One97 Communication: Paytm in Talks with Zomato to Sell Movie Ticketing Business

One97 Communications, the parent company of digital payments giant Paytm, is reportedly in talks with the food delivery and restaurant discovery platform Zomato to sell its movie and events ticketing business. This move is part of Paytm’s broader effort to streamline its operations and focus on its core financial services.

Details of the Potential Sale

The negotiations are centered around Paytm’s movie ticketing segment, which operates under the brand Paytm Movies. This division allows users to book tickets for movies, events, and other entertainment activities through the Paytm app. The proposed deal is expected to be valued at approximately $50 million, according to reports.

Financial Aspects

While specific financial terms of the potential sale have not been disclosed publicly, Paytm’s movie ticketing business has shown a strong performance. For instance, Paytm Movies reported a gross merchandise value (GMV) of Rs.400 crore ($50 million) last year. This segment’s revenue has been a considerable part of Paytm’s entertainment and commerce portfolio, although it faces stiff competition from established players like BookMyShow.

Strategic Rationale

For Zomato, acquiring Paytm’s ticketing business aligns with its strategy to diversify beyond food delivery and restaurant services. By integrating movie and event ticketing, Zomato could enhance user engagement on its platform, offering a more comprehensive suite of lifestyle services. This move could potentially drive higher user retention and provide new revenue channels for Zomato. 

Investments and Acquisitions

Reports indicated that the potential deal could value Paytm’s movies and ticketing business at approximately Rs.1,500 crore. If finalized, this acquisition would mark Zomato’s second-largest purchase, trailing behind its all-stock acquisition of quick commerce platform Blinkit in 2021, valued at Rs.4,447 crore. Zomato has also invested Rs.300 crore in Blinkit, highlighting its strategic focus on this segment expected to outgrow its core food delivery business. Additionally, Zomato plans to inject Rs.100 crore into Zomato Entertainment, its events division specializing in ticket sales for concerts, parties, and festivals.

Future Outlook

If the deal goes through, it will mark a significant shift in Paytm’s business strategy by sharpening its focus on financial technology and services. For Zomato, this acquisition could pave the way for a more diversified service portfolio, positioning it as a more integrated lifestyle app. This acquisition would not only add to Zomato’s revenue streams but also boost its competitive edge against other lifestyle service platforms.

Conclusion: In conclusion, the ongoing discussions between One97 Communications and Zomato over the sale of Paytm’s movie ticketing business represent a strategic move for both companies, aimed at optimizing their respective business models and market positions. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.