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, 2026, following the disclosure of its latest shareholding pattern that revealed a significant milestone in foreign ownership limits. The stock reached a day's high of ₹297.25, up from the previous closing price of ₹285.25, as investors responded positively to the potential for enhanced index inclusion.

Foreign Ownership Breakthrough

The key catalyst behind the share price movement was the revelation that foreign headroom in Eternal has now exceeded the 25% mark. This development is particularly significant as the company was previously assigned only half weight in the MSCI index due to limited foreign investment room. The crossing of this threshold removes the cap and makes Eternal eligible for full MSCI weighting.

Potential MSCI Impact and Inflows

The upgrade could be factored into MSCI's February review, with significant implications for passive fund flows. If Eternal receives full MSCI weight, it might attract passive inflows of approximately $390 million, equivalent to ₹3,510 crore. This influx would come from global funds and ETFs that track MSCI indices and must adjust their holdings to align with index weights.

MSCI, or Morgan Stanley Capital International, curates widely tracked indices including MSCI India and MSCI Emerging Markets. When MSCI increases a stock's weight, passive funds typically step in to purchase additional shares, often leading to short-term rallies and attracting new institutional money.

Q2 FY26 Financial Performance

Eternal reported mixed financial results for Q2 FY26, showing strong revenue growth but declining profitability metrics:

Segment-wise Performance Analysis

The company's businesses delivered varied performance across different segments on a year-on-year basis:

The standout performer was quick commerce, which grew by 756% driven by rapid scale-up and higher order volumes. Food delivery revenue showed steady growth at 22%, while the going-out segment rose 23%, reflecting recovering consumer activity. However, the B2B supplies vertical through Hyperpure experienced a 31% decline, indicating challenges in that business area.

Market Implications

The potential MSCI upgrade represents a significant milestone for Eternal, as it would improve the stock's accessibility to international investors and enhance liquidity. The expected ₹3,510 crore in passive inflows could provide substantial support to the stock price while drawing attention from major global institutional investors. With a current market capitalisation of ₹2,84,251 crore and strong one-year performance of 29% compared to NIFTY 50's 12% return, Eternal appears well-positioned to benefit from increased index weighting.