NEW DELHI: Fintech major Paytm is selling its entertainment ticketing business to Zomato for Rs 2,048 crore. With this, the food tech giant will compete against Reliance-backed BookMyShow.
The entertainment ticketing services, including movies, sports, and events, will remain available on the Paytm app during a transition period of up to 12 months.
"One 97 Communications Limited (OCL)...today announced, that it has entered into definitive agreements for the sale of its entertainment ticketing business that includes movies, sports and events (live performances) ticketing to Zomato Limited," said One 97 Communications (OCL), the parent company of Paytm, in a regulatory filing on Wednesday.
OCL added that this deal, valued at 2,048 crores on a cash-free, debt-free basis, stands as a testament to the value Paytm has created through its entertainment ticketing business.
As part of this agreement, OCL will transfer its entertainment ticketing business to Zomato by 1) Transfer of OCL's entertainment ticketing business to its 100 per cent subsidiaries, Orbgen Technologies Pvt Limited (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), and 2) Selling 100 per cent stake in its subsidiaries OTPL and WEPL, which operate the TicketNew and Insider platforms, respectively to Zomato. The transfer will also include 280 existing employees from the entertainment ticketing business.
Paytm spokesperson said, "We built the entertainment ticketing business by addressing the market needs of the time. Today, as it transitions to Zomato ownership, we thank every team member who contributed to building this business. It has been a privilege to grow this business with an incredible team. This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders."
Paytm built its movie ticketing business in-house and acquired Insider and TicketNew for Rs 268 crore between 2017 and 2018. This segment’s revenue came at Rs 297 crores and Adjusted EBITDA of 729 crores in FY24.
Paytm said that its move to sell its entertainment ticketing business underscores its core focus on payments and financial services distribution. The company claims that in recent quarters, the company has also expanded its offerings in insurance, equity broking, and wealth distribution, with a significant opportunity to cross-sell these services and grow its market presence as a leading financial services distribution player.
Meanwhile, founder Vijay Shekhar Sharma told shareholders that Paytm will refocus on delivering a “long-term, sustainable and profitable business model.” He stated that after resolving many of the challenges that they faced, they are now refocused on their path to deliver a long-term, sustainable and profitable business model.
He also highlighted that the last financial year was one of the most important learning experiences for the company. In January, the Reserve Bank of India (RBI) placed severe restrictions on Paytm Payments Bank citing ‘persistent non-compliance’.
Paytm last month reported a 35 per cent fall in its operational revenue for the quarter ended June at Rs 1,501 crore, down from Rs 2,341 crore a year back. The company’s net loss more than doubled to Rs 840 crore from around Rs 358 crore a year back.