Zomato, Paytm Confirm Acquisition Talks; Shares Rally

Shares of Zomato and Paytm are in focus today as the Gurgaon-based foodtech major reportedly confirmed that it is in talks with Paytm for the acquisition of latter's ticketing and movie business. Shares of Paytm and Zomato witnessed rally in morning trade today. Current market price of Zomato share on BSE is Rs 187.60 per share with intraday gain of 0.75%. Zomato shares rallied 8.80% in last 2-weeks. Meanwhile, current market price of Paytm share on BSE is Rs 428.05 per share with intraday jump of 0.74%.

Zomato has a market capitalisation of Rs 1,65,241.16 crore and Paytm has a market cap of Rs 27,258.65 crore. Shares of One 97 Communications Ltd, parent company of Paytm, gained 12% in last 1-week and 19% in last 2-weeks.

Confirmation from the 2 companies arrived after reports stated that Zomato was planning to acquire Paytm's movies and ticketing vertical for about Rs 1,600-1,750 crore ($190-210 million).

According to the exchange filing issued by Zomato, "We have noticed that there are certain news articles circulating in the mainstream media with the subject "Zomato in talks to acquire Paytm's movies, ticketing business". This voluntary disclosure is being made to clarify our stance on the matter given that any transaction that is considered potentially meaningful may create uncertainty in the market."

We acknowledge that we are in discussions with Paytm for the aforementioned transaction, however, no binding decision has been taken at this stage that would warrant a Board approval and subsequent disclosure in accordance with applicable law, added the BSE filing of Paytm.

The above discussion is being undertaken with an intent to further strengthen our Going-out business and is in line with our stated position of focusing only on our four key businesses currently, stated the exchange filing of Paytm issued as on June 16, 2024.

Paytm also issued a clarification regarding the acquisition update via its BSE filing (June 16, 2024) stating, "The Company routinely explores various strategic opportunities aimed at enhancing shareholder value. The potential transfer of Paytm's Entertainment business, a component of our Marketing Services, is one opportunity under consideration. As noted in our earnings call, our focus will be on payment and financial services along with digital goods commerce, which are designed to help our merchants scale their businesses. However, any discussions currently underway are preliminary and do not involve any binding agreements that require approval or disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, or other applicable laws. As such, any information pertaining to these discussions should be considered speculative at this time."