Zomato Shares Rally 2.7% On Ticketing Biz Deal

Shares of foodtech giant Zomato jumped 2.7% to touch INR 267 on BSE during early trading hours today (August 22), compared to its previous close at INR 259.95.

However, later the stocks shed some gains and were trading at INR 259.15 at 11:56 AM.

The surge in stock price came a day after Paytm signed a definitive agreement to sell its entertainment ticketing business to the foodtech major in an INR 2,048 Cr all-cash deal.

Zomato said that its board at a meeting on Wednesday (August 21) approved the acquisition of Paytm’s movie and events ticketing businesses.

The foodtech major said that the acquisition is part of its larger strategy to scale up the “going-out business”. This comes at a time when Zomato plans to launch a separate app ‘District’ to scale up its going-out business.

Zomato has set a 90-day timeline for the execution of the deal.

Under the deal, Paytm will transfer its movie ticketing business to its subsidiary Orbgen Technologies Pvt Ltd (OTPL) and its sports and events ticketing business to another wholly-owned subsidiary Wasteland Entertainment Private Ltd (WEPL).

Afterwards, Zomato will acquire 100% stake in the two subsidiaries (OTPL and WEPL) and will take over the ownership of the two entities. As part of the transaction, nearly 280 employees from Paytm’s entertainment ticketing business will now join Zomato.

Paytm’s ticketing business had a gross order value (GOV) of INR 2,000+ Cr (29% YoY growth) in the financial year 2023-24 (FY24). It facilitated the purchase of 78 Mn tickets by 10 Mn+ unique customers.

The business generated revenue of INR 297 Cr and an adjusted EBITDA of INR 29 Cr during the year.

Zomato anticipates its going-out business to generate INR 10,000 Cr in Gross Order Value (GOV) by the end of FY26, which will be the first full year following its acquisition of Paytm’s entertainment ticketing business. Zomato founder and CEO Deepinder Goyal mentioned that any significant further growth would hinge on the company’s ability to develop new use cases, such as shopping and travel.

Goyal also indicated that the going-out business is expected to remain “near break-even” on an adjusted EBITDA basis. In the medium-to-long term, however, he envisions the business potentially achieving a 4-5% adjusted EBITDA margin as a percentage of GOV, provided that its plans are “executed well.”