Eternal(Zomato) Proposes 49.5% Cap on Foreign Ownership to Maintain IOCC Status

Eternal Limited (formerly Zomato Limited) has proposed a cap of up to 49.5% on total foreign ownership. The board approved this on April 18, 2025. Shareholders will vote on the resolution through electronic postal ballot from April 20 to May 19, 2025. The outcome will be announced by May 21.

As of 9:32  am on April 21, 2025,  Eternal share price was trading at ₹227.96, a 1.58% down. The shares are down 19.25% over the past six months and up 10.96% over the past year.

What the Cap Covers

The proposed ceiling applies to all foreign investments, including:

• Foreign Direct Investment (FDI)
• Foreign Portfolio Investment (FPI)
• Indirect investments by NRIs
• Investments by foreign-owned or controlled Indian entities

This limit includes all equity instruments as defined under FEMA – equity shares, compulsorily convertible preference shares, and debentures, whether acquired in the primary or secondary market. The only exclusion is investments through the non-repatriation route.

Reason for the Cap

As of March 31, 2025, around 55% of Eternal’s fully diluted shareholding was held domestically, with foreign ownership at approximately 45%. This qualifies the company as an Indian-Owned and Controlled Company (IOCC) under Indian foreign exchange regulations. Eternal does not have a promoter group, so this cap is being proposed to maintain IOCC status.

Quick Commerce Link

Eternal’s quick commerce unit, Blinkit, is currently structured as a third-party marketplace. With IOCC classification in place, the company plans to gradually shift to owning inventory directly. Blinkit saw 93% YoY growth in gross order value (GOV) in FY24, and 123% growth over the nine-month period ending December 2024.

Read More: Zomato to Trade as ‘Eternal’ on Stock Exchanges Starting April 9, 2025

Conclusion

If shareholders approve the proposal, the cap will be implemented in compliance with FEMA and SEBI regulations. Any change in the company’s future classification may lead to a review of this limit.

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