Blinkit & you miss it! FIIs said no to Eternal, retail said wait; who said yes?
ADVERTISEMENT Foreign institutional investors (FIIs) have been relentlessly cutting their Eternal stake, with FII holding tumbling from 44.4% to 42.3% in the June quarter alone, marking the seventh consecutive quarter of foreign selling. In March 2024, foreigners owned a commanding 55.1% stake.
The company had earlier capped foreign ownership at 49.5% to pave the way for Blinkit to move away from a pure marketplace model and start holding inventory directly, but FIIs were already heading for the exits.
Retail investors weren't far behind in their pessimism. Individual shareholders with nominal holdings up to Rs 2 lakh reduced their stake from 6.40% in March 2025 to 5.50% in June quarter. The retail investor count itself crashed from 27,49,779 to 24,57,980 in just three months—nearly 300,000 investors throwing in the towel.
Also Read | Eternal share price target goes up to Rs 400! What brokerages said after Q1 results But while FIIs and retail were selling, mutual funds were quietly building their war chest. MF ownership in Eternal surged from 15.5% in December 2024 to 21.6% in June 2025, a massive vote of confidence that's now paying spectacular dividends.
ADVERTISEMENT Part of the MF optimism stemmed from passive fund buying following Eternal's inclusion in the Nifty from March 2025, but active fund managers also clearly spotted the Blinkit opportunity.The Q1 results vindicated the MF strategy spectacularly. Blinkit surprised with 140% year-on-year growth in GMV, prompting Goldman analysts to declare that "the Street is under-appreciating market share gains for Blinkit over the next 2-3 quarters as competition focuses on improving profitability, with potential for further share gains beyond FY26 on the back of the new 3k store guidance."
ADVERTISEMENT Blinkit management's revelation that it will transition to an inventory-led model over the next 2-3 quarters after becoming an IOCC (Indian owned and controlled company) sent analysts into overdrive. This transition would aid approximately 100 basis points of margin expansion and increase working capital days from around 5 days currently to around 18 days.Jefferies, while upgrading the stock to buy, admitted it "overestimated the competitive threat." The brokerage handed out one of the highest target prices of Rs 400, saying: "Eternal is a play on the growing food services industry in India and increasing adoption of digital commerce. With only approximately 23 million monthly transacting users currently, Eternal's food delivery has a long runway for customer acquisition and revenue growth. Blinkit is the market leader in the fast-growing quick-commerce space and is set to see sharp margin improvement in the steady state."
ADVERTISEMENT Emkay analysts echoed the bullish sentiment: "QCom has a long growth runway and Blinkit is seen capitalizing well on this. As QCom is currently in the 'landgrab' phase, we believe EBITDA breakeven for Blinkit is still some time away. Food delivery is likely to remain a cash cow for the company, and we expect the business to see 20%+ EBITDA CAGR over the long term."
Also Read | Blinkit beats Zomato in NOV terms: 10 key takeaways from Eternal Q1 results
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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