Eternal Limits Foreign Ownership to 49.5% to Help Blinkit Operate Like an Indian Retailer

New Delhi | 19 April 2025 — Eternal, the parent company of Zomato and Blinkit, has proposed capping foreign ownership at 49.5% in a strategic move to qualify as an Indian-owned-and-controlled company (IOCC). The change is expected to give the company more operational freedom, especially for Blinkit, its quick commerce platform, which is currently restricted under India’s foreign direct investment (FDI) rules.

Why the Cap on Foreign Ownership?

Under India’s FDI policy, e-commerce platforms with majority foreign ownership are not permitted to hold inventory or sell their own products. Instead, they must operate as pure marketplaces, relying on third-party sellers and operators to manage logistics and product storage.

By ensuring Indian ownership remains above 50%, Eternal gains the regulatory flexibility to transition Blinkit to an inventory-led model. This shift allows Blinkit to stock and sell its own products, expand into underserved categories, and improve margins by directly sourcing from manufacturers.

As of March 31, Indian investors, including mutual funds, financial institutions, and retail shareholders, held 55% of Eternal. This threshold positions the company to be treated as domestically owned under Indian law. The proposal to cap foreign investment at 49.5% now awaits shareholder approval.

Strategic Benefits for Blinkit

With a new ownership structure, Blinkit stands to gain significantly:

• Control over inventory: Blinkit can move away from relying on partner-operated dark stores and manage inventory directly.

• Product diversification: The company can enter verticals like gourmet food, toys, home décor, and seasonal items—categories that lack strong Indian brands.

• Support for local suppliers: Blinkit can offer working capital to small manufacturers or purchase products from them directly.

• Higher margins: Owning inventory allows better control over sourcing and pricing, leading to stronger margins, especially in unbranded FMCG categories.

Blinkit CEO Albinder Dhindsa recently commented that quick commerce is still on the path to profitability but believes that customer demand and convenience justify long-term investment in the model. The new structure, he said, will help drive rational growth and better returns.

Context Behind the Change

The move follows Eternal’s ₹8,500 crore fundraise through a qualified institutional placement (QIP) in November 2024, primarily sourced from domestic mutual funds. This capital raise shifted the balance of ownership in favor of Indian stakeholders, enabling the company to pursue an IOCC designation.

The change also comes amid increased regulatory scrutiny of quick commerce platforms. Earlier this year, senior executives from Blinkit, Swiggy Instamart, Zepto, and Bigbasket were called to explain their business models to government officials. The discussions focused on how these companies comply with current e-commerce norms, especially around inventory handling and foreign capital usage.

Eternal isn’t alone. Competitor Zepto recently raised $350 million from Indian investors and is pursuing another $250 million round to secure its IOCC classification. Other digital-first retailers like FirstCry and Nykaa have adopted similar strategies. Nykaa, with approximately 52% Indian ownership, has long operated an inventory-led model to improve customer experience and margin control.

With its revised ownership structure, Blinkit is now better positioned to scale operations and enter new product categories.

For More: “We Almost Died” — Aadit Palicha Breaks Down Zepto’s 2023 Crisis