Eternal Limited Limits Foreign Ownership to 49.5%, Seeks Shareholder Nod

Strategic Decision Reflects Regulatory Compliance and Focused Growth in Quick Commerce

Eternal Limited, formerly operating under the name Zomato Limited, has announced a significant strategic development by capping total foreign ownership in the company at 49.5% on a fully diluted basis. This move was approved by the company’s board of directors during a meeting held on April 18, 2025, and is contingent upon shareholder approval through a special resolution. The company will initiate this approval process via a postal ballot in accordance with the Securities and Exchange Board of India (SEBI) regulatory framework.

The proposed foreign investment ceiling will encompass all forms of overseas capital inflows, including Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), and indirect foreign investments by non-resident Indians (NRIs). It will also include foreign-controlled Indian entities and other applicable investment vehicles. This restriction applies to all equity instruments as defined under the Foreign Exchange Management Act (FEMA), including equity shares and compulsorily convertible preference shares or debentures acquired through both primary and secondary markets. However, instruments acquired via the non-repatriation route will be exempt from the cap.

Highlights:

• Foreign ownership cap set at 49.5% on a fully diluted basis

• Includes FDI, FPI, NRI investments, and indirect foreign holdings

• Applies to equity instruments under FEMA, excluding non-repatriation route

Aligning with SEBI Compliance While Safeguarding Strategic Objectives

Eternal’s decision is deeply rooted in its aim to preserve strategic control amid heightened investor interest and growing regulatory expectations. The board emphasized that the foreign ownership cap is being introduced in compliance with the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, as well as the SEBI master circular dated November 11, 2024. The company views this as a necessary step to align with legal obligations while fortifying its long-term vision.

In particular, the move is expected to bolster the company’s ambitions in India’s fast-expanding quick commerce sector. Eternal, through its subsidiary Blinkit, is pursuing aggressive expansion plans and is positioning itself to evolve into an Inventory Ownership Category Company (IOCC). Limiting foreign shareholding enables the company to retain operational flexibility, faster decision-making capabilities, and alignment with national strategic interests in digital commerce.

Highlights:

• Move complies with SEBI LODR and master circular dated November 11, 2024

• Supports Eternal’s ambitions in quick commerce and Blinkit expansion

• Part of broader plan to transition into an IOCC

Postal Ballot Process to Determine Shareholder Backing

To formalize the foreign ownership ceiling, Eternal Limited will now proceed to issue a postal ballot notice to its shareholders. The company will simultaneously notify stock exchanges of the proposed resolution. As per regulatory protocols, the resolution must be passed through a special resolution, which requires approval from at least 75% of the voting shareholders.

The company highlighted that the success of this resolution is vital to maintaining a balance between attracting foreign capital and ensuring that control remains in domestic hands. This is especially crucial as the company scales operations and pursues a more asset-heavy business model under its evolving quick commerce strategy.

Highlights:

• Postal ballot to seek shareholder approval for foreign ownership cap

• Special resolution requires 75% majority approval

• Ensures domestic strategic control amid scaling operations

Reinforcing Domestic Control in a Competitive Landscape

The decision to cap foreign ownership at 49.5% signals Eternal Limited’s intent to protect long-term interests while remaining open to international investment. In a competitive landscape where digital commerce and quick delivery services are rapidly evolving, this cap is likely to offer Eternal a regulatory cushion to pivot swiftly as market dynamics shift.

By securing domestic strategic control, Eternal hopes to achieve operational autonomy as it competes with major quick commerce players and builds a sustainable model in a segment where unit economics and inventory management are key to long-term profitability. The resolution is not only a compliance move but also a forward-looking decision to balance control with growth.

Highlights:

• Aimed at protecting long-term interests amid foreign investor demand

• Supports operational autonomy in India’s dynamic commerce sector

• Part of Eternal’s vision to maintain flexibility and scalability