Eternal Ltd , the parent company of food delivery giant Zomato, saw its stock price increase by 2% following a significant block deal. The transaction, involving 60.93 lakh shares valued at ₹156 crore, took place at ₹256 per share, representing 0.06% of the company's total equity.

Block Deal Details

The block deal, which typically involves a large number of shares traded in a single transaction, has caught the attention of market observers. Here's a breakdown of the key figures:

This substantial transaction suggests continued interest in Eternal Ltd's stock among institutional investors or large stakeholders.

Market Response

The stock market responded positively to the news of the block deal, with Eternal Ltd's share price climbing 2%. This uptick indicates that investors view the transaction as a vote of confidence in the company's prospects.

Competitive Landscape

The news of the block deal comes at a time when Eternal Ltd's subsidiary, Zomato, faces potential new competition in the food delivery space. Reports suggest that Rapido, a bike taxi and auto-rickshaw aggregator, is considering entering the food delivery market.

Rapido's Potential Entry

Rapido's rumored entry into food delivery could present a challenge to Zomato's market position. The key factor that might differentiate Rapido's offering is:

• Lower commissions: Rapido is reportedly planning to offer lower commissions to restaurants compared to existing players like Zomato.

This potential move by Rapido could intensify competition in the food delivery sector, which has been dominated by a few major players in recent years.

As the food delivery landscape continues to evolve, investors and industry watchers will be keeping a close eye on how Eternal Ltd and its subsidiary Zomato respond to these emerging competitive pressures. The company's ability to maintain its market share and profitability in the face of new entrants will be crucial for its future performance and stock valuation.

Shares of Eternal (formerly known as Zomato) experienced a significant drop of 4.5% following the company's decision to cap foreign shareholding at 49.5%. This strategic move, aimed at facilitating a first-party inventory model for its subsidiary Blinkit, has sparked concerns among investors and market analysts.

Potential Market Impact

The implementation of this foreign shareholding cap could trigger substantial outflows ranging from ₹6,808.00 crore to ₹10,793.00 crore (approximately $820.00 million to $1.30 billion). This projection is based on the potential weight reductions in key global indices such as MSCI and FTSE, which are closely watched by international investors.

Strategic Rationale

Eternal's decision to limit foreign ownership appears to be driven by its ambition to enhance operational flexibility for Blinkit, its quick-commerce subsidiary. By adopting a first-party inventory model, the company likely aims to improve supply chain efficiency and potentially boost its competitive edge in the rapidly evolving quick-commerce sector.

Investor Reactions

The immediate market reaction, as evidenced by the 4.5% drop in share price, suggests that investors are cautious about the short-term implications of this move. The potential outflows from index adjustments could put pressure on the stock in the near term.

Looking Ahead

As Eternal navigates this transition, market participants will be keenly watching how the company balances its strategic objectives with shareholder interests. The success of the first-party inventory model for Blinkit and its impact on the overall business performance will be critical factors to monitor in the coming months.

Investors and analysts alike will be eager to see how this strategic shift affects Eternal's growth trajectory and market position in the competitive food delivery and quick-commerce landscape.