Categories Analysis, Consumer, Research Summary

All that you need to know about GFL Ltd

About the company:

GFL Limited is a Holding Company of INOX Leisure Limited and INOX Infrastructure Limited. GFL Limited has retained its investment in INOX Leisure Limited, one of the country’s leading multiplex chains. The Company is also engaged in the business of Mutual Fund distribution.


The Company historically has been called Gujarat Fluorochemicals Limited and this Company has been engaged in the business of the manufacturing of chemicals. In addition to the chemical business, GFL also started carrying on some other businesses through its investments in two listed and one unlisted entity. 

The company held a 51% stake in INOX Leisure Limited which is engaged in operating a national chain of Multiplex Cinema Theatres. It also had a 57% stake in INOX Wind Limited which is engaged in the business of providing turnkey wind energy solutions to its customers who are primarily IPPs. It further held 100% stake in INOX Renewable Limited which is engaged in the business of generation of electricity through renewable sources.

The company demerged its chemical business into a separate listed entity named as ‘Gujarat Fluorochemicals Limited‘. Post de-merger the name of this Company was changed from Gujarat Fluorochemicals Limited to GFL Limited (Parent Company) and the name of the mirror image company, to which the chemicals business was transferred, was called Gujarat Fluorochemicals Limited (Spun off company).

In FY21, there was another restructuring plan executed by the company. Since, GFL did not have any operations of its own but it owned 2 major businesses through its subsidiaries. It owned the entertainment business through 51% stake in INOX Leisure Limited and the renewable energy business through 57% stake in INOX Wind Limited and 100% stake in INOX Renewables Limited. Now the Board of Directors, as a part of the business restructuring program approved a Scheme which comprises essentially of two parts:

Part A: It was the amalgamation of the wholly owned subsidiary INOX Renewable Limited into GFL and the appointed date for this was 1st April 2020.

Part B was the de-merger of the entire renewable energy business which essentially comprised of the undertaking of IRL which would be merged in GFL and the equity shares that GFL owns in IWL, into a separate company, a mirror image company, called INOX Wind Energy Limited, or

IWEL, which would be formed essentially for the purpose of vesting the renewable energy business.

IWEL is the mirror image company of GFL and therefore instead of owning a share in GFL, which owns both the wind business and the leisure business, the Shareholders will end up owning shares of equivalent proportion in GFL which now owns just the entertainment business and IWEL which owns the renewable energy business. Today, IWEL is a separately listed company.


The Company has an investment of Rs. 7 Cr. in Limited Liability Partnership with Nexome Realty LLP. In FY22, Nexome Realty LLP, an associate of INOX Infrastructure Limited (Subsidiary of GFL Limited) ceased to be associate w.e.f. 31st August, 2021.

Further, the group faced a loss of INR 666.32 lakhs for the year ended 31 March 2022 on account of discontinuance of equity method on retirement.

Operational merge with PVR:

Badly bruised by the COVID pandemic and the growing appeal of alternative OTT platforms, India’s leading multiplex operators Inox Leisure and PVR Ltd decided to merge operations to create the largest multiplex chain in the country in March 2022.

The joint entity was branded as PVR INOX, with the branding of existing screens to continue as PVR and INOX respectively. In all, it operates 1,546 screens across 341 properties in 109 cities. While Inox operates 675 screens across 160 properties in 72 cities and PVR has 871 screens across 181 properties in 73 cities. 

Post-merger, the promoters of INOX became co-promoters in the merged entity along with PVR’s promoters. INOX promoters hold 16.66 per cent stake while PVR promoters hold 10.62 per cent stake in the combined entity. Post the merger, INOX shareholders received three shares of PVR for 10 shares of INOX. 

Operational Data:

The company earns majority of its revenue from box office collection followed by the foods and beverages provided at the theatres. The figure value of revenue from box office collection has certainly declined as it accounted for 71% in FY21 vs 61.6% in FY22. Meanwhile the foods and beverages revenue has stagnated from the previous financial year. 

Interestingly, there is no single external customer who has contributed more than 10% to the Group’s revenue for both FY 2021-2022 and FY 2020-2021.

The Group is operating most of its multiplexes under operating lease. These arrangements generally are for an initial period of 9-29 years with a minimum lock-in period of 5-15 years, after which the lessor does not have a right to terminate the arrangement. The agreements provide for escalation after pre-determined periods. Some of the agreements are fully or partially on a revenue share basis. The Group does not have an option to purchase the leased premises at the expiry of lease period.

The company reported the revenue of INR 375 crores for the second quarter of FY23 but diligently it too reported a loss of INR 40 crores. The company has been recording losses since quite a few quarters and this is on account of increased interest costs. The company plans to go debt free in the nearby future and with this happening the company will be able to generate an improvised bottomline. Though the revenue has increased by more than 600% on a yearly basis and this has been made possible due to opening of theatres across the country. The net profit of the company has also increased by 57% on the yearly basis.

Industry Overview:

The film entertainment industry has seen considerable development despite lockdowns and other restrictions on production and exhibition across states. The film industry grew by 28%, although it is still half of what it was pre pandemic. In 2021, despite capacity limits throughout the year, more than 750 films were released, compared to just 441 in 2020.

Industry results in 2021 revealed a continuous public demand in blockbuster features as the country gained speed during the unlocking, aided in part by the release of effective vaccines. Domestic theatricals increased by 57%. The year saw record breaking footfall and occupancy levels at the theatres, similar to those seen in pre-COVID days. A solid slate of long-awaited tentpole films is likely to assist in the comeback of theatre attendance in the coming months.

In 2022, the Media and Entertainment industry is expected to grow by 17% to INR 1.89 Trillion, and then rise at a CAGR of 11% to INR 2.32 trillion by 2025. The industry has a lot of space for growth because of increased money and changing lifestyles. Digital media, films, and television will be the primary drivers of this expansion, followed by animation and visual effects, and online gaming. The Film industry is expected to have positive growth as the theatres opened up in 2021 and the audiences returned in record numbers. The industry is expected to recover its 2019 levels by the end of 2023. Theatres would evolve into experience zones offering multi-sensory content experiences

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