Stock Discussion: Zomato Acquires Paytm's Ticketing services for Rs.2048Cr. Paytm up by 5%, Zomato by 2%

Markets Discussions
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Zomato is set to acquire Paytm’s entertainment and ticketing business for ₹2,048 crore as it seeks to expand into the ‘going-out’ segment. This acquisition aligns with Zomato’s broader lifestyle services strategy, introducing a new app called ‘District,’ which will combine dining, movie, and event ticketing. Paytm will retain ticketing services on its app for the next year, gradually transitioning users to Zomato’s platform. The deal includes the transfer of 280 Paytm employees to Zomato. This acquisition is expected to boost Zomato’s revenue growth in the long term, despite initial modest financial impact.

Experts believe that Zomato’s focus on discoverability and integration with its food offerings will help enhance the ticketing experience for users, potentially driving more frequent engagement. This move is also part of Zomato’s strategy to capture a larger share of users’ lifestyle spending. Paytm, on the other hand, will refocus on its core financial services, using the proceeds from the sale to strengthen its balance sheet.

The acquisition comes as India’s live events and ticketing industry shows strong growth, especially in Tier II cities, with increasing acceptance of live events and higher revenue from premium content. Zomato’s new venture, Zomato Live, is expected to leverage this trend, generating revenue from event ticketing, sponsorships, and food sales at live events.

Which platform do you use primarily ?

Swiggy or Zomato :slight_smile:

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Eat at home mostly. But if I have to swiggy. Swiggy had more offers and net lower order cost relative to Zomato.

Also I use Swiggy Instamart.

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do you have any other quick commerce company options in your area?

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Zomato to check new restaurants to eat out at and Swiggy for Instamart / ordering food.

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No. Currently, Swiggy is the sole player in quick commerce space here.

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Swiggy platform user here, started with that and hence finding no reason to try another.

The rationale behind this acquisition remains unclear to me.

Zomato possesses a substantial user base, which could facilitate the upselling of this new ticketing initiative. It raises questions as to why the company would choose to invest in acquiring a business model that it could develop independently from the ground up.

Moreover, I perceive no significant financial rationale for this action beyond the possibility of transferring working capital from Zomato to Paytm, for reasons that are not immediately evident.