Paytm, officially known as One97 Communications Ltd., is reportedly in advanced discussions with Zomato Ltd. to sell its movie and events ticketing business. This move is part of Paytm’s strategy to revive its business amid weakening sales.
Advanced Discussions
Sources familiar with the matter have revealed that Paytm and Zomato are engaged in advanced talks regarding the sale. Although the discussions are ongoing and no final decision has been made, other potential buyers are also interested in the business. The individuals involved in the discussions have chosen to remain anonymous due to the private nature of the negotiations.
Strategic Shift by Paytm
Last month, Paytm, led by billionaire founder-CEO Vijay Shekhar Sharma, reported its first-ever sales decline. In response, the company vowed to streamline its operations by shedding non-core assets and warned of potential job cuts. This strategic shift is largely due to regulatory actions on Paytm Payments Bank Ltd., which has significantly impacted the fintech company’s operations, forcing it to seek new partnerships with lenders.
Impact of Regulatory Actions
Although Paytm does not control Paytm Payments Bank, it heavily relied on the bank for digital wallets and payment traffic. The central bank’s regulatory actions earlier this year curtailed much of Paytm’s business, prompting the company to reevaluate its strategy and focus on more profitable segments.
Financial Performance
Paytm does not disclose standalone figures for its movie and events ticketing business. However, the company reported annual sales of 17.4 billion rupees ($208 million) for the fiscal year ending March 2024 in its marketing services segment, which includes movie and events ticketing, credit card marketing, and gift vouchers.
Potential Benefits of the Sale
If the sale to Zomato is successful, Paytm will be able to concentrate on its core businesses such as travel, deals, and cash backs. These segments are crucial for expanding its merchant base and increasing sales. For Zomato, acquiring Paytm’s movie and events ticketing business could mark a significant expansion into a new high-growth area, complementing its existing digital services. Zomato previously acquired Uber Technologies Inc.’s India food unit in 2020, demonstrating its ambition to grow through strategic acquisitions.
No Comment from Companies
Both Paytm and Zomato have not responded to requests for comment outside of regular business hours.
