Swiggy board caps foreign ownership at 49.5%

Swiggy on Thursday said its board has approved a proposal to cap the company's aggregate foreign ownership at 49.5% on a fully diluted basis, as part of its endeavour to qualify as an Indian-owned-and-controlled firm.

The proposal will now be placed before shareholders for approval through a special resolution at the company's 13th Annual General Meeting (AGM) on August 18, a regulatory filing said.

The IOCC (Indian owned and controlled company) status would allow Swiggy to directly own and sell inventory through its quick commerce brand Instamart, a move expected to improve margins and strengthen supply chain control.

Rival Blinkit, owned by Eternal, follows an inventory-led model.

The food delivery and quick commerce firm has been trying to qualify as an IOCC. In May, Swiggy failed to secure the requisite shareholder approval to alter its Articles of Association, through which it had aimed to qualify as an IOCC.

Besides greenlighting the foreign ownership cap proposal, Swiggy's board also approved an alteration to the Articles of Association (AoA) to align with India's FEMA norms and proposed to reclassify its authorised preference share capital as authorised equity share capital, subject to shareholders' approval.

"As part of the company's broader endeavour to qualify as an Indian owned and controlled company (IOCC) under the applicable foreign exchange laws, the company proposes to amend its AoA," the regulatory filing said.

The key amendments include deletion of certain existing individual and institutional nomination rights, revision and inclusion of the nomination rights of specified resident individuals, clarification of the conditions governing the exercise and cessation of such rights, and consequential changes to the relevant definitions and provisions of the AoA, it added.