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Paytm in talks to sell movie ticketing business

Tan KW
Publish date: Tue, 18 Jun 2024, 08:23 AM
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NEW DELHI: Paytm is in talks to sell its movie and ticketing business to Zomato Ltd, as the Indian financial technology pioneer seeks to unload non-core assets and revive sales hurt by a regulatory crackdown.

The fintech firm is considering a potential transfer of its entertainment business but has yet to enter into any binding agreements, the company officially known as One97 Communications Ltd, said in a stock exchange filing on Sunday.

Zomato acknowledged in a separate statement it’s in discussions with Paytm for such a deal, to boost what it called its “going-out” business.

The discussions between Paytm and online food delivery firm Zomato are in advanced stages, though there are other suitors for the business, Bloomberg News first reported.

Paytm’s potential sale of its events and movie ticketing businesses to Zomato would enable the fintech company to focus on its main payments service as it launches promotional campaigns to acquire new users and reactivate previous customers affected by its shuttered banking arm.

A deal may be margin accretive for Zomato over the long term as the ticketing assets - valued at 20 billion rupees - would be part of a segment comprising less than 2% of its financial year 2024 adjusted sales, said analyst Nathan Naidu.

Paytm, run by billionaire founder and chief executive officer Vijay Shekhar Sharma, last month reported its first sales decline on record, and vowed to trim non-core assets.

It also warned of job cuts, reflecting the fallout from regulatory action on Paytm Payments Bank Ltd that curtailed much of the fintech’s business and forced it to forge new partnerships with lenders.

Paytm does not control the bank but relied on it for digital wallets and payments traffic before the central bank’s move earlier this year.

Paytm does not disclose standalone numbers for its movie and events ticketing arm.

It reported annual sales of 17.4 billion rupees (US$208mil) in the financial year through March 2024 in its marketing services business, which includes movie and events as well as credit card marketing and gift vouchers.

The sale, if successful, would allow Paytm to sharpen its focus on travel, deals and cash-backs - businesses that are important for broadening its merchant base and growing its own sales.

“As noted in our earnings call, our focus will be on payment and financial services along with digital goods commerce, which are designed to help our merchants scale their businesses,” Paytm said in the statement.

The purchase could help food delivery firm Zomato expand its digital business into a new high-growth area.

In 2020, it acquired Uber Technologies Inc’s India food unit.

 - Bloomberg

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