Eternal Ltd, formerly known as Zomato, is preparing to overhaul Blinkit's operating model by taking direct ownership of inventory – a move now feasible after receiving board approval to be classified as an Indian-owned and controlled company (IOCC), the company indicated in a letter to shareholders.
The company’s board recently cleared its proposal to cap total foreign shareholding at 49.5 percent on a fully diluted basis, clearing the way for Eternal to comply with foreign direct investment (FDI) norms required for owning inventory in sectors like quick commerce.
This allows Blinkit to move from a pure marketplace model to one with tighter control over supply chains, product selection, and margins.
“As an IOCC, we now have the option to also own inventory in the quick commerce business,” Eternal CFO Akshant Goyal said in the letter. “We believe that is important, and is another concrete step towards making our business more resilient in the long term.”
Goyal added that even under a full inventory-ownership model, Blinkit’s working capital requirement for FY25 would remain under Rs 1,000 crore – roughly 5 percent of its projected net order value (NOV) of Rs 22,000 crore – thanks to high inventory turnover.
“We expect working capital investments in the context of the overall scale of the business to be fairly low,” he said, noting that returns on capital deployed would remain healthy.
Blinkit CEO Albinder Dhindsa added the shift could lead to “some margin expansion” depending on how much of the NOV moves to the new model. But he cautioned that intensifying competition could absorb those gains.
“Being conservative, I am hesitant to change the stated long-term adjusted EBITDA margin guidance of 5-6 percent of NOV just yet,” he said.
The shift comes as rivals in India’s rapidly growing quick commerce space double down on their own playbooks. Zepto, for instance, has been rapidly raising domestic capital in a bid to increase Indian ownership.
In late 2024, the company raised $350 million from local family offices and institutional investors, including Motilal Oswal’s private wealth arm. The company has raised over $1.3 billion over the last year as it races to meet IOCC norms and expand its dark store footprint. In fact, the company is in talks to raise another large funding round from domestic investors to bolster its cap table, ahead of its planner initial public offering, Moneycontrol reported earlier.
For Eternal, the planned pivot at Blinkit signals a deeper push into building a fully integrated quick commerce engine – one that’s better equipped to navigate regulatory constraints, pricing pressure, and shifting consumer expectations.
This comes at a time when competitive intensity in the quick commerce market continues to rise, with quick delivery and e-commerce operators expanding rapidly to claw away market share from their rivals.
In fact, Eternal’s top management expects competition to further intensify in the near-term, even from next-day delivery players.
“On Amazon and Flipkart, you can see that a lot of products are actually delivered on the same day in 4-6 hours. That is also, in some ways, going to compete with the quick commerce business that we have,” Dhindsa said in an analyst call while announcing the company’s Q4 FY25 results.
The company will, however, keep up its aggressive expansion strategy even if its at the cost of near-term profits, said Goyal.
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