Paytm shares increased by 5% after its parent firm, One97 Communications Ltd (OCL), agreed to sell its entertainment ticketing business to Zomato for ₹2,048 crore. Paytm’s decision represents a strategic shift as it refocuses on its core activities of payments and financial services distribution.
According to a press statement made on August 21, 2024, OCL would sell its whole share in two subsidiaries: Orbgen Technologies Pvt Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), which run the TicketNew and Insider platforms, respectively. The transaction, which will involve the transfer of around 280 personnel from Paytm’s entertainment ticketing section, is scheduled to be finalised within 90 days of signing the share purchase and sale agreement. However, movie, sports, and event ticketing services will be available on the Paytm app for up to a year throughout the changeover.
Shortly after the markets opened on August 22, Paytm’s stock soared to ₹604.7 per share on the NSE, marking a 5.3% increase from the previous closing price. Although the stock later moderated to ₹586.9 per share by 9:23 am. Meanwhile, Zomato’s shares also saw a brief uptick, reaching ₹267 per share before settling at ₹262.46, up 0.93% from the last session’s close.
This transaction demonstrates Paytm’s continued commitment to concentrate on its core business divisions. Paytm has recently expanded its presence in financial services, including insurance, equities broking, and wealth distribution. The firm sees this shift as an opportunity to strengthen its market position as a financial services distributor while also producing value for its stakeholders.
“We built the entertainment ticketing business by addressing the market needs of the time. Today, as it transitions to Zomato ownership, we thank every team member who contributed to building this business. It has been an honour to create our company with such an excellent staff. This move enables us to continue focussing on long-term development in our core areas and creating value for all stakeholders,” a Paytm spokeswoman said.
The merger with Zomato represents a strategic shift for both firms, with Paytm focussing on financial services and Zomato moving into the entertainment industry.
