On Tuesday, Swiggy informed the exchanges that its aggregate foreign ownership has fallen below the 50% mark as of July 6 — a significant step for the food delivery and quick commerce major to become an Indian-owned and controlled company (IOCC).
The IOCC status will allow Swiggy’s quick commerce arm Instamart to own inventory, thereby improving margins and supply chain control. However, while the foreign shareholding in the company has dropped to less than half, Swiggy has not yet achieved IOCC status.
ETtech explains the reasons why the status matters and how far Swiggy is from achieving it.
First, what’s IOCC and why does it matter?
As an IOCC, ownership and operational control of the company must rest with resident Indian citizens or eligible Indian entities. For this, the foreign shareholding of listed companies has to be kept below 50%, usually capped at 49.5% to leave a slight buffer.
This matters because it gives Swiggy more control over the company’s operations.
Under India’s foreign direct investment (FDI) rules, foreign-held ecommerce platforms are not allowed to own inventory or control sellers. Once Swiggy becomes an IOCC, it can own its inventory and buy directly from suppliers. Which will help the company have better margins.
Zomato and Blinkit parent Eternal , kids fashion and essentials brand FirstCry, and omnichannel beauty and fashion retailer Nykaa have become IOCCs to expand their in-house brands and have more control over their businesses.
Has Swiggy become an IOCC after Tuesday's announcement?
The simple answer is no.
In a company filing, Swiggy said, “...as of July 06, 2026, the aggregate foreign investment in Swiggy Limited, including foreign portfolio investment, foreign direct investment, and other indirect foreign investment, stands at approximately 49.76% of the total paid-up equity share capital of the Company on a fully diluted basis, as per data available from the designated depository.”
Swiggy, however, clarified that the dip does not change the company’s ownership and said any material development would be disclosed as required.
The Bengaluru-based company has become majority Indian-owned per Tuesday’s announcement, but it is yet to qualify as an IOCC.
For that to happen, along with the shareholding criteria, a majority of its board must comprise Indian directors. The company attempted to make this change in May, but shareholders voted it down.
Once that’s done, it must then apply to the Reserve Bank of India (RBI) to cap foreign shareholding at 49.5%.
How far is Swiggy from achieving this?
On the shareholders’ voting, Swiggy CEO Sriharsha Majety told ET, “We could have handled this better through engagement. Since the vote, we’ve been in touch with shareholders, and we already feel they have a much better understanding of the rationale. That’s why we feel very confident about this going through when we come back the next time.”
However, Majety did not give a timeline for this.
According to a recent JM Financial report, Swiggy’s IOCC transition is unlikely to happen before March 2027. “This in turn, would push out Instamart’s transition to an inventory-led model as per our understanding to April 2027 (at the earliest),” it said.
What about rivals Blinkit and Zepto?
Swiggy currently operates on a marketplace model, unlike rivals Eternal and Zepto.
After Blinkit’s parent Eternal became an IOCC last April, it moved to an inventory-led model. Since then, its earnings have increased as Blinkit recognises the entire value of goods sold as revenue.
IPO-bound Zepto, on the other hand, combines wholesale operations with a marketplace, recognising gross revenues from product sales alongside commissions, logistics, advertising, and other fees, which has led to regulatory questions from analysts and investors, ET reported on July 2 .
