We have all used BookMyShow at some point in our lives. For years, it’s been the go-to platform for movie tickets and event bookings in India. But things might be getting interesting with Zomato entering the scene.
Food delivery giant Zomato and Paytm are discussing a deal in which Zomato may acquire Paytm’s movie ticketing and events business, which could significantly impact the online entertainment ticketing landscape.
This potential deal has sparked many questions. Let’s break down the key points and consider what it might mean for companies and consumers.
Zomato in Talks, Stocks Take a Ride
The news sparked after Zomato officially acknowledged discussions with Paytm regarding the acquisition. This confirmation came after reports of negotiations for a deal valued at around ₹1,500 crore surfaced.
The news of Zomato’s acquisition discussions sent ripples through the stock market. Zomato’s shares reacted positively, climbing 1.5% to reach a high of ₹189. Paytm’s shares saw a more significant jump, gaining 4.05% to hit ₹442.15. While the reasons for the increase can’t be definitively confirmed, it’s possible that investors viewed the potential deal favorably for both companies.
Why Does This Deal Matter?
Paytm Insider is a bigger fish than Zomato Live, boasting over 3.5 times the revenue in FY23. This could be because Paytm Insider offers various events, including sports, theatre, and workshops. Paytm also has TicketNew, an online movie ticketing platform, which Zomato currently lacks.
The potential deal value of ₹1,500-2,000 crore translates to a valuation of 5-7 times Paytm’s movie and events business’ FY24 sales. This suggests Zomato is willing to pay a premium to gain a foothold in this market.
Paytm’s Move Aligns with Strategic Focus
While the deal is still under discussion, Paytm has confirmed they are in early talks with Zomato. This potential sale aligns with Paytm’s strategy of focusing on its core business areas – payments, financial services, and digital goods commerce – which directly support merchant growth.
Paytm’s Potential Gains
This potential sale could benefit Paytm financially. While Paytm doesn’t disclose separate figures for its movie and events business, it reported ₹17.4 billion in total sales for its broader marketing services segment (including credit card marketing and gift vouchers) in FY24. Selling the movie and ticketing business could provide Paytm with a cash infusion, allowing it to re-energize its marketing efforts in its core areas.
Strengthening Zomato’s “Going-Out” Business
The food delivery giant has been clear about expanding beyond food delivery. This acquisition could give their “Going-Out” segment, which includes Zomato Live (think event discovery and ticketing), a major boost.
Paytm Insider, a platform under Paytm, offers similar services to Zomato Live. By combining forces, Zomato could become a much stronger player in the events and movie ticketing space, potentially challenging BookMyShow’s dominance.
A Super App in the Making?
Zomato has hinted at spinning its “Going-Out” business into a separate app. This acquisition, if finalized, could fuel that ambition. A single app offering food delivery, restaurant reservations, event discovery, and ticketing? That’s a powerful combination that could significantly change how Indian consumers interact with these services.
What it means for the companies?
The deal is still in its early stages, and there’s no guarantee it will be finalized. However, the potential implications are significant. If it goes through, we could see Zomato emerge as a major player in the online ticketing space, challenging BookMyShow’s dominance.
Paytm’s financial health could see a boost if the deal goes through. The proceeds from selling the movie and ticketing business could be used to revitalize marketing campaigns in their core areas, but it’s important to consider how effectively those funds will be utilized.
What it means to the consumers?
This could mean a more competitive landscape for consumers with potentially more choices and better deals. However, it’s important to wait and see how the deal unfolds and its impact on the market.
The Final Word
While the deal is still under discussion, it holds significant implications for the online ticketing landscape in India. If finalized, it could strengthen Zomato’s “Going-out” segment and potentially elevate it to the number two position in online ticketing.
Paytm benefits financially and strategically by focusing on its core business areas. We’ll have to wait and see how this potential acquisition unfolds and how it impacts both companies and the broader online ticketing market. One thing’s for sure: the online ticketing space in India is about to get more interesting.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.