Swiggy shareholders have approved a 49.5% cap on aggregate foreign ownership, enabling the company’s quick-commerce arm Instamart to transition from a marketplace model to an inventory-led model. This approval, announced in early August, allows Swiggy to qualify as an Indian-owned and controlled company (IOCC), a key regulatory requirement for the shift, according to medianama.com.
The board initially proposed the foreign ownership cap in July after an earlier resolution was rejected in May. The new cap limits foreign ownership on a fully diluted basis and amends the Articles of Association to comply with India’s foreign-exchange rules. As of July 6, foreign investors held 49.76% of Swiggy, while domestic ownership was 50.24%. The shareholder approval clears the path for Swiggy to meet the ownership and control criteria necessary for the transition, medianama.com reported.
The move to a first-party inventory model allows Swiggy to directly own and sell inventory through Instamart, giving it greater control over procurement, inventory, and supply chains. This is expected to improve Instamart’s margins, with an ICICI Securities estimate projecting a margin improvement of about Rs 4-5 per order, or roughly 80 basis points in contribution margin. The shift could enhance Swiggy’s competitiveness in the fast-growing quick-commerce sector, medianama.com noted.
Swiggy expects Instamart to complete the transition to the inventory-led model within two to four quarters following shareholder approval. This timeline was detailed in a Capital Markets Day document shared on August 6, as reported by medianama.com.