Flipkart reported in talks with BookMyShow for minority stake

India's home-grown ecommerce leader Flipkart is in discussions with BookMyShow to pick up a large minority stake in the online ticketing platform, reports today said.

The move will help Flipkart counter Alibaba-backed Paytm, and will further strengthen India's largest e-ticketing service.

The talks, which are at a preliminary stage, may see the Tiger Global backed Flipkart pick up a significant minority stake in BookMyShow, The Economic Times reported.

The online retailer, working to improve customer retention and increase its stake in urban India, had earlier considered buying BookMyShow, sources the Mint.

Currently, Reliance Industries-owned Network18 is the single largest shareholder in BookMyShow with a 39-per cent stake.

BookMyShow, a part of Bigtree Entertainment, may be valued at $500-700 million if the proposed deal goes through, according to Mint's sources. As of now, the amount Flipkart plans to invest in ticketing platform is not certain.

Flipkart and BookMyShow did not respond to an email query by Moneycontrol regarding this move.

In FY16, BookMyShow reported a profit of Rs3.1 crore on revenue of Rs248 crore. However, sales growth took a hit in FY17 because of a push by Paytm into movie tickets.

Nevertheless, the platform still controls a majority of movie ticket bookings, becoming one of India's very few capital-efficient and profitable internet companies. In July, the company had bought a restaurant-search platform Burrp.

Flipkart's move to join hands with BookMyShow as business partner is in line with the company's aim to expand its overall customer base. The company plans to offer a range of services to keep customers coming back to its platform, the reports said.

Bangalore-based Flipkart has so far raised nearly $3 billion in two tranches this year from SoftBank Group Corp, Tencent Holdings and others. In September, Flipkart acquired Mumbai-based F1 Info Solutions, a mobiles and IT hardware repair firm with a pan-India presence of owned and franchised centres, for an undisclosed amount.

Since its launch in 2007, Flipkart has bought or invested in over 20 companies, with the largest acquisition being an online fashion retailer Myntra for over $330 million in May 2014.

Earlier this year, Flipkart was in talks with its struggling smaller rival Snapdeal for nearly $1 billion in stock but the deal was called off in August due to various differences including valuation and deal structure.

BookMyShow had raised Rs550 crore last year led by Stripes Group in a deal which valued it at over Rs3,500 crore. The funding saw participation from BMS' existing investors  Network 18, Accel Partners, and SAIF Partners.

BookMyShow has an international presence in Indonesia, Sri Lanka, the UAE and New Zealand.

Founded in Mumbai in 1999 and re-launched in 2007, BMS is now present in over 350 towns and cities across India. It enables users to book tickets for movies, plays, sports and live events through its website, mobile app and mobile site.