Shares of Zomato rose about 3 percent on Monday as investors bought shares of the food delivery platform after the stock’s weightage in FTSE indices was increased.

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At 9:38 am, shares of the food delivery company were trading 1.5 percent higher at Rs 55.3 on the BSE.

“FTSE will increase investability weight for Zomato from 17.2 percent to 24.9 percent,” said Abhilash Pagaria of Edelweiss Alternative & Quantitative Research.

Investible weight factor is the unit that shows how much portion of a company's total shares is available to the investors for trading freely on the stock exchange, Pagaria explained. He added that it is mainly used in computing market capitalisation under the free-float methodology.

He sees a buying of 19-20 million shares at the close of August 10.

Buying is likely by exchange-traded funds or mutual funds that mimic these indices.

The indices that will witness an increase in weightage for Zomato are FTSE All-World Index, FTSE MPF All-World Index, FTSE Global Large Cap Index and FTSE Emerging Index.

Mutual funds owned 2.4 percent stake in Zomato as of June end of 2022, whereas foreign portfolio investors (FPIs) held a 9.85 percent stake, as per shareholding pattern on BSE.

Samir Arora, Founder & Fund Manager of Helios Capital, still believes in the beleaguered Zomato, which has recovered from its lows in the past month.

Arora believes Zomato "is a guaranteed survivor" and adds that he was happy with the listing price of the stock too.

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