Eternal Ltd shares gained momentum on Tuesday, rising 3% to ₹294.63 following the company's latest shareholding pattern disclosure. The stock's upward movement came after key developments in its foreign shareholding structure that could significantly impact its global index positioning.

MSCI Eligibility Breakthrough

The company's foreign room has crossed the critical 25% threshold, marking a significant milestone for the stock's MSCI inclusion prospects. Previously, Eternal held only half weight in the MSCI index due to limited foreign room availability.

Analysts anticipate this change will be reflected in MSCI's February review, potentially triggering substantial passive inflows of approximately $390 million if the full weight adjustment is implemented.

Market Performance and Trading Activity

The stock demonstrated strong momentum during Tuesday's trading session, significantly outperforming the broader market. While the NSE Nifty 50 Index declined 0.03%, Eternal shares showed robust buying interest.

Recent Corporate Developments

Eternal, which serves as the parent entity of Zomato and Blinkit, recently received GST demand orders from West Bengal tax authorities. The orders, passed by the Additional Commissioner of State Tax (Appeals), amount to over ₹27.56 crore including interest and penalty for the period between April 2020 and March 2022, relating to short payment of output tax.

Analyst Outlook

Despite recent regulatory challenges, analyst sentiment remains overwhelmingly positive on the stock. The consensus view reflects strong confidence in the company's growth prospects and market position.

The average 12-month consensus price target of ₹379.16 suggests significant upside potential from current levels, reinforcing the positive outlook among market participants. The potential MSCI weight adjustment could further strengthen the stock's position in global portfolios, making it an attractive proposition for institutional investors.

Eternal shares surged over 4% on January 13, reaching a near one-month high of ₹297.30, as the company's latest shareholding pattern revealed an increase in foreign headroom above 25%. This development has triggered market optimism about a potential increase in MSCI weightage for the stock, making it the top gainer on both Sensex and Nifty indices.

Foreign Headroom Improvement Drives Market Optimism

The key catalyst behind the stock's strong performance was the revelation that Eternal's foreign headroom has increased to above 25%, as per the latest shareholding pattern for the October-December quarter of financial year 2026. This improvement in foreign ownership limits has significant implications for the stock's index weightage and potential institutional inflows.

MSCI Weightage Implications

Currently, the stock carries only half weight in the MSCI index due to the previously low foreign headroom. However, the latest increase in foreign headroom makes the stock eligible for full MSCI weightage, according to analyst notes. This potential upgrade could have substantial financial implications for the company and its shareholders.

Analysts suggest that any change in MSCI weightage could be reflected in the February MSCI review, potentially resulting in passive inflows worth $390 million. Such inflows typically occur when institutional investors adjust their portfolios to match updated index compositions.

Recent Stock Performance Analysis

Despite the recent surge, Eternal shares have experienced some volatility in recent trading sessions. The stock has shown mixed performance across different time frames, reflecting the dynamic nature of market sentiment.

Current Market Metrics

The stock's current market positioning reflects its growth trajectory and investor expectations. With a market capitalization of approximately ₹2.83 lakh crore, Eternal maintains its position as a significant player in its sector.

The substantial increase in foreign headroom represents a positive development for Eternal, potentially opening doors for enhanced institutional participation and improved liquidity. The February MSCI review will be closely watched by market participants for any official changes to the stock's index weightage.