Deepinder Goyal’s fast-food delivery and commerce platform Zomato has disclosed that it is negotiating to purchase Paytm’s movie and ticketing division. With this possible acquisition, Zomato wants to expand its service offerings and enhance its position in the entertainment industry. The action is in line with Zomato’s plan to broaden its market reach beyond meal delivery, increase its overall revenue, and explore new revenue opportunities.
“We acknowledge that we are in discussions with Paytm for the above mentioned 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 business stated in a stock exchange filing dated 16 June.
“The above discussion is being undertaken with an intent to strengthen our Going-out business further and is in line with our stated position of focusing only on our four key businesses currently,” noted the filing.
Zomato Paytm Offer: What’s the value?
The estimated value of the deal might go as high as Rs 2,000 crore if receivables from movie theatres are included. Should the agreement proceed, it would rank among Zomato’s most significant purchases since the company acquired Uber Eats in 2020 and Blinkit (previously Grofers) for Rs 4,447 crore in an all-stock deal in 2021. This considerable investment underscores Zomato’s aggressive expansion strategy and commitment to diversifying its service offerings. Integrating Paytm’s movie and ticketing division could provide Zomato with a robust platform to capitalise on the entertainment sector, enhancing its market presence and driving new growth opportunities.
Although negotiations between the two cutting-edge IT companies are progressing and other interested parties have also expressed interest, a decision has yet to be reached. Zomato could broaden its digital services offering if the transaction goes through by entering the rapidly expanding movie and event ticket market.
Business of Marketing Services
Paytm’s marketing services section, which includes movie and event ticketing, posted remarkable sales of 17.4 billion rupees (about US$ 208 million) for the fiscal year that ended in March 2024. Despite its success, Paytm intends to sell off this business to concentrate more on its core competencies. These key categories, essential for growing its merchant base and increasing overall revenues, include cashback, promotional offers, and travel services. Paytm hopes to fortify its position in the market by focusing on these essential areas and spurring additional expansion.
Zomato Market Capitalisation
On Friday, 14 June, Zomato’s shares ended trading at Rs 186.24 on the NSE. Over a year, the stock has produced an incredible return of 151.38 percent. The stock has dropped by more than ten percent since reaching its highest point of Rs 207.20 per share.
Zomato’s target share price of Rs 300 has been established by ICICI Securities, indicating a possible upside of up to 61.08 percent over the present market price. This upbeat forecast demonstrates confidence in Zomato’s potential for growth and its performance in the market.
