Here's How Much Zomato Is Valued At After The Paytm Deal

Zomato said on Wednesday that it will acquire the entertainment, sports, and events ticketing business—Insider and TicketNew—from Paytm operator One 97 Communications Ltd. for Rs 2,048 crore.

The two companies had earlier acknowledged that they were in talks for a deal for Insider and that a potential sale of Paytm's entertainment vertical was on the cards.

Here's how much Zomato is valued after the Paytm deal.

Valuations

According to Paytm's disclosures, the two companies part of this slump sale—Orbgen Technologies Pvt., which operates Ticketnew and Wasteland Entertainment Pvt., which operates Insider—have a combined revenue of Rs 297 crore and Rs 29 crore in adjusted Ebitda in the fiscal ended March 2024. 

This pegs the deal valuation at roughly seven times the revenue and over 70 times its adjusted Ebitda.

Paytm's Road Ahead

According to Paytm, the deal aligns with Paytm's focus on core payments and financial services distribution. "The transaction generates significant profits for Paytm and further strengthens its balance sheet," it said.

The deal brings much-needed cash to Paytm's balance sheet, which currently has a cash balance of Rs 4,277 crore. Zomato, with a significantly improved cash-at-hand position of approximately Rs 12,000 crore, is leveraging this to expand Blinkit's dark stores and its third largest consumer-facing app, District.

For Paytm, this deal signals cutting flabs and focussing on core payments and financials businesses. TicketNew and Insider together could not beat incumbent leader BookMyShow's roughly 85% market share, and thus moving out of the segment makes sense for the Vijay Shekhar Sharma company.

The transfer will also include 280 existing employees from the entertainment ticketing business moving to Zomato, which removes a substantial salary chunk from Paytm's balance sheet.

Revenue Impact

For Zomato, the entertainment ticketing business is not new, and the company's Zomato Live and IPs like Zomaland have been in play for at least 3–4 years. The live events business is already a mature one for Zomato, having reached a gross order value of Rs 3,225 crore in fiscal 2024.

By fiscal 2026, with the acquisitions, the aim is to take the number to Rs 10,000 crore, Deepinder Goyal wrote in a shareholders' letter. "Any further step change in scale here will depend on our ability to build newer use-cases like shopping, staycations (travel), etc.," he said, indicating that District could be a super app for entertainment purposes.

For Paytm, the deal means an additional Rs 2,050 crore to its balance sheet, alongside a roughly Rs 300 crore annual revenue hit. This is clearly in line with the company's aim to conserve cash. Paytm had earlier moved to a distribution-only model for its insurance and loan businesses. It had also approved the withdrawal of its application with the Insurance Regulatory and Development Authority for registering as a general insurance company.

It had cited the business as being "capital-intensive" and said the move would free up Rs 950 crore, which was earmarked for investment in Paytm General Insurance Ltd.