When does holding a winning investment stop making sense?

Info Edge's investments in Eternal (formerly Zomato) and Policybazaar have multiplied into one of India's biggest venture capital success stories. Yet soaring valuations, leadership changes, tax implications and concentration risk raise an important question: should the company stay invested for future gains or begin unlocking value for shareholders?

Info Edge has no say in how Zomato runs. Yet it deliberately chose to be a passive investor, not a strategic one. Info Edge's Annual Report FY25 is explicit about the organisation maintaining an arm's-length relationship with portfolio operations. It describes its holding period horizon as typically over 10 years or longer.

A review of Info Edge and its investment portfolio's latest financial statements suggests that it should continue to hold for now, but with triggers. It is approximately 40% fund and 60% operating company. The parent company's investment portfolio has legs to grow. However, tax considerations and internal governance issues suggest that the company may eventually need an exit plan as well.

Berkshire Hathaway operates differently. It acquires subsidiaries and uses their operating cash flows to fund future investments. Info Edge is not trying to run these companies or influence their strategy in the same way. It is more like a patient venture capitalist that invested early and is waiting. This distinction is important because the value of holding these investments is entirely financial. Info Edge receives no strategic benefit from owning roughly 12% of Eternal and PB Fintech.

The core operating business justifies holding on its own. Info Edge has a market capitalisation of ₹83,307 crore, with its Eternal stake valued at ₹25,431 crore and its PB Fintech stake valued at ₹7,877 crore. Together, these investments account for approximately 40% of the company's market value. In lay term, if an investor buys ₹100 worth of Info Edge stock, around ₹40 represents ownership of Eternal and Policybazaar shares.

The combined market value of Eternal and Policybazaar is ₹33,308 crore. The original cost of investment was ₹483.78 crore and ₹238.54 crore respectively. The portfolio return multiple suggests that Info Edge has generated approximately a 46x return on its investment over a decade. In other words, every ₹1 invested became ₹46. This transformed an invested amount of ₹722 crore into ₹33,308 crore.

Despite the concentration of capital in listed investments, the market still assigns significant value to Info Edge's operating business. After stripping away investments and cash, its core business trades at a price-to-earnings ratio of approximately 30.7x. This is a meaningful valuation for Naukri and suggests that the operating business can stand on its own. It is healthy, but not excessive. Stub valuation for the core business implies a value of approximately ₹45,036 crore, covering Naukri, 99acres, Jeevansathi, and over 110 other businesses.

Info Edge has accumulated capital gains of approximately ₹32,586 crore. Assuming a long-term capital gains tax rate of 12.5%, selling both stakes would trigger roughly ₹4,073 crore in taxes. The resulting net proceeds of approximately ₹29,235 crore would still be enormous. Tax reduces proceeds modestly but is not a structural barrier to monetisation.

Today, if an investor buys ₹100 of Info Edge stock, approximately ₹40 represents Eternal and Policybazaar shares, ₹54 represents its own operating businesses, and ₹6 represents cash.

Do These Companies Have the Legs to Grow in Profit and Valuation?

It only makes sense to hold listed investments such as Eternal and Policybazaar if they possess meaningful long-term growth potential. The available evidence suggests they do.

Blinkit currently operates at an Adjusted EBITDA margin of only 0.3%. This means that for every ₹100 worth of goods sold, it generates only about 30 paise in operating profit. The quick-commerce business is not meaningfully profitable yet. In Q4 FY26, Blinkit processed ₹14,386 crore of orders but generated only ₹37 crore of Adjusted EBITDA.

However, Delhi NCR has emerged as a mature market, where management indicates margins are approaching 5-6%. If Blinkit eventually scales nationally at similar economics, it could generate approximately ₹700-800 crore of quarterly profit.

For perspective, Info Edge reported profit of ₹1,469 crore last year. If Blinkit successfully reaches mature-market economics nationally, it could eventually generate more profit than Info Edge's current earnings base.

In Eternal's Q4 FY26 Shareholders' Letter, DeepinderGoyal argued that AI chatbots cannot deliver groceries or food. He noted that general-purpose AI interfaces are useful for answering questions but are less effective at supporting high-frequency habit-based transactions. He pointed out that Google attempted similar commerce initiatives without success. Eternal's competitive advantage lies in its physical infrastructure: 17 million square feet of dark stores and over one million delivery partners.

Nevertheless, Eternal faces governance risk. DeepinderGoyal stepped down as CEO in February 2026, with Blinkit founder AlbinderDhindsa assuming the role. Founder transitions are always significant events in growth companies.

GLP-1 drugs such as Ozempic and Wegovy have created concerns about reduced food consumption in Western markets while costing $ 800 to $ 1000. However, Eternal's customer base primarily consists of urban middle-class consumers ordering meals below ₹250. This demographic is not currently the primary GLP-1 adoption segment, even in markets where such drugs are widely available.

Policybazaar operates in a fundamentally different market. India remains significantly under-penetrated in insurance. Insurance penetration stands at approximately 3.7%, compared with a global average of roughly 11%. This creates a potential multi-decade growth runway.

Policybazaar's competitive advantage is trust. Many customers pay premiums for years without ever making a claim. Policybazaar's role as a distributor is to convince healthy consumers to buy insurance despite the possibility they may never use it. According to PB Fintech's Q4 FY26 earnings call, renewal income reached ₹1,126 crore during the quarter, growing 63% year-on-year.

YashishDahiya explicitly stated that "our renewals is a large contributor to our future growth of profits." This is recurring revenue. Once a customer purchases a policy, annual renewals become a compounding stream of income that requires minimal customer acquisition spending.

Furthermore, Info Edge founder Sanjeev Bikhchandani stated during the Q1 FY26 earnings call that the company would sell only if the holding generated less value than alternative uses of capital. This suggests management continues to believe substantial upside remains in its listed portfolio.

The Case to Sell: Why Holding Is Risky

There are also solid reasons to consider monetisation.

Last year, Info Edge's total comprehensive income declined sharply from ₹14,751 crore to ₹2,502 crore. The Annual Report's Management Discussion and Analysis section attributed this primarily to changes in the market valuation of Eternal shares.

In other words, Info Edge's reported profits increasingly reflect fluctuations in Eternal's share price rather than the performance of Naukri or its operating businesses. When Eternal's stock declines, Info Edge's reported earnings can appear weak even if the core business remains stable.

The tax argument cuts both ways. The original investment cost was ₹722 crore. The current market value is ₹33,308 crore. Capital gains amount to approximately ₹32,586 crore. At a 12.5% long-term capital gains tax rate, the tax liability would be roughly ₹4,073 crore. Net proceeds would still equal approximately ₹29,235 crore.

The challenge is that continuing to hold avoids immediate taxation but also leaves ₹33,308 crore concentrated in businesses where Info Edge lacks control. If Eternal and PB Fintech were to decline by 30%, Info Edge would lose nearly ₹10,000 crore in value, more than double the tax bill. The tax cost is certain; future upside is not.

Founder departures are a major risk factor for growth companies. DeepinderGoyal's resignation as CEO in February 2026 introduces uncertainty regarding leadership continuity. Although he remains associated with the company, he is no longer running day-to-day operations.

Info Edge's gross legal holding in PB Fintech through direct ownership and Makesense Technologies is approximately 19.04%. However, 49.99% of Makesense Technologies is owned by MacRitchie Investments, a subsidiary of Temasek. This reduces Info Edge's effective economic ownership to approximately 12.52%. In simple terms, Info Edge does not enjoy full economic ownership of even its headline 19% stake.

The Holding Company Problem

Prosus created enormous value by holding Tencent for decades. However, investors could effectively buy Tencent more cheaply through Prosus because the company traded at a substantial discount to NAV. Prosus addressed this by selling small portions of Tencent and using the proceeds to buying back its own shares, thereby increasing NAV per share and reducing the discount.

Info Edge faces a similar challenge. It owns more than ₹33,000 crore of listed investments that currently generate no meaningful cash dividends, yet it has done little to unlock value.

Info Edge's asset base consists of approximately ₹33,308 crore in Eternal and PB Fintech, ₹45,036 crore in operating businesses, and ₹4,963 crore in cash. Combined, this totals roughly ₹83,307 crore, or around ₹961 per share.

A holding company is effectively a sealed box of assets. Investors rarely pay full value for such a box because it cannot be easily unlocked. Selling investments creates tax costs. Info Edge has no control over portfolio companies and receives limited direct cash flow from them. Consequently, markets often apply a holding company discount.

Prosus addressed this problem proactively. SoftBank illustrates the opposite risk. Interestingly, SoftBank's value creation depends on OpenAI. If that investment disappoints, a large portion of SoftBank's valuation could be affected.

Similarly, Eternal represents a substantial proportion of Info Edge's NAV. The difference is that Tencent was already a mature, highly profitable company when it became Prosus' dominant asset. Blinkit remains early in its profitability journey. If Blinkit fails to achieve mature economics, concentration risk could become significant.

To date, Info Edge has largely chosen not to act. It has neither meaningfully reduced its stakes nor implemented a large-scale buyback strategy funded by portfolio monetisation. Nuvama's ₹961 target price suggests that the market currently applies little or no holding company discount. However, that assumption could change if growth slows.

The evidence supports holding today, but not indefinitely.

Blinkit's path toward a 5% margin could eventually translate into approximately ₹2,877 crore of annual EBITDA. Policybazaar's ₹1,126 crore renewal revenue base is compounding rapidly at 63% growth. The immediate tax cost of approximately ₹4,073 crore makes a full exit unattractive today.

The growth thesis therefore remains intact.

However, the investment case should be monitored carefully. If Blinkit fails to reach at least 3% margins by FY28, if Eternal experiences another major leadership disruption, or if Info Edge begins trading at a 25% or greater discount to SOTP for multiple quarters, management should consider selling a portion of its holdings.

Berkshire Hathaway can hold indefinitely because it receives substantial operating cash flows from controlled subsidiaries. Info Edge does not enjoy that advantage. Its stakes in Eternal and Policybazaar are financial investments rather than operating assets.

- Raj Chauhan, Kolkata

image Courtesy : Gemini

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