As you may know, the discussions are still on in this matter and therefore no final decision has been arrived at. There are other business interested parties for Paytm also.
This deal will assist Zomato to grow the “going out” segment and Paytm will continue with its main focus on digital payments.
Paytm is selling as it addresses the RBI crackdown on its payments bank arm and posts its first quarterly drop since its Q4 FY24 listing.
Food delivery major Zomato and Paytm have said to be in talks for Paytm’s movie ticketing and events business.
As per an ET report, the talks have shifted to a $200 Mn-$250 Mn ($210 Mn = INR 1,500 Cr) ask for Paytm Movies and Paytm Insider.
A source privy to the development said, “Paytm Movies and Paytm Insider are now merging to have integrated teams, the plan is to make a new entity. Zomato has been eyeing this segment for some time now.”
Bloomberg also said that Paytm is in discussion with Zomato to sell its movie and events ticketing business. This is part of Paytm’s “rebound plan” because of falling sales according to the article. Bloomberg has reported that talks are still being held and there is no certainty of the outcome. Other interested buyers are also added to the mix.
Zomato has reportedly been in discussion with Paytm for the acquisition of its Entertainment business, although Paytm has not commented on the talks it has had with Zomato but said it is mulling over the sale of its Entertainment business.
Paytm in a filing with the BSE said, “The Company constantly looks for opportunities that can help in creating value for its shareholders. The proposed divestment of Paytm’s Entertainment business, which is a part of our Marketing Services segment, is one of such possibilities.
They also said “However, the current discussions are exploratory and do not involve any definitive transaction that would necessitate compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 or other applicable laws. Thus, the information regarding such discussions is more in the realm of speculation at this time.
This transaction would enable Zomato to add more strings to its bow and grow its “going out” segment. At the moment, Zomato has the service of ticket selling for events and hosts an annual food festival known as Zomaland.
On the other hand, this deal will enable Paytm to concentrate on its core areas of digital payments and increase its merchant base and sales.
For perspective, Paytm’s core digital payments and financial services distribution businesses generated operating revenues of INR 7,990 Cr in the fiscal year 2022-23 (FY23).
For FY 23, Paytm Movie has an operating revenue of 976 Cr whereas Wasteland Entertainment which is the parent company of Paytm Insider has a revenue of 192.7 Cr. This means that the movie and events ticketing business contributed about 13% of Paytm’s revenue in the year ending March 2023.
Zomato’s attempt to acquire Paytm comes at the heels of BookMyShow which is said to have raised funds at a valuation of INR 7,500 Cr. The second major player in online ticketing after BookMyShow, Paytm quickly grew by absorbing Insider. in 2017 and TicketNew in 2018. Nevertheless, Paytm is selling its ticketing division to concentrate on digital payments because of RBI restrictions. The company has reported a decline in revenues and higher losses in the Q4 FY24, therefore the 33.11% decline in its stock this year.
What is your reaction?
