Paytm shares drop 3% amid talks with Zomato to sell movie ticketing business

Shares of One 97 Communications, the parent entity of Paytm, dropped over 3% during the trading session on Tuesday. The decline comes amid the company’s ongoing talks with food delivery giant Zomato over the potential sale of its movie ticketing business.

During intraday trading, Paytm shares dropped as low as ₹411 apiece on the NSE, down 3.31% as against the last closing price. The stock partially recovered as the trading session progressed. At 2:58 pm, the scrip was valued at ₹417.3, still down 1.82% as against the previous close.

Meanwhile, Zomato was trading 0.84% higher at ₹187.8 per share on the NSE at 3:03 pm.

In a regulatory filing on June 17, Paytm confirmed to the bourses that it was in “preliminary” discussions with Zomato over the transfer of its entertainment business.

“The company routinely explores various strategic opportunities aimed at enhancing shareholder value. The potential transfer of Paytm’s entertainment business, a component of our marketing services, is one opportunity under consideration. As noted in our earnings call, our focus will be on payment and financial services along with digital goods commerce, which are designed to help our merchants scale their businesses,” it said.

“However, any discussions currently underway are preliminary,” Paytm added.

Zomato also shared an update with the exchanges on June 16, noting that the company is in discussion with Paytm over the possibility of acquiring the latter’s movie ticketing business.

“We acknowledge that we are in discussions with Paytm for the aforementioned transaction, however, no binding decision has been taken at this stage that would warrant a Board approval and subsequent disclosure in accordance with applicable law,” the company said.

The development comes in the backdrop of the turbulent period faced by Paytm, following the Reserve Bank of India (RBI) action against its banking arm for violation of norms. The Paytm Payments Bank Ltd was barred from accepting deposits or top-ups from March onwards.

The RBI action led to the hammering of One 97 Communications’ stock, which has slipped by 35.4% in 2024 so far.