(Bloomberg) — Paytm is in talks to sell its movie and ticketing business to Zomato Ltd., as the Indian fintech pioneer seeks to offload non-core assets and revive sales hurt by a regulatory crackdown.
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The fintech company is considering a possible transfer of its entertainment business, but has not yet signed any binding agreement, said the company officially known as One97 Communications Ltd. Zomato acknowledged in a separate statement that it is in discussions with Paytm for such an agreement, to boost what he called his “exit” business.
Discussions between Paytm and online food delivery company Zomato are at advanced stages, although there are other suitors for the deal, Bloomberg News previously reported. Shares of the two companies were not traded on Monday, during an Indian national holiday.
What Bloomberg Intelligence says
Paytm’s potential sale of its events and cinema ticketing businesses to Zomato would allow the fintech company to focus on its core payments service as it launches promotional campaigns to acquire new users and reactivate previous customers affected by its closed banking arm. A deal could boost margin for food delivery company Zomato in the long term, as ticketing assets – valued at Rs 20 billion – would be part of a segment comprising less than 2% of adjusted sales for the year. fiscal year 2024.
– Nathan Naidu, Analyst
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Paytm, run by billionaire founder and CEO Vijay Shekhar Sharma, last month reported its first sales decline on record and promised to cut non-core assets. It also warned of job cuts, reflecting the fallout from regulatory action on Paytm Payments Bank Ltd., which restricted much of the fintech’s business and forced it to establish new partnerships with lenders.
Paytm does not control the bank but relied on it for digital wallets and payment traffic before the central bank’s decision earlier this year.
Paytm does not release independent figures from its movie and event ticketing arm. It reported annual sales of 17.4 billion rupees ($208 million) in the fiscal year to March 2024 in its marketing services business, which includes films and events as well as credit card and gift card marketing.
The sale, if successful, will allow Paytm to focus on travel, business and cashback – businesses that are important for broadening its merchant base and increasing its own sales.
“As noted in our earnings call, our focus will be on financial and payment services along with digital goods commerce, which are designed to help our merchants grow their businesses,” Paytm said in the statement.
The purchase could help Zomato expand its digital business into a new high-growth area. In 2020, it acquired Uber Technologies Inc.’s food business in India.
(Updates to add Paytm and Zomato disclosures from second paragraph)
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