Zomato Shares Make Early Gains After Shutting Down Intercity 'Legends' Services

As Zomato's decision to buy Paytm's ticketing business shrouds headlines, another development from the Deepinder Goyal company has now come to fore.

The delivery and quick service company has decided to close its ambitious 'Legends' service.

Zomato Shutters Legends

Zomato shares, however, appear to have responded positively, despite this development. In the early hours of the day's trade on Friday, August 23, the company shares made gains of over 3 per cent.

The confirmation of the termination of the Legends service came from the company CEO, Deepinder Goyal.

Goyal took to his X account and said, "Update on Zomato Legends - after two years of trying, not finding product market fit, we have decided to shut down the service with immediate effect."

Legends, an inter-city meal delivery service, was founded in 2022 with the novel idea of providing well-known foods from Hyderabad, Lucknow, and Kolkata to clients in other regions of the country.

The markets, however, appear to be swayed by the Gurugram-based company's acquisition of Vijay Shekhar Sharma-founded Paytm's ticketing business for Rs 2,048 crore.

As a part of that deal, the company's entertainment ticketing business will transfer business to its 100 per cent subsidiaries, Orbgen Technologies Pvt Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL). This will be followed by the sale of a 100 per cent stake in these subsidiaries (which operate the TicketNew and Insider platforms) to Zomato.

Zomato Shares Drop

In addition, it is also understood that the company's decision to terminate 'Legends' could be seen as a savvy move by investors in cost cutting, by the company.

The company shares, after making gains of over 3 per cent at the beginning of the day, slowly the entity's shares lost their momentum but continued on the green trail. Eventually, the shares regained their bullish momentum at 09:56 IST. The company shares surged by 3.45 per cent or Rs 8.90, climbing to Rs 266.86 a share.