Zomato shares rose about 3% on Monday as investors bought into the food delivery platform’s shares after the stock’s weighting in the FTSE index increased. Shares of Zomato were trading 1.5% higher at Rs 55.3 on the BSE at 9.38 am.

“The FTSE will increase Zomato’s investable weight from 17.2% to 24.9%,” said Abhilash Pagaria of Edelweiss Alternative & Quantitative Research.

Pagaria explained that an investable weight factor is a unit that shows how much of a company’s total shares are available for investors o freely trade on the stock exchange. He added that it is primarily used to calculate market capitalization under the free float method.

He expects to buy between 19 and 20 million shares at the close on August 10. Exchange-traded funds or mutual funds that mimic these indices may buy.

Indices that will witness an increase in Zomato’s weight are the FTSE World Index, the FTSE MPF Global Index, the FTSE Global Large Cap Index and the FTSE Emerging Index.

According to the BSE’s shareholding model, mutual funds hold a 2.4% stake in Zomato as of June 2022, while foreign portfolio investors (FPIs) hold a 9.85% stake.

Samir Arora, founder and fund manager of Helios Capital, still believes in troubled Zomato, which has rebounded from the lows of the past month.

Arora sees Zomato as a “guaranteed survivor,” adding that he’s also happy with the stock’s listing price.