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Paytm to sell ticketing business to Zomato for Rs 2,048 croreThe transfer will also include about 280 existing employees from the entertainment ticketing business.
Anushree Pratap
Last Updated IST
<div class="paragraphs"><p>Logo of Paytm is seen in this image.</p></div>

Logo of Paytm is seen in this image.

Credit: Reuters File Photo

Bengaluru: One 97 Communications Limited (OCL), parent company of payments and financial services distribution company Paytm, announced on Wednesday that it has entered into definitive agreements for the sale of its entertainment ticketing business that includes movies, sports and events (live performances) ticketing to Zomato Limited. This deal is valued at Rs 2,048 crore on a cash-free, debt-free basis. 

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As part of this agreement, OCL will transfer its entertainment ticketing business to Zomato by first transferring this business to its 100 per cent subsidiaries, Orbgen Technologies Pvt Limited (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), and second, selling 100 per cent stake in its subsidiaries OTPL and WEPL, which operate the TicketNew and Insider platforms, respectively to Zomato. 

The transfer will also include about 280 existing employees from the entertainment ticketing business.

The transaction value is subject to cash and net working capital adjustments at closing, while transaction closure is subject to satisfaction of agreed conditions precedent.

Paytm had acquired TicketNew and Insider for a total consideration of Rs 268 crore between 2017 and 2018. Additional investments were also made to scale up the business. The entertainment ticketing business had revenues of Rs 297 crore (excluding intercompany eliminations) and adjusted EBITDA of Rs 29 crores in FY24. The company expects to substitute revenue from its entertainment ticketing business by expanding core business areas of payments and financial service distribution. 

Paytm spokesperson said, "We built the entertainment ticketing business by addressing the market needs of the time. This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders."

Deloitte Touche Tohmatsu India LLP provided transaction advisory and valuation, while Morgan Stanley assisted Paytm with fairness opinion on the transaction. Luthra & Luthra acted as legal counsel to Paytm on the transaction. The transaction is expected to close within this quarter, subject to the satisfactory completion of all closing conditions.

It has been a tumultuous year for Paytm, since RBI came down on Paytm Payments Bank in February, stopping it from accepting deposits or offering credit to customer accounts and digital wallets. The operations of the payments bank were found to be in violation of the Prevention of Money Laundering Act.  The Finance Ministry’s Financial Intelligence Unit had also imposed a fine on the bank of Rs 5.49 crore.

Following this, Paytm founder Vijay Shekhar Sharma pulled out as non-executive chairman and board member of Paytm Payments Bank. RBI’s limitations also effectively stopped recharges by users into FASTags issued by Paytm Payments Bank.

From April to June this year (Q1 FY25), One97 Communications’ loss widened to Rs 840.1 crore, up from its Rs 358.4 crore loss in Q1 FY24. The company’s Q1FY24 revenue from operations hit a low of Rs 1,502 crore, down 36 per cent YoY.

During a transition period (up to 12 months), the movie and event tickets will continue to be available on the Paytm app, as well as on the TicketNew and Insider platforms.

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(Published 21 August 2024, 21:15 IST)