Swiggy's board has approved a reduction in the aggregate foreign ownership limit from 100% to 49.5%, pending shareholder approval at the annual general meeting on August 18. This move could lead to Swiggy's exclusion from global indices, potentially resulting in $460 million in passive outflows.
The proposed restriction could make Swiggy ineligible for foreign ownership-constrained global indices. Its deletion from the MSCI Standard index could trigger passive outflows of about $340 million, equivalent to nearly 125 million shares or six days of average daily volume. A potential exclusion from FTSE indices could result in another $120 million of outflows, representing about 46 million shares or two days of average daily volume. Combined, the estimated selling pressure could reach $460 million, or roughly 171 million shares.
The company's board approved a 49.5% ceiling on aggregate foreign ownership and changes to its articles of association as it renewed its attempt to qualify as an Indian-owned and controlled company, or IOCC. Both proposals will be placed before shareholders as special resolutions at the August 18 AGM. If shareholders approve the ownership cap, Swiggy will also need to approach the Reserve Bank of India to formally restrict foreign shareholding to 49.5%.
Swiggy’s latest disclosed foreign holding is already close to the proposed limit. The company said on July 7 that aggregate foreign investment had declined to 49.76% as of July 6, while Indian ownership had increased to 50.24%. Foreign ownership, however, remains 0.26 percentage point above the proposed ceiling. Swiggy had also clarified that crossing the 50% domestic ownership threshold by itself did not change its ownership or control status, management or operations.
Indian ownership and control would allow Instamart to purchase inventory directly from suppliers, potentially giving Swiggy greater control over product selection, availability, and margins. Swiggy would also record the full sale value of goods it owns as revenue instead of recognising only marketplace fees.
Background
Swiggy's move to cap foreign ownership follows a similar decision by Eternal, the parent company of Zomato and Blinkit, which approved a foreign ownership ceiling in April 2025. This trend reflects a strategic shift towards Indian ownership and control, which could enhance operational flexibility and market competitiveness.
As Swiggy moves towards an Indian-owned and controlled company status, it will be crucial to monitor the shareholder meeting outcomes and regulatory approvals. The company's strategic shift could impact its market positioning and financial performance in the long term.
