Eternal To Cap Foreign Ownership At Under 50%

Eternal’s board approved the proposal to cap the foreign ownership at 49.50% on a fully diluted basis today

The investors whose shareholding will be capped include FDI, foreign portfolio investors and non-resident Indians (NRIs)

While foreign investors shed 3% of their stakeholding in the company at the of the March quarter, domestic investors gained similar shareholding in the company

Zomato and Blinkit parent Eternal will soon cap the foreign ownership in the company at 49.5%. In a meeting today, the company’s board approved the proposal to cap the foreign ownership on a fully diluted basis. 

The investors whose shareholding will be capped include FDI, foreign portfolio investors (FPIs) and non-resident Indians (NRIs). The company will now seek the approval of its shareholders for the proposal. 

At the end of the March quarter, foreign shareholding in Eternal stood at 44.36%. This was about 3% lower than the 47.30% foreign shareholding Eternal had at the end of the December quarter. Its foreign stakeholders include Kuwait Investment Authority Fund, Antfin, Vanguard, the Singapore government, among others. 

Meanwhile, domestic shareholders increased their stake in the company to 23.56% at the end of the last quarter from 20.54% at the end of the December quarter.

Domestic mutual funds that hold a stake in the company include Mirae Asset, Axis, HDFC, Kotak, ICICI. 

For context, FPI holding is generally capped at 24% of the paid-up capital of a company and those of NRIs is set generally at 10% of the paid-up capital.

So, why is Eternal looking to cap the foreign ownership? The reason behind this might be the government’s preference to have larger domestic ownership in quick commerce grocery delivery companies. This was evident during commerce minister Piyush Goyal’s speech during ‘Startup Mahakumbh’.

Speaking about Zepto’s potential listing, the commerce minister highlighted the foreign shareholding in the startup. 

“When it comes to instant grocery delivery, I don’t have problems. They can list at a few billion dollars, I will be really happy. I only wish that they had more Indian investors rather than foreigners buying all of our startups,” the minister said. 

Blinkit’s competitors Zepto and Flipkart, both of which are eyeing listings in the Indian public markets soon, also have significant foreign ownership. While Flipkart is owned by Walmart, the likes of General Catalyst, Y-Combinator and Lightspeed own stakes in Zepto. 

As a result, Zepto is looking to increase domestic shareholding in it. As of March, it was reported that the startup was looking to further increase domestic shareholding by raising a debt of $100 Mn to $150 Mn to buy shares from existing investors.

Meanwhile, it is important to note that foreign investors have been lukewarm towards listed Indian companies for a large part of 2025. FIIs have been on a selling spree in the Indian market, selling about INR 1.62 Lakh Cr worth of shares in the market till the end of last week.

Shares of Eternal ended Thursday’s trading session 4.37% higher from the previous close at INR 231.75 on the BSE.