Zomato to acquire Paytm's ticketing unit for Rs 2,048 crore

Zomato has made a major move to enlarge its business by obtaining Paytm Insider, the entertainment and events ticketing branch of One 97 Communications Limited (OCL), for Rs 2,048.4 crore. Approved by Zomato's board, this accession will allow the food delivery company to enter the entertainment ticketing sector, complementing its existing dining and food delivery services.

In a regulatory filing on Wednesday, Zomato outlined its agreement to enter into a Share Purchase and Subscription Agreement (SPSA) with OCL, Wasteland Entertainment Private Limited (WEPL), and Orbgen Technologies Private Limited (OTPL) to finalize the transaction.

The intricate transaction involves OCL transferring its movie, sports, and events ticketing businesses to its subsidiaries OTPL and WEPL through a slump sale. OCL will subsequently inject capital into these subsidiaries via preferential allotment, using the proceeds to settle the slump sale payment. Meanwhile, Zomato will acquire OCL’s entire stake in both OTPL and WEPL, thereby making them fully owned subsidiaries of Zomato.

The acquisition is expected to be completed within 90 days of signing the SPSA, with OTPL’s value set at Rs 1,264.6 crore and WEPL’s at Rs 783.8 crore.

By entering the entertainment ticketing sector, Zomato seeks to further diversify its portfolio and strengthen its “Going-out” business, a crucial growth area for the platform.

OTPL, operational since 2007, specializes in movie ticket listings and had a turnover of Rs 13.14 crore as of March 31, 2024. WEPL, active since 2015, focuses on event ticketing and reported a turnover of Rs 236.03 crore for the same period.

This acquisition follows reports from June, when Zomato first expressed interest in buying Paytm’s movies and events businesses. The company then indicated that such a move would enhance its “going-out” segment and align with its strategy to focus on its four core areas.

Zomato’s entry into the ticketing market complements the launch of ‘District,’ a new app designed to unify its “going-out” offerings. Founder and CEO Deepinder Goyal commented, “We see an opportunity to expand our going-out services, building on our dining-out business. This includes additional customer experiences like movies, sports ticketing, live performances, shopping, and staycations.”

This deal represents a significant new phase for Zomato, integrating food and entertainment into a cohesive experience and solidifying its position in India’s dynamic consumer market.