Paytm shares rallied on Thursday morning after the fintech giant announced the sale of its entertainment and ticketing business to the food delivery major Zomato for Rs 2,048 crore.
Paytm stocks jumped as high as 5.47 per cent to Rs 604.45 apiece while Zomato climbed 2.7 per cent to record Rs 267 per share. However by afternoon, Zomato shared saw a slight dip of 0.4 per cent.
The two companies have reached definitive agreements regarding the sale, according to which the ticketing platform will still be available on Paytm app during the one-year transition period. Following this, the platform will redirect users to Zomato's new app.
Paytm parent One97 Communications stated that the move will allow it to strengthen its focus on core payments and financial services distribution. It added that the fintech firms is confident in loss of revenue from its entertainment ticketing business can be levelled by expanding core business areas of payments and financial service distribution.
Zomato MD and CEO Deepinder Goyal told its shareholders in a letter that the proposed acquisition will help the food delivery firm to scale up and gives its customers newer use-cases like movie and sports ticketing.
