- Swiggy shareholders approved moving towards becoming an Indian-owned company
- The approval allows a 49.5% foreign ownership cap for IOCC classification
- Current foreign investment is about 49.76% of Swiggy's total paid-up equity
Swiggy shareholders have approved a proposal to move the company towards becoming an Indian-owned and controlled company (IOCC), marking a significant step in the food delivery and quick-commerce major's efforts to strengthen domestic ownership and control.
The proposal had been rejected by shareholders in May. The latest approval allows the company to proceed with a 49.5% foreign ownership cap, bringing Swiggy closer to meeting the requirements for IOCC classification.
The move is significant for Swiggy as achieving IOCC status could provide greater operational flexibility under India's foreign investment rules and potentially give the company more room to pursue a path towards profitability. Swiggy disclosed that aggregate foreign investment in the company stood at approximately 49.76% of its total paid-up equity share capital on a fully diluted basis as of July 6.
However, the company clarified that the current foreign ownership level does not by itself change Swiggy's ownership or control status. Company Secretary and Compliance Officer Cauveri Sriram said the current shareholding does not affect the company's share capital, management, business operations, voting rights or rights attached to equity shares.
Swiggy added that any material development would be disclosed as required under applicable laws.
Under current Foreign Exchange Management Act rules, a company can qualify as an IOCC if more than 50% of its ownership is held by resident Indian shareholders and effective control rests with resident Indian citizens or eligible Indian entities.
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The proposed shift is particularly important for Swiggy because IOCC classification could provide greater flexibility under India's foreign investment framework. The company operates in food delivery and quick commerce, where foreign investment rules can impose restrictions on certain e-commerce business models, particularly for platforms holding inventory.
Becoming an IOCC could therefore give Swiggy greater flexibility in structuring and expanding its businesses while reducing some of the constraints associated with its foreign ownership profile. The company competes directly with Eternal, formerly known as Zomato, across food delivery and quick commerce.
Swiggy first outlined its intention to move towards IOCC classification in May.
At the time, the company said proposed changes to its board nomination framework were part of a broader effort to eventually qualify as an Indian-owned and controlled company.
The company had said the governance changes were being considered following queries from institutional investors regarding how the amendments would fit into Swiggy's long-term ownership and control structure.
Unlike several other Indian companies, Swiggy does not have an identifiable promoter group with a substantial stake or dominant board representation that could act as a built-in safeguard for domestic control.
As a result, Swiggy said it needed to establish an “appropriate governance architecture” that combines majority domestic shareholding with a board controlled domestically.
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