Mutual Funds Surge in Swiggy and Eternal, Signalling India's Pivot to Profitability

Mutual Funds Surge in Swiggy and Eternal, Signalling India's Pivot to Profitability​

The consumer internet landscape is undergoing a fundamental shift as domestic mutual funds rapidly increase their exposure to market giants like Swiggy and Eternal. These large-scale institutional investors are now among the most significant shareholders in both food delivery and quick commerce companies. This trend signals a growing confidence from Indian funds in these platforms' long-term stability and underlying business models.

Domestic Funds Take Control of Swiggy and Eternal​

Mutual fund ownership has seen dramatic growth at Swiggy, where exposure jumped nearly fourfold over the past year. The stake rose from 5.5 percent in March 2025 to 20.2 percent in March 2026. Similarly, mutual funds’ shareholding in Eternal climbed substantially, moving from 19.4 percent to 28.9 percent during the same period.

Major Indian fund houses are now prominently represented among the shareholders of both companies. This includes power players like SBI Mutual Fund, ICICI Prudential Mutual Fund, and HDFC Mutual Fund, Nippon India Mutual Fund, Kotak Mahindra Mutual Fund, UTI Mutual Fund, Aditya Birla Sun Life Mutual Fund, Mirae Asset Mutual Fund, and Invesco Mutual Fund.

Departure from Venture Backers: Trimming Stakes in Consumer Giants​

This shift marks a significant departure from the early years when global venture investors dominated the cap tables of these consumer internet firms. The growing presence of domestic funds suggests a change in investment philosophy.

While mutual funds are positioning themselves as long-term owners, early backers are seen trimming their holdings. Prosus reduced its stake to 21.1 percent from 25.4 percent. SoftBank, Tencent, Accel, and Elevation Capital also pared their existing stakes in the companies.

IOCC Strategy Drives Domestic Ownership Surge​

The acceleration of domestic ownership is partly linked to strategic filings such as the Secured Indian-Owned and Controlled Company (IOCC) status. This classification provides greater operational flexibility under foreign investment rules, enabling an inventory-led model.

Eternal secured this crucial classification in 2025, successfully transitioning its operations through Blinkit. Swiggy has recently disclosed that domestic ownership has risen to 50.24 percent as it works toward securing the same status.

The Profitability Pivot: A New Chapter for Indian Tech​

The changing ownership structure reflects a critical shift in how domestic institutional investors evaluate listed internet companies. Unlike earlier periods where growth at all costs often took precedence, analysts now emphasize profitability and cash generation.

Deepak Jasani of HDFC Securities notes that mutual funds have a longer investment horizon, enabling them to own companies that are approaching profitability or are poised to be market leaders. The focus is shifting from top-line growth alone to achieving EBITDA breakeven and robust free cash flow generation.

Foreign Portfolio Shifts Amidst Local Ascent​

While domestic ownership surged in both firms, foreign portfolio investor (FPI) activity showed mixed signs. In Swiggy’s case, FPI ownership rose to 14.1 percent from 4.7 percent as public market investors continued to accumulate the stock. Conversely, Category-I FPI ownership declined for Eternal, moving down to 29.2 percent from 38.6 percent.

This evolution suggests that India's consumer internet firms are entering a maturation phase. Domestic mutual funds are increasingly cementing their role as long-term owners, reflecting both the improving operational fundamentals and the increasing maturity of Indian capital markets.