Indian Mutual Funds Double Down On Eternal Amid FII Selling Spree

Why It Matters

The ownership swing signals a broader shift toward domestic capital supporting high‑growth Indian tech firms, cushioning them from volatile foreign flows. It also underscores Eternal’s strong operational momentum, making it a bellwether for the country’s quick‑commerce sector.

Key Takeaways

• Mutual funds' stake rose to 28.9% from 16.4% in Q4 FY26.
• Large funds SBI and HDFC each hold over 3.5% of Eternal.
• Foreign ownership fell to 32.6%, a 14.7‑point drop.
• Eternal posted $12.3M profit, revenue $2B, driven by Blinkit.
• Blinkit received $54M infusion, scaling dark‑store network.

Pulse Analysis

The surge in domestic mutual‑fund ownership of Eternal reflects a decisive reallocation of capital as foreign portfolio investors retreat from Indian equities. Since the start of the US‑Iran conflict, foreign institutions have pulled roughly $18 bn—about ₹1.68 lakh cr—from the market, prompting a risk‑off environment. Indian mutual funds, insurance firms, and pension funds have stepped in, collectively adding over 12 percentage points to Eternal’s shareholding, thereby stabilising the stock amid heightened volatility.

Eternal’s financials validate the confidence of local investors. In Q3 FY26 the company posted a 73% year‑on‑year profit jump to $12.3 million, while revenue surged to $2 billion, largely on the back of Blinkit’s shift to an inventory‑led model. The quick‑commerce arm crossed the ₹10,000 cr (≈$1.2 bn) quarterly revenue mark and turned adjusted EBITDA positive for the first time. A $54 million capital injection in early 2026, following a $313 million spend in 2025, is earmarked for expanding dark‑store infrastructure to fend off intensifying competition.

Strategically, the ownership transition and operational upside position Eternal as a flagship of India’s tech‑driven growth narrative. The departure of major sovereign investors like Kuwait Investment Authority and Antfin Singapore, contrasted with the steady hand of domestic funds, suggests a longer‑term, home‑grown support base. Coupled with leadership change—founder Deepinder Goyal handing the CEO reins to Blinkit chief Albinder Dhindsa—the company is poised to capitalize on domestic consumption trends while navigating a market increasingly insulated from foreign sentiment.