Eternal, the parent company of Zomato and Blinkit, plans to cap foreign ownership at 49.5% on a fully diluted basis.

The proposal has been approved by the company’s board and will now seek shareholder approval.

The cap will apply to foreign direct investments (FDI), foreign portfolio investors, and non-resident Indians (NRIs).

As of March 2025, foreign shareholding in Eternal stood at 44.36%, down from 47.30% in December 2024.

Key foreign stakeholders include the Kuwait Investment Authority, Antfin, Vanguard, and the Singapore government.

Meanwhile, domestic shareholders increased their stake to 23.56% from 20.54%. Major domestic mutual funds holding shares include Mirae Asset, Axis, HDFC, Kotak, and ICICI.

🔗 Source: Inc42

🧠 Food for thought

1️⃣ Strategic regulatory buffer creation amid changing investment landscape

Eternal’s move to cap foreign ownership at 49.5% creates a calculated 5.14% buffer above its current 44.36% foreign shareholding level, demonstrating strategic foresight in regulatory compliance.

This approach aligns with the Reserve Bank of India’s practice of setting monitoring thresholds below actual limits to prevent accidental breaches of foreign investment ceilings 1.

The timing is notable as Eternal’s foreign shareholding has already decreased by 3% in the previous quarter (from 47.30% to 44.36%), suggesting a recalibration of its investor profile.

The company appears to be balancing regulatory requirements with maintaining access to international capital, a common challenge for Indian companies operating in sectors with sensitivity to foreign ownership.

While India permits up to 100% foreign investment in many sectors, companies often establish voluntary caps to maintain flexibility in ownership structure while ensuring compliance with evolving regulations 2.

2️⃣ Maintaining domestic control in strategic decision-making

By capping foreign ownership at 49.5%, just below the 50% mark, Eternal ensures that domestic shareholders maintain majority control, which has governance implications.