights issue) and Rs 800 crore (qualified institutional placement [QIP]), respectively, which augmented liquidity. Cash and bank balance, undrawn committed bank lines and other liquid investments stood at above Rs 570 crore as on August 31, 2021.
Improvement in the current situation, leading to return of content, relaxation in restrictions in key states and ramp-up in occupancies, while operators continue to contain operating costs and maintain liquidity, will remain a key monitorable.
The ratings continue to reflect the company's strong market position and established brand, healthy operating efficiency prior to the pandemic, strong financial risk profile and ample liquidity. These strengths are partially offset by exposure to risks inherent in the film exhibition business.
Shares of PVR Ltd. was last trading in BSE at Rs. 1567.5 as compared to the previous close of Rs. 1568.5. The total number of shares traded during the day was 137431 in over 7276 trades.
The stock hit an intraday high of Rs. 1610 and intraday low of 1552.1. The net turnover during the day was Rs. 216367264.