Proposal is part of the company’s renewed effort to qualify as an Indian-owned-and-controlled company, enabling Instamart to adopt an inventory-led model and align its governance framework with FEMA norms
Swiggy’s board on Thursday approved a proposal to cap the company’s aggregate foreign ownership at 49.5 per cent on a fully diluted basis, marking another step in its efforts to qualify as an Indian-owned-and-controlled company (IOCC). The proposal will be placed before shareholders for approval through a special resolution at the company’s 13th Annual General Meeting (AGM) on 18 August, according to a regulatory filing.
Obtaining IOCC status would allow Swiggy to directly own and sell inventory through its quick commerce platform, Instamart. The move is expected to enhance supply chain control and improve margins. Rival Blinkit, owned by Eternal, already operates an inventory-led model.
Swiggy has been attempting to secure IOCC status for several months. In May, the company failed to obtain the required shareholder approval to amend its Articles of Association (AoA), a key requirement in its bid to qualify as an IOCC.
In addition to approving the foreign ownership cap proposal, the board cleared amendments to the AoA to align the company’s governance framework with the provisions of the Foreign Exchange Management Act (FEMA). It also approved a proposal to reclassify its authorised preference share capital as authorised equity share capital, subject to shareholder 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 proposed amendments include removing certain existing nomination rights of individual and institutional investors, revising and introducing nomination rights for specified resident individuals, clarifying the circumstances governing the exercise and cessation of those rights, and making consequential changes to the relevant definitions and provisions of the AoA.
The proposed changes are intended to align Swiggy’s corporate structure with FEMA requirements and strengthen its eligibility for IOCC status, which would enable the company to adopt an inventory-led operating model f
or Instamart.
