26 May , 2025 By : Debdeep Gupta
Food delivery major Eternal Ltd. - formerly known as Zomato - saw its shares sink over three percent during the opening session on Monday, May 26, after the internet company is slated to see passive outflows nearing $840 million as global index majors FTSE Russell and MSCI prepare to trim Eternal's weightage in their portfolios, said IIFL Capital Services.
The changes follow a sharp reduction in the Eternal's foreign ownership limit (FOL), which was brought down from 100 percent to 49.5 percent. That move has effectively capped the extent to which overseas investors can hold the stock, forcing index providers to recalibrate its representation.
On Friday, FTSE announced changes in the investability weight of Zomato, while MSCI is likely to make changes during its May review. The stock currently figures in several of FTSE’s prominent indices, including the FTSE All-World Index, the FTSE MPF All-World Index, the FTSE Global Large Cap Index, and the FTSE Emerging Index.
FTSE’s rebalancing alone could lead to passive outflows of about $380 million, or roughly Rs 3,235 crore, IIFL estimated. Meanwhile, MSCI’s May review — which is also expected to account for the FOL cut — could add another $460 million (around ?3,917 crore) to the tally.
At 9.25 am, shares of Eternal were quoting Rs 229.79 on the NSE, down 3.3 percent.
Unlike routine adjustments that consider available foreign investment headroom, a direct FOL cut leads to a more abrupt recalibration, IIFL noted. The result is a full-scale reduction in investability weight in one go, rather than a staggered adjustment — intensifying the risk of near-term selling pressure.
For the quarter ended March, Eternal has reported a 78 percent YoY fall in consolidated net profit to Rs 39 crore in Q4 FY25. It had reported a net profit of Rs 175 crore in Q4 FY24. Revenue from operations however surged 64 percent YoY to Rs 5,833 crore in the fourth quarter of FY25.
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