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.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.