A deal has been struck between One97 Communications Limited (Paytm) and Zomato Ltd. Paytm has agreed to sell its movie ticketing business to Zomato for Rs 2,048 crore in cash so that it can focus more on its payment and finance services distribution. After this news came out, Zomato’s shares were down slightly on Thursday, while Paytm’s shares were on the rise and were trading at Rs 577.
In a stock exchange filing, Paytm said it has entered into a definitive agreement to sell its entertainment ticketing business to Zomato, which includes movie, sports and event (live performance) ticketing. A total of 280 Paytm employees will move to Zomato. Paytm said movie and event tickets will be available on the Paytm app as well as TicketNew and Insider platforms for 12 months to make it easier for users and merchant participants. Paytm said the transaction is expected to be completed within this quarter.
Paytm made so much profit from ticketing business
Paytm had acquired TicketNew and Insider for a total of Rs 268 crore from 2017 to 2018. It made additional investments to grow the business. In FY24, the entertainment ticketing business has achieved revenue of Rs 297 crore and EBITDA of Rs 29 crore. Zomato is buying this business at 1 times trailing enterprise value/FY24 GOV multiple, which is considered fair in terms of valuation.
What will be left with Paytm?
Paytm’s ticketing business generates a large revenue. The company sold 78 million tickets from its ticketing business to 10 million customers in FY24, which is a growth of 29 percent year-on-year and the company generated a gross merchandise value (GOV) of Rs 2000 crore from it. Now after selling this business, Paytm will be left with businesses like payment and finance service distribution.
Paytm said that with a strong focus on generating long-term value, the company will generate revenue from its ticketing business by expanding its core business of payments and finance service distribution.
What did Zomato say on this business?
Zomato said that this is actually not a completely new business for us, as we have already been operating as a ticketing business for more than a year and are eyeing to make that business more useful. Zomato said that we generated government revenue of Rs 3,225 crore in FY 2024 with an annual growth of 136 percent from event ticketing and food. Zomato said that it will introduce the new app District in the next few weeks.