Zomato Buys Paytm's Entertainment Ticketing Businesses, Insider and TicketNew, For Rs 2,048 Crore
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.
According to Paytm, the deal works towards 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 company's entertainment ticketing business, including movies, sports, and events, will remain available on the Paytm app during a transition period of up to 12 months, One 97 Communications said in a separate statement.
Paytm's Insider, which includes movies and events business, lags far behind market leader BookMyShow in the movie ticketing segment.
Current Financial Position
Orbgen Technologies Pvt Ltd, which operates Ticketnew—the movie ticketing business—has an authorised share capital of Rs 25 crore. Wasteland Entertainment Pvt Ltd, which operates Paytm Insider, has an authorised share capital of Rs 12.5 lakh, according to the details provided on the stock exchanges.
Orbgen Technologies had reserves and cash surplus of Rs 11.97 crore, while Wasteland Entertainment's stood at Rs 4.7 crore, Paytm said in its latest annual report.
Wasteland's annual turnover as of March 31 was higher at Rs 263 crore, compared with Orbgen Technologies' Rs 13.14 crore. The Insider operator had assets and liabilities worth Rs 218.27 crore and Rs 213.49 crore respectively. In comparison, Ticketnew's operator had assets and liabilities worth Rs 24.97 crore and Rs 12 crore respectively.
For Zomato, the deal means pulling out roughly Rs 2,050 crore from its cash balance of roughly Rs 12,000 crore, according to its latest annual report. Zomato's acquisition of Insider also bolsters its going-out business, which it recently housed under a separate app called District.
Impact On Business Operations
Approximately 280 employees will join Zomato, and Orbgen Technologies and Wasteland Entertainment will become wholly-owned subsidiaries. The acquisition expands Zomato's going-out business across multiple platforms.
The District app will duplicate these offerings before transitioning customers to the new platform. Kotak Mahindra Capital acted as Zomato's financial advisor, confirming the valuation is fair.
Zomato expects the going-out business to remain near break-even in the near term but potentially deliver a 4-5% Adjusted Ebitda margin in the medium-to-long term, with the gross order value exceeding Rs 10,000 crore in the financial year-ending March 2026.
Shares of Zomato closed 1.2% lower at Rs 259.95 apiece on Bombay Stock Exchange on Wednesday, while shares of One 97 Communications closed 0.4% higher at Rs 574.90 apiece. That compared with 0.1% gains in the country's benchmark BSE Sensex.
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