Paytm shares surged over 5%, and Zomato shares gained 2% following Zomato Paytm deal in which Paytm’s announcement to sell its entertainment and ticketing business to Zomato for ₹2,048 crore. The deal allows Paytm’s movie and event tickets to remain on its app during a 12-month transition period.
After the transition, users will be redirected to Zomato’s new app focused on the ‘going-out’ segment. Paytm’s decision to divest from this business aligns with its strategy to concentrate on its core payment and financial services. This move marks a significant shift in Paytm’s business focus.
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The deal values Paytm’s entertainment ticketing business at 6.9 times its FY24 revenue, compared to an earlier proposed deal for BookMyShow at 7.7 times FY23 revenue. This valuation reflects a competitive but slightly lower multiple than the previous deal.
Despite the stock price reaction, proforma estimates suggest that the net value addition or change in Paytm’s target price due to this deal could be only ₹25 per share. This is notably lower than the surge seen in Paytm’s stock price following the announcement.
At 9:25 am, Paytm shares traded 2.58% higher at ₹587.90, reflecting market optimism following the sale of its entertainment and ticketing business to Zomato. Zomato shares also gained 1.06%, reaching ₹262.70 on the BSE, showing positive investor sentiment around the deal.
