Zomato’s stock dips as it acquires Paytm’s ticketing business for ₹2,048 Crore; Paytm shares climb

Zomato Limited’s stock witnessed a slight dip, trading at ₹260, down by 0.01%, following the announcement of its acquisition of Paytm’s entertainment ticketing business for ₹2,048 crore. In contrast, Paytm’s shares saw a rise, trading at ₹583, up by 1.56% on the NSE, signalling a positive market response to the sale.

Zomato has signed definitive agreements to take over Paytm’s movie, sports, and event ticketing platforms, including Paytm Insider and Ticket New. This acquisition is expected to close within the current quarter and will see approximately 280 employees transitioning from Paytm to Zomato.

The acquired ticketing business generated over ₹2,000 crore in gross order value (GOV) in FY24, along with ₹297 crore in revenue and an adjusted EBITDA of ₹29 crore. Zomato plans to integrate these assets into a new standalone app called “District,” aimed at becoming a comprehensive platform for various going-out experiences. The company projects that this combined going-out business could reach a GOV of ₹10,000 crore by FY26.

Zomato’s CEO, Deepinder Goyal, emphasized that this acquisition aligns with the company’s mission to cater to India’s evolving lifestyle needs. CFO Akshant Goyal defended the valuation of the deal, pegging it at roughly 1.0x the trailing Enterprise Value to FY24 GOV multiple, which he cited as fair compared to industry peers.

Market analysts have responded positively, with Bernstein maintaining an “Outperform” rating for Zomato and Jefferies raising its target to ₹335, citing the strategic expansion of Zomato’s addressable market. Nomura also kept its “Buy” rating with a target of ₹280, noting the company’s focus on increasing GOV.

However, Zomato acknowledges that the success of this acquisition hinges on smoothly transitioning customer traffic to the new District app and effectively integrating the acquired team.