August 22, 2024
New Delhi, India
Paytm Shares
Paytm’s parent entity, One97 Communications Ltd (OCL), witnessed a significant surge in its share price, rising by 5% on Thursday, August 21, after announcing the sale of its entertainment ticketing business to Zomato for ₹2,048 crore. This strategic move aligns with Paytm’s focus on its core financial services and payments business.
Market Reaction: Shortly after the market opened, Paytm shares soared to ₹604.7 apiece on the NSE, reflecting a 5.3% increase from the previous closing price. However, the stock quickly pared gains, trading at ₹586.9 by 9:23 AM, still up 2.24%. Similarly, Zomato’s shares hit a high of ₹267 per share, marking a 2.3% gain before settling at ₹262.46, up 0.93% from the previous close.
The Deal: The transaction will see Zomato acquire Wasteland Entertainment Pvt Ltd (WEPL) and Orbgen Technologies Pvt Ltd (OTPL), two wholly-owned subsidiaries of Paytm, which operate the TicketNew and Insider platforms. This deal is set to be completed within 90 days from the signing of the share purchase and sale agreement. As part of the transfer, around 280 employees from the ticketing business will join Zomato.
Paytm’s Strategic Focus: Paytm’s decision to divest its entertainment ticketing business highlights the company’s strategy to concentrate on its core areas, such as payments, financial services, and wealth distribution. In recent quarters, Paytm has expanded into insurance, equity broking, and wealth distribution, with the potential to cross-sell these services and enhance its market presence.
A Paytm spokesperson remarked, “This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders. We thank every team member who contributed to building this business.”
Zomato’s Position: Zomato’s acquisition of Paytm’s entertainment ticketing business adds a new dimension to its portfolio, complementing its stable food delivery business and the potential of Blinkit.
Paytm’s strategic sale of its entertainment ticketing business to Zomato marks a significant step in its journey to become a more focused financial services company. The market’s positive reaction to the announcement reflects investor confidence in this direction. As the transaction progresses, both companies are expected to benefit from their sharpened focus and expanded capabilities.
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