Eternal shares rise 4% intraday on hopes of higher MSCI weightage, foreign fund inflow

Eternal stock extended gains to the fifth straight day after the company released its shareholding pattern for the December 2025 quarter.

As per the shareholding pattern for December 2025, foreign headroom has increased and is now above 25%. According to news reports, foreign room increase will likely drive full MSCI weight in the February review.

Currently, the stock carries half weight in the MSCI index due to low foreign headroom.

This latest shareholding pattern disclosure, reports say, will make the Eternal stock eligible for full weightage in the MSCI Index in its upcoming review in February 2026.

This change is expected to be reflected in the February MSCI review, potentially resulting in passive inflows of $390 million.

What happened in April 2025?

In April 2025, Eternal’s board of directors gave its nod to cap the foreign ownership of the company at 49.5% to maintain the company's status as an Indian-Owned and Controlled Company (IOCC) under the FEMA regulations.

As per the domestic FDI rules, e-commerce platforms having majority foreign ownership (more than 50%) are not allowed to stock their own inventory and can only operate through the marketplace model.

Hence, this IOCC status was important for the company, as it will allow Eternal’s quick commerce business, Blinkit, to switch to the inventory-led business model, allowing the company to stock its own inventory.

As per experts, switching to an inventory-led business model will allow Blinkit to have better control over products, supply chains, and margins and could result in better profitability.

What is the MSCI index, and how does it impact investment in Indian stocks?

Morgan Stanley Capital International (MSCI) is a set of global stock market indices that track the performance of stocks from different countries and regions. These MSCI indices act like benchmarks and guidance for global investors and financial institutions to decide their investments.

The MSCI India Index is one of the actively tracked indices from the Indian stock market perspective.

Many foreign mutual funds, financial institutions, ETFs and pension funds invest in Indian stocks based on their weightage in the MSCI India index.

When Indian companies are added to the MSCI index or their percentage weightage is increased, global funds tracking the index generally buy into those stocks, leading to higher demand, rising share prices and strong trading volumes.

For example, when stocks like Reliance Industries or HDFC Bank see an increase in MSCI weightage, foreign investors invest more money into these shares.

On the other hand, if a stock is removed or its weight is reduced, funds may sell, putting pressure on prices.

Eternal stock performance