Paytm experienced a notable boost in its share prices on August 21, following the announcement of a significant deal with Zomato. The news of Paytm’s decision to sell its entertainment ticketing business to Zomato led to a 5% increase in its share value.
Increase in Share Prices
On August 21, Paytm’s shares traded at INR 604.7 each on the National Stock Exchange (NSE), reflecting a 5.3% increase from the previous closing price. According to online investment platform Upstox, within minutes of the announcement, the shares were valued at INR 586.9 each, maintaining a 2.24% rise.
In contrast, Zomato’s shares also saw a positive movement, reaching INR 267 per share shortly after the market opened. This represented a 2.3% gain compared to the last closing price.
Details of the Deal
The deal between Paytm and Zomato is valued at INR 2048 crore. Zomato is set to acquire Paytm’s entertainment ticketing arm, including its subsidiaries Wasteland Entertainment Pvt Ltd (WEPL) and Orbgen Technologies Pvt Ltd (OTPL). This acquisition will be formalized through an agreement with Paytm’s parent company, One97 Communications Ltd (OCL).
Impact of the Transaction
As part of the deal, Paytm will transfer its entire stake in OTPL and WEPL to Zomato. This also includes the management of TicketNew and Insider, which are currently part of Paytm’s entertainment-ticketing segment. Approximately 280 Paytm employees from this division will be moving to Zomato as part of the acquisition.
Transition Period and Access to Services
The transaction is expected to be completed within 90 days from the signing of the sale and purchase agreement. However, Paytm has assured that access to its ticketing platform will remain available on its app during a transition phase. This transition could extend up to a year, ensuring a smooth handover of services.
The positive reaction in Paytm’s share prices following the Zomato deal highlights investor confidence in the strategic move. By selling its entertainment ticketing business, Paytm is focusing on its core operations while Zomato expands its offerings in the entertainment sector. This partnership marks a significant shift for both companies and is expected to influence their market positions in the coming months.
