The shares of Zomato Limited were trading at ₹260 down by ₹0.03 or 0.01 per cent, while those of Paytm (One 97 Communications Limited) were trading at ₹583 up by ₹8.95 or 1.56 per cent at 11 am today on the NSE.
Zomato Limited announced it has signed definitive agreements to acquire Paytm’s entertainment ticketing business for ₹2,048 crore. The deal, expected to close this quarter, will see Zomato take over Paytm’s movie, sports, and event ticketing platforms, including Paytm Insider and TicketNew.
The acquired business generated ₹2,000+ crore in gross order value (GOV) in FY24, with revenue of ₹297 crore and adjusted EBITDA of ₹29 crore. Approximately 280 employees will transfer to Zomato as part of the deal.
Zomato plans to integrate the new business into a standalone app called “District,” aimed at becoming a one-stop destination for various going-out experiences. The company expects the combined going-out business to reach ₹10,000+ crore GOV by FY26.
CEO Deepinder Goyal stated the acquisition aligns with Zomato’s mission to “build products and services that power India’s changing lifestyles.” The company aims to create a comprehensive platform for going-out experiences, targeting ₹10,000+ crore GOV by FY26.
Akshant Goyal, Zomato’s CFO, justified the valuation at approximately 1.0x trailing Enterprise value / FY24 GOV multiple, citing it as fair compared to similar companies. The deal structure involves a combination of slump sales and share acquisitions of Paytm subsidiaries.
Analysts reacted positively to the news. Bernstein maintained an “Outperform” rating with a target of ₹275, noting the acquisition expands Zomato’s total addressable market. Jefferies raised its target to ₹335, citing compelling valuation and potential for high returns. Nomura kept its “Buy” rating with a ₹280 target, highlighting management’s focus on increasing GOV.
Zomato emphasized that success will depend on transitioning customer traffic to the new District app and cultural integration of the acquired team. Key risks identified include smooth integration of the acquired business and potential cash burn to incentivize user migration to the new app. The deal includes a 12-month transition period and the transfer of 280 employees to Zomato.