Eternal shares are currently in the spotlight as they are expected to face outflows of approximately ₹7,152 crore (around $840 million) following the recent announcement by FTSE. As a result, the stock has declined by 4%. Here’s a closer look at the reasons behind this movement.
With a market capitalisation of Rs. 2,19,352 Crore, the stock opened at Rs. 234.65, which is close to yesterday’s closing price. However, after opening, it made a low of Rs. 227.25, down 4.48 percent . Additionally, since listing the shares have given a return of 80 percent in 4 years
Why Zomato shares fell today
Eternal (formerly Zomato) could see passive outflows totalling around $840 million (approximately Rs. 7,152 crore) it is due to a sharp cut in its Foreign Ownership Limit (FOL) from 100% to 49.5%. This shift will lead to a reassessment of the stock’s weightage in the FTSE & MSCI Index.
Rebalancing in FTSE could account for $380 million (approx. Rs. 3,235 Crore), and MSCI, which is expected to follow the foreign ownership limit (FOL), will also account for another $460 million (around Rs. 3,917 Crore). The rebalancing in the FTSE Russell index is on 27th May.
Normally, index providers adjust a stock’s weight gradually based on how much foreign ownership is allowed, giving the market time to adapt. However, with Eternal Ltd’s sudden cut in the foreign ownership limit from 100 percent to 49.5 percent, they must immediately reduce their investability weight in the indices all at once. This forces passive funds to sell large amounts quickly.
Also read: Bulk Deal: 3 Stocks in focus after 7.99 lakh shares changed hands
About the Company
Zomato, founded in 2008 by Deepinder Goyal and Pankaj Chaddah, is an Indian food delivery and restaurant discovery platform headquartered in Gurgaon, Haryana. Initially launched as FoodieBay, it began as a restaurant listing website and rebranded to Zomato in 2010.
In 2015, Zomato entered the food delivery market in India, which soon became its core business. The company further strengthened its position by acquiring Uber Eats’ India operations in 2020 and quick-commerce platform Blinkit in 2022. Its subsidiaries include Zomato, Blinkit, Hyperpure, Feeding India, and Zomaland / District.
The company reported a 63.75 percent YoY increase in revenue from Rs. 3,562 Crore in Q4FY24 to Rs. 5,833 Crore in Q4FY25. On a QoQ basis, the company reported an increase of 7.91 percent in revenue from Rs. 5,405 Crore in the previous quarter.
Their Net profit saw a decline on a YoY basis from Rs. 175 Crore to Rs. 39 Crore for the same period. On a QoQ basis again, the company reported a decrease in Net profit from Rs. 59 Crore in the previous quarter.
Written By Abhishek Das
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