Paytm in talks with Zomato to sell its movie and ticketing business

Paytm is in talks with Zomato to sell its movie and events ticketing division amid declining sales. Paytm plans to streamline non-core assets and establish new partnerships in response to regulatory actions affecting Paytm Payments Bank.

Shivangini
Updated16 Jun 2024, 05:56 PM IST
Paytm plans to streamline non-core assets and establish new partnerships in response to regulatory actions affecting Paytm Payments Bank
Paytm plans to streamline non-core assets and establish new partnerships in response to regulatory actions affecting Paytm Payments Bank

Paytm is currently in discussions with Zomato Ltd. to sell its movie and events ticketing division, as part of a strategic overhaul amid declining sales, according to sources familiar with the situation, as per Bloomberg report.

Also Read | Paytm hands pink slip to employees after RBI ban on Paytm Payments Bank services

In response to circulating news reports, Zomato has issued a voluntary disclosure clarifying its position regarding the rumored acquisition of Paytm’s movies and ticketing business. The company acknowledges ongoing discussions with Paytm but emphasizes that no binding decision has been made that would necessitate Board approval or official disclosure under applicable laws.

Zomato said, “We have noticed that there are certain news articles circulating in the mainstream media with the subject 'Zomato in talks to acquire Paytm’s movies, ticketing business'. This voluntary disclosure is being made to clarify our stance on the matter, given that any transaction that is considered potentially meaningful may create uncertainty in the market. 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,” in an exchange filing.

The negotiations between One97 Communications Ltd., the parent company of Paytm, and the online food delivery giant Zomato are reportedly in advanced stages. However, other potential buyers are also interested in the business, the sources noted, requesting anonymity due to the private nature of the talks. No final decision has been reached yet, they added, as per the Bloomberg report.

Also Read | Paytm share price jumps 30% in one week. More steam left?

In light of its first-ever sales decline reported last month, Paytm, led by billionaire founder-CEO Vijay Shekhar Sharma, announced plans to streamline non-core assets and hinted at possible job cuts. This move comes in response to regulatory actions affecting Paytm Payments Bank Ltd., which had been a significant component of Paytm's operations. The regulatory measures have compelled Paytm to establish new partnerships with other lenders, the report added.

Also Read | Paytm employees allege forced resignations, no severance pay, informal processes 

Paytm, which previously depended heavily on the bank for digital wallets and payment transactions, has faced significant operational challenges since the central bank's intervention earlier this year.

Neither Paytm nor Zomato provided comments when approached outside of regular business hours, as per Bloomberg.

While Paytm does not separately disclose figures for its movie and events ticketing business, it recorded annual sales of 17.4 billion rupees ($208 million) in the fiscal year ending March 2024 for its broader marketing services segment, which includes this business along with credit card marketing and gift vouchers.

A successful sale would enable Paytm to concentrate on travel, deals, and cashback, sectors crucial for expanding its merchant base and boosting overall sales.

For Zomato, acquiring Paytm's movie and events ticketing business could mark a significant expansion into a new, rapidly growing digital sector. In 2020, Zomato acquired Uber Technologies Inc.'s India food unit, further strengthening its market position.

(With Inputs from Bloomberg)

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First Published:16 Jun 2024, 05:56 PM IST
HomeCompaniesPaytm in talks with Zomato to sell its movie and ticketing business

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