Paytm shares zoom 5% on plan to sell entertainment ticketing business to Zomato

Shortly after the trading commenced, Paytm was trading at ₹604.7 apiece on the NSE, up 5.3% as against the last closing price. Within a few minutes, the shares pared much of the gains and were valued at ₹586.9 apiece at 9:23 am, still up 2.24%.

The food delivery aggregator informed the bourses on Wednesday, August 21, that it will enter into an agreement with One97 Communications Ltd (OCL), the parent entity of Paytm, to acquire its entertainment ticketing business.

As part of the transaction, Zomato will acquire Wasteland Entertainment Pvt Ltd (WEPL) and Orbgen Technologies Pvt (OTPL) -- the two wholly-owned subsidiaries of Paytm that run its entertainment ticketing business -- for ₹2,048 crore.

The development was confirmed by Paytm in a press release. As part of the agreement, OCL will sell its "100% stake in its subsidiaries OTPL and WEPL, which operate the TicketNew and Insider platforms, respectively to Zomato", it said.

The transfer will also include around 280 existing employees from the entertainment ticketing business, the release added.

The acquisition will be completed within 90 days from the signing of the share purchase and sale agreement, Zomato noted. Paytm, however, clarified that the ticketing of movies, sports, and events, will be available on its app during a transition period of up to 12 months.

Focus on core business

Paytm said its move to sell its entertainment ticketing business underscores its core focus on payments and financial services distribution.

In recent quarters, the company has also expanded its offerings in insurance, equity broking, and wealth distribution, with significant opportunity to cross-sell these services and grow its market presence as a financial services distribution player.

"We built the entertainment ticketing business by addressing the market needs of the time. Today, as it transitions to Zomato ownership, we thank every team member who contributed to building this business. It has been a privilege to grow this business with an incredible team. This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders," a Paytm spokesperson said.