Shares of One 97 Communications Ltd (Paytm) and Zomato Ltd are in the spotlight today after Paytm decided to sell its entertainment ticketing business to Zomato for Rs 2,048 crore in cash in order to focus on its core payments and financial services delivery.
Paytm said in a stock exchange filing that it has reached formal agreements to sell its entertainment ticketing business, which includes movie, sports, and event (live performance) tickets, to Zomato. A total of 280 Paytm workers will switch to Zomato.
During a 12-month transition phase, movie and event tickets will continue to be accessible on the Paytm app as well on the TicketNew and Insider platforms, delivering a seamless and uninterrupted experience for consumers and merchant partners alike. The transaction is scheduled to conclude this quarter, provided that all closing conditions are met satisfactorily.
Paytm purchased TicketNew and Insider for a total of Rs 268 crore from 2017 to 2018. It made more investments to grow the firm. In FY24, the entertainment ticketing company had sales of Rs 297 crore and adjusted Ebitda of Rs 29 crore. Zomato is paying one times the trailing Enterprise value/FY24 GOV ratio for the firm, which it feels is reasonable in light of other comparable companies' valuations.
"With a strong focus on long-term value creation, the company remains confident in substituting revenue from its entertainment ticketing business by expanding core business areas of payments and financial service distribution," according to Paytm.
In FY24, the acquired business earned a combined gross merchandise value (GOV) of Rs 2,000 crore, up 29% year on year, by facilitating the purchase of 78 million tickets by 10 million unique users.
"This is not a completely new business for us; we have been conducting tickets for more than a year and are looking to expand our use-cases. To summarize, our going-out business (which includes meals and event ticketing) generated Rs 3,225 crore in GOV in FY24, up 136% year on year. Given the attention that meal delivery and swift commerce receive, this is already a successful and substantial industry for us," Zomato stated.
Zomato said that it would introduce a new app, District, over the next several weeks.
