Food delivery company Swiggy share price was under pressure in early trade on Friday, with the stock falling as much as 5.58% to an intraday low of Rs 247 per share, nearing its 52-week low of Rs 235.85.
At 9:30 am, Swiggy shares were trading 5.39% lower at Rs 247.50 apiece. By comparison, the BSE Sensex was trading at 75,831, down 0.73%.
The decline came after the company's board approved a cap of 49.5% on aggregate foreign ownership on a fully diluted basis. The proposed limit covers foreign investors, including foreign-owned or controlled Indian entities, foreign portfolio investors (FPIs) and non-resident Indians (NRIs), excluding investments made through the non-repatriation route.
The company said the proposal will require shareholder approval and entails amendments to its Articles of Association.
Following the development, UBS maintained its 'Buy' rating on Swiggy with a target price of Rs 355 per share.
According to the brokerage, the proposed foreign ownership cap would facilitate inventory ownership compliance and could support a 50-70 basis point improvement in Instamart's EBITDA margins over time.
UBS, however, noted that the 49.5% limit leaves limited headroom for additional foreign investors, even as it enhances the company's strategic and operational flexibility.
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