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New Delhi: Online food delivery platform <keyword id="19901323" type="General" weightage="100" keywordseo="Zomato" source="keywords" meta.keywordsubtype="org" meta.entityname="Zomato" meta.hostid="83" meta.entityid="Zomato">Zomato</keyword> will acquire <keyword id="19898109" type="General" weightage="20" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="83" meta.entityid="Paytm">Paytm</keyword>'s entertainment <keyword id="20028334" type="General" weightage="20" keywordseo="ticketing" source="keywords">ticketing</keyword> 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. As part of this agreement, OCL's entertainment ticketing business will transfer business to its 100 per cent subsidiaries Orbgen Technologies Pvt Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), followed by the sale of 100 per cent stake in these subsidiaries (which operate the TicketNew and Insider platforms) to Zomato. Subsequently, Zomato will spin off the new business into a new app called 'District'. 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. Announcing the deal, Paytm said it allows the fintech to strengthen its focus on core payments and financial services distribution. Paytm said with its strong focus on long-term value creation, the company remains confident in substituting revenue from its entertainment ticketing business by expanding core business areas of payments and financial service distribution. "This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders," a Paytm spokesperson said. On the other hand, Zomato Managing Director and CEO <keyword id="19901325" type="General" weightage="20" keywordseo="deepinder-goyal" source="keywords">Deepinder Goyal</keyword> 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 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. OTPL was incorporated on November 23, 2007, in India. It is in the business of listing and sale of movie tickets and other services. It had a turnover of Rs 13.14 crore in the fiscal ended March 31, 2024. WEPL was incorporated on December 21, 2015. It is in the business of listing and sale of event tickets and other services. Its turnover in the FY24 was Rs 236.03 crore. Paytm said the move to sell its entertainment ticketing business underscores its core focus on payments and financial services distribution. "In recent quarters, the company has also expanded its offerings in insurance, equity broking, and wealth distribution, with a significant opportunity to cross-sell these services and grow its market presence as a leading financial services distribution player," Paytm said. During a transition period (up to 12 months), the movie and event tickets will continue to be available on the Paytm app, as well as on the TicketNew and Insider platforms, ensuring a smooth and uninterrupted experience for users and merchant partners. Paytm said the deal underscores its success in building businesses and creating value for shareholders. Zomato's Goyal said the District app is expected to be launched anytime in the next few weeks. Post this acquisition, he said Zomato's going-out business would be spread across multiple different platforms. Its existing going-out business (dining-out + event ticketing) would continue to run on the Zomato app, and the acquired business -- movie, sports and event ticketing -- would continue to run on Paytm's main app for a transition period of up to 12 months, along with Insider and TicketNew apps. Both of these would get transferred to Zomato as part of the transaction. District app will duplicate the offerings above and over time, we will gradually nudge our customers to move from the Zomato, Paytm, Insider, and TicketNew apps to the District app. "Once most customers start transacting on the District app, we will remove the duplication and shut down this business on all the other apps. Eventually, there will just be a button to launch the District app on the Zomato app (like it is for Blinkit today) so that we continue to tap into the large customer base of Zomato," he added.

Zomato to acquire Paytm's entertainment ticketing business for Rs 2,048 crore

New Delhi, <keyword id="20004114" type="General" weightage="20" keywordseo="vijay-shekhar-sharma" source="keywords">Vijay Shekhar Sharma</keyword>, one of the most recognised faces of India's fintech industry, has seen a fair share of controversies. Sharma launched <keyword id="19898109" type="General" weightage="20" keywordseo="paytm" source="keywords">Paytm</keyword> - an acronym for 'pay through mobile' - offering mobile recharges. He launched wallet services in 2011 but the big push came with the 2016 demonetisation. He took out front-page ads in top newspapers with Prime Minister Narendra Modi's photo, calling demonetisation the "boldest decision in the financial history of independent India". With fewer currency notes in circulation, Paytm was on a roll. Sharma made a splash in 2018 by getting USD 300 million investment in Paytm from <keyword id="19921921" type="General" weightage="20" keywordseo="warren-buffett" source="keywords">Warren Buffett</keyword>'s Berkshire Hathaway. *Controversies* Paytm was mired in controversies with its Chinese connection following huge investments from Alibaba Group. The Chinese internet firm became the biggest shareholder in Paytm with a 34.7 per cent stake before the company's initial public offer. Alibaba group firm Antfin sold around 5 per cent shares to lower its stake below 25 per cent to comply with regulatory requirements at the time of IPO. To shed its Chinese-owned entity image, Paytm in August 2023 announced that founder and CEO Vijay Shekhar Sharma would acquire a 10.3 stake in Antfin through his overseas entity Resilient Asset Management BV which will make him the largest stakeholder in the company with 19.42 per cent stake. In return, Resilient issued a debt instrument --optionally convertible debentures, to Antfin thereby maintaining the economic interest of Alibaba group firm. With this transaction, Antfin's direct stake in Paytm was reduced to 13.5 per cent. Antfin further sold 3.6 per cent in Paytm to bring its shareholding to less than 10 per cent and at present holds 9.89 per cent of the fintech firm. The company's market cap has eroded drastically since the time of its listing. The company's IPO opened on November 8, 2021, in the price band of Rs 2,080-2,150 per share. The Paytm IPO made history with over Rs 18,300 crore share sale 'making it the largest public issue in India's corporate history. But the company's stock made a weak debut in the market on November 18 and hit a lower circuit after recording about 20 per cent decline during trading hours. It finally closed at Rs 1,560, down by about 27 per cent, compared to its issue price of Rs 2,150. Since then, Paytm shares have not been able to cross even half the mark of the issue price. After the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>'s January 31 move, One97 Communications shares tanked around 40 per cent to close at Rs 487.05 on BSE on Friday. Billionaire businessman <keyword id="19952201" type="General" weightage="20" keywordseo="warren-buffet" source="keywords">Warren Buffet</keyword>'s Berkshire Hathaway sold its stake in Paytm at a loss of 31 per cent per share in November 2023. Berkshire Hathaway had invested in Paytm for about Rs 1279 per share but sold it for Rs 877.29 apiece. At present, Cayman Island-registered SAIF III Mauritius Company Limited is the single largest direct shareholder in Paytm with a 10.83 stake followed by Sharma's Resilient Asset Management BV with a 10.29 per cent stake. SAIF Partners is led by Chinese-origin entrepreneurs with Andrew Y Yan as its managing partner. *Paytm run-ins with RBI* RBI on June 19, 2018, prohibited Paytm Payments Bank from opening any new account and wallet with effect from June 20, 2018, on account of supervisory concerns, which were lifted by RBI on December 27, 2018, with effect from December 31, 2018. The Office of Banking Ombudsman issued a show-cause notice dated March 6, 2019, for Paytm Payments Bank's failure to monitor a certain account maintained with it which had shown a sudden increase in the velocity of daily transactions involving immediate transfer to other banks. The actions were found to be in the violation of RBI's provisions on KYC. RBI rejected Paytm Payments Services Ltd's (PPSL) application to operate as a payment aggregator on November 25, 2022. The banking regulator asked the firm to re-submit applications within 120 days after it gets government approval on investment made by OCL into PPSL as per FDI guidelines. The regulator asked PPSL to continue operations with the condition that no new merchants should be onboard. After completion of 120 days, RBI again granted PPSL an extension but without removing the bar on new merchant onboarding. RBI issued a show cause notice to PPBL on July 29, 2021 for submitting false information to RBI confirming completion of the transfer of the Bharat Bill Payment Operating Unit ("BBPOU") by OCL to PPBL on August 28, 2017. The actual transfer of the BBPOU business by the Company to PPBL was completed only by March 31, 2021. RBI on October 1, 2021, imposed a penalty amounting to Rs 1 crore on PPBL for a contravention of the Payment and Settlement Systems Act, 2007. RBI imposed a penalty of Rs 5.93 crore on PPBL on October 10, 2023, after it found several non-compliances including banks failure to identify beneficial owners in respect of entities on-boarded by it for providing payout services. RBI found that PPBL did not monitor payout transactions and carry out risk profiling of entities availing payout services, breached the regulatory ceiling of end of the day balance in certain customer advance accounts availing payout services. The banking regulator found that PPBL reported a cyber security incident with delay and failed to implement device binding control measures related to 'SMS delivery receipt check'. PPBL video-based customer identification process infrastructure failed to prevent connections from IP addresses outside India.

Vijay Shekhar Sharma: The controversies of the architect of fintech

<ul><li>Major websites like Zomato, <keyword id="6357120" type="DEFINITION" weightage="20" keywordseo="paytm">Paytm</keyword>, Sony LIV and others in India, which were affected by another <keyword id="208623" type="COMPANY" weightage="20" keywordseo="Akamai">Akamai</keyword> outage are now back up.</li><li>This is the second outage to be reported in as many months.</li><li>The internet infrastructure provider is aware of the issue and is currently working on fixing the issue.</li></ul>Several major websites were hit by a widespread <keyword id="6957080" type="UNKNOWN" weightage="20" keywordseo="internet-outage">internet outage</keyword>. Popular websites like Zomato, Paytm, Sony LIV, PlayStation Network and Disney+Hotstar were spotted being unable to load and affected by the disruption. A little over an hour later, the sites are back to functioning normally. <div type="twitter" handle="zomato" handlename="zomato" image="http://pbs.twimg.com/profile_images/1100268333352525826/IkyIXuZ4_normal.png" favoritecount="147" retweetcount="4" status="Phew! We are back!" createdat="1626973586000" id="1418256133597192192"></div> According to internet outage tracker <a href="https://downdetector.in/archive/">DownDetector</a>, the outage started around 8:55 pm Indian Standard Time (IST). <div type="image" title="Screenshot (51)" msid="84654467" hostid="261" caption="&amp;lt;p&amp;gt;Akamai outage&amp;lt;/p&amp;gt;"></div> The internet infrastructure provider behind these websites, Akamai, confirmed the outage at its end at around 10:15 pm. It took the company around 30 minutes to get things back to normal. <div type="twitter" handle="Akamai" handlename="Akamai Technologies" image="http://pbs.twimg.com/profile_images/1281610858343403521/Rz6H-Osj_normal.png" favoritecount="271" retweetcount="258" status="We are continuing to monitor the situation and can confirm this was not a result of a cyberattack on the Akamai platform." createdat="1626973949000" id="1418257652660985858"></div> Indian websites weren't the only ones caught up in the disruption. The outage hit major parts of the internet around the globe including sites like Delta Air Lines, British Airways, Capital One, Go Daddy, Vanguard, UPS, LastPass, AT&amp;T and Costco.

Zomato, Paytm, Sony LIV, Disney+Hotstar back up after glitch takes down internet

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Zomato to acquire Paytm's entertainment ticketing business for Rs 2,048 crore

PTI

Vijay Shekhar Sharma: The controversies of the architect of fintech

PTI

Zomato, Paytm, Sony LIV, Disney+Hotstar back up after glitch takes down internet

Sudhanshu Singh

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