Shares of Inox Leisure and PVR on Monday jumped sharply after the leading film exhibition players announced a merger to create the largest multiplex chain in the country.

Inox Leisure shares jumped 11.33 per cent to settle at Rs 522.90 apiece on the BSE. During the day, it zoomed 19.99 per cent to its 52-week high of Rs 563.60.

PVR also gained 3.06 per cent to settle at Rs 1,883.50 on the BSE. During the day, it rallied 9.99 per cent to its 52-week high of Rs 2,010.35.

On Sunday, PVR and Inox Leisure announced the merger to create the largest multiplex chain in the country with a network of more than 1,500 screens.

The announcement came at a time when the film exhibition industry has been impacted by the COVID-19 pandemic and there is significant pressure on the theatrical business from the accelerated growth of digital OTT platforms.

The combined entity will be named PVR INOX Ltd with the branding of existing screens to continue as PVR and INOX, respectively. New cinemas opened post the merger will be branded as PVR INOX.

As per the agreement, Inox will merge with PVR in a share swap ratio of 3 shares of PVR for every 10 shares of Inox.