Shares of One 97 Communications Ltd (Paytm) and Zomato Ltd are in focus today after Paytm agreed to sell its entertainment ticketing business to Zomato for Rs 2,048 crore cash in a bid to focus more on its core payments and financial services distribution.
In a filing to stock exchanges, Paytm said it entered into definitive agreements for the sale of its entertainment ticketing business that includes movies, sports and events (live performances) ticketing to Zomato. A total of 280 Paytm employees will move to Zomato.
During a transition period of up to 12 months, the movie and event tickets will continue to be available on the Paytm app, as well as on the TicketNew and Insider platforms, ensuring a smooth and uninterrupted experience for users and merchant partners, Paytm said. The transaction is expected to close within this quarter, subject to satisfactory completion of all closing conditions.
Paytm had acquired TicketNew and Insider for total consideration of Rs 268 crore from 2017 to 2018. It made additional investments to scale up the business. In FY24, the entertainment ticketing business reported revenues of Rs 297 crore and adjusted Ebitda of Rs 29 crore. Zomato is acquiring the business at 1 times trailing Enterprise value/FY24 GOV multiple, which it believes is fair vis-a-vis relative valuations of other comparable companies.
"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," Paytm said.
In FY24, the business acquired generated a combined gross merchandise value (GOV) of Rs 2,000 crore, up 29 per cent YoY, by enabling purchase of 78 million tickets by 10 million unique customers.
"This is not really an absolutely new business for us as we have already been doing ticketing as a business for more than a year now and have been eyeing building more use-cases for that business. Just to recap, our going-out business (which includes dining-out and event ticketing) did Rs 3,225 crore of GOV in FY24 growing at 136% YoY. It never gets spoken about much given all the attention food delivery and quick commerce get but this is already a profitable and large business for us," Zomato said.
Zomato said it would be launching a new app District anytime in the next few weeks.