Eternal proposes 49.5% cap on foreign ownership, seeks shareholder nod

Eternal, formerly known as Zomato, has proposed a cap on total foreign ownership at 49.5% on a fully diluted basis, in a move aimed at strengthening regulatory compliance and preserving long-term control amid expansion in quick commerce.

The board of directors approved the proposal at its meeting on April 18, and the decision now awaits shareholder approval through a special resolution via postal ballot, as per guidelines under the Securities and Exchange Board of India (SEBI).

The proposed ceiling will apply to all foreign investments, including foreign direct investment (FDI), foreign portfolio investment (FPI), indirect holdings by non-resident Indians (NRIs) and foreign-owned or controlled Indian entities. The cap will cover equity instruments defined under the Foreign Exchange Management Act (FEMA) — such as equity shares, compulsorily convertible preference shares, and debentures — acquired through both primary and secondary markets, except via the non-repatriation route.

Eternal stated the move is intended to ensure alignment with regulatory frameworks while advancing its the fast-growing quick commerce space.

In compliance with SEBI’s guidelines Eternal will issue a postal ballot notice and formally notify stock exchanges.

Eternal shares ended 4.37% higher at ₹231.75 on the BSE ahead of its corporate announcement. Eternal shares have so far this year declined nearly 17% underperforming the NIFTY50 index which has gained 0.87% year-to-date.