Shares of foodtech giant Zomato rose by 2.7% to reach INR 267 on the BSE in early trading today, up from the previous close of INR 259.95.
However, the stocks later lost some of their gains and were trading at INR 259.15 at 11:56 AM.
The rise in the stock price followed Paytm‘s announcement of a definitive agreement to sell its entertainment ticketing business to the foodtech giant for INR 2,048 crore in an all-cash deal.
Continue Exploring: Paytm to sell entertainment ticketing business to Zomato for INR 2,048 Cr in all-cash deal
Zomato announced that its board approved the acquisition of Paytm’s movie and events ticketing businesses during a meeting on Wednesday.
The foodtech giant stated that the acquisition is a key component of its broader strategy to expand its “going-out business.” This move coincides with Zomato’s plans to launch a new app, ‘District,’ aimed at further growing its going-out sector.
Zomato has established a 90-day timeframe for completing the deal.
Deal Includes Subsidiaries and Employees:
As part of the deal, Paytm will transfer its movie ticketing business to its subsidiary Orbgen Technologies Pvt Ltd (OTPL) and its sports and events ticketing business to its wholly-owned subsidiary Wasteland Entertainment Private Ltd (WEPL).
Following this, Zomato will acquire a 100% stake in both subsidiaries (OTPL and WEPL) and assume full ownership of them. As part of the transaction, approximately 280 employees from Paytm’s entertainment ticketing business will join Zomato.
In the financial year 2023-24 (FY24), Paytm’s ticketing business reported a gross order value (GOV) exceeding INR 2,000 crore, reflecting a 29% year-on-year growth. The platform enabled the purchase of 78 million tickets by over 10 million unique customers.
The business generated revenue of INR 297 crore and an adjusted EBITDA of INR 29 crore during the year.
Zomato expects its going-out business to reach INR 10,000 crore in Gross Order Value (GOV) by the end of FY26, marking the first full year after acquiring Paytm’s entertainment ticketing business. Zomato founder and CEO Deepinder Goyal noted that achieving significant additional growth will depend on the company’s ability to create new use cases, such as shopping and travel.
͏͏͏C͏o͏͏͏n͏t͏i͏nu͏e ͏E͏͏xplo͏ring͏:͏͏ ͏Zomato ͏t͏o͏ ͏i͏ntroduc͏e n͏͏e͏͏w͏ ͏‘D͏͏is͏͏tric͏t’ ͏ap͏͏p f͏or ͏͏go͏͏͏i͏n͏͏g͏-o͏͏͏u͏͏͏t ͏͏b͏u͏͏s͏͏i͏n͏es͏s͏
Goyal also noted that the going-out business is expected to stay “near break-even” on an adjusted EBITDA basis. However, in the medium-to-long term, he envisions the business potentially achieving a 4-5% adjusted EBITDA margin as a percentage of GOV, provided that its plans are “executed effectively.”
