Eternal shares slip 4% after FTSE, MSCI cut stock weight; $840 million in passive outflows likely

Shares of Eternal, formerly known as Zomato, slipped 4% to an intraday low of Rs 227.95 on the BSE on Monday amid expectations of passive outflows worth $840 million following weightage cuts by global index providers FTSE and MSCI.

The revisions come after a reduction in the Foreign Ownership Limit (FOL) for the stock. In the FTSE All World Index, Eternal’s investability weighting has been slashed from 82.74% to 49.5%.

The FOL determines the extent to which foreign investors can hold a company’s shares. A reduction in this limit forces global…