Shares of Swiggy dropped as much as 7.8% to ₹242.60 during intraday trading on the BSE following the company’s board approval of a proposal to cap aggregate foreign ownership at 49.5%. The stock later pared some losses, trading 5.29% lower at ₹247.75, valuing the company at ₹68,303 crore ($7.1 billion), according to inc42.com.
The board’s approval marks Swiggy’s renewed effort to qualify as an Indian-owned and controlled company (IOCC) under the Foreign Exchange Management Act (FEMA). The company will now seek shareholder approval for the proposal. Earlier this month, Swiggy disclosed that foreign ownership had declined to 49.76%, nearing the proposed cap. The move aims to provide greater regulatory flexibility in investments and operations in sectors with foreign investment restrictions, inc42.com reported.
This is Swiggy’s second attempt this year to impose a foreign ownership cap after shareholders rejected a similar resolution in May. The IOCC status is critical as Swiggy plans to shift its quick commerce arm, Instamart, from a marketplace to an inventory-led model to compete with rivals like Blinkit, which has already made this transition. The foreign ownership cap is part of Swiggy’s broader strategy to strengthen its position in the competitive quick commerce segment, inc42.com noted.
Swiggy’s next step involves obtaining shareholder approval for the foreign ownership cap proposal. The company’s move to qualify as an IOCC is expected to influence its operational and investment strategies under FEMA regulations, with the valuation standing at ₹68,303 crore as of the latest trading session, according to inc42.com.