Zomato share price will be in focus after company announced that it will acquire Paytm’s entertainment ticketing business for Rs 2,048 crore.
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Online food delivery platform Zomato will acquire Paytm’s entertainment ticketing business for Rs 2,048 crore to strengthen its “going-out” segment in a deal that will help the troubled fintech firm to sharpen its focus on core payments and financial services distribution.
Paytm’s entertainment ticketing business covers movies, sports, and events (live performances). The boards of Zomato and One 97 Communications Ltd (OCL) have approved the all-cash deal.
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Zomato Share Price
On 21st August, Zomato opened at ₹263.4 and closed lower at ₹263. The stock had touched its high of ₹264.45 for the day and a low of ₹258.95. Zomato’s market capitalization is at ₹226217.56 crore. Past 52 weeks high for the stock was ₹280, while the low was ₹88.16. The BSE volume for the day was 2,123,139 shares.
Zomato Plans To Launch New App ‘‘District’
Subsequently, Zomato will spin off the new business into a new app called ‘District’.
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Under the deal, Zomato will fully acquire Orbgen Technologies Pvt Ltd (OTPL), which is into movie ticketing, for Rs 1,264.6 crore and buy Wasteland Entertainment Pvt Ltd, which is into events ticketing for Rs 783.8 crore.
The combined entertainment ticketing business has a scale of Rs 297 crore in revenue and Rs 29 crore in adjusted EBITDA in FY24.
“The transfer will also include around 280 existing employees from the entertainment ticketing business,” OCL said in a statement, adding that the transaction generates significant profits for Paytm and cash proceeds will further strengthen the balance sheet.
Zomato Aggressive Business Growth Plan
Zomato Managing Director and CEO Deepinder Goyal in a letter to shareholders said, “The proposed acquisition helps us add more scale and offer newer use-cases (like movie and sports ticketing) to our customers in this segment”.
Zomato believes the deal makes it more relevant to its customers and gives an opportunity to spin off the business into a new app.
“We are going to call it District, which could be a game changer for each of these
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use cases given the need for a single brand as a destination in this segment,” Goyal added.
Zomato is keen to position ‘District’ as the brand that consumers turn to when they are thinking of going out, he added.
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