Swiggy's aggregate foreign shareholding declined to 49.76% as of July 6, 2026, making it eligible to begin the process of qualifying as an Indian-Owned-and-Controlled Company (IOCC) under FEMA regulations.
According to a report by JM Financial, reducing foreign ownership below 50% is only one of the conditions for obtaining IOCC status and the company will also need to complete the requisite governance changes, including demonstrating that ownership and control vest with resident Indian citizens/entities.
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The brokerage also highlighted that based on interpretation of FEMA rules, eligibility for IOCC status is assessed using the ownership and control position as of March 31 of the previous financial year. As a result, even if governance-related changes are completed in the coming months, Swiggy is unlikely to qualify as an IOCC before March 2027, delaying any operational transition until April 2027 at the earliest.
The report said that if Swiggy formalises a cap on foreign holding below 50%, the residual foreign room available to incremental FPI buyers can shrink meaningfully, directly impacting its Foreign Inclusion Factor in the MSCI India Index and FTSE Global Equity Index and believes that Swiggy will need to further reduce its foreign ownership before capping it to avoid impact on index weightage.
Despite the regulatory milestone, JM Financial maintained its 'Reduce' rating on the stock with an unchanged target price of Rs 250.
"We ascribe zero value to Instamart, supply chain and platform innovation segments given the lack of visibility on a turnaround and the increasing probability of prolonged value destruction and continue to value the FD business at 35x adjusted EBITDA and the out-of-home segment at 25x EV/adjusted EBITDA, yielding a Jun’27E at a target price of Rs 250,” it said.
Instamart currently operates under a marketplace model. An inventory-led model offers several operational advantages over this.
The transition to an inventory-led structure would enable Instamart to procure merchandise directly from brands/manufacturers, eliminating reliance on third-party sellers and providing greater control over assortment, quality and product availability and expand into underpenetrated categories and SKUs that marketplace sellers may be unwilling to stock due to working-capital constraints.
It will further negotiate superior commercial terms with brands by leveraging its scale, introduce private labels and quick-commerce-specific SKUs with better pricing and margin economics and improve operating margins and cash flow conversion through better fill rates, lower wastage and tighter inventory management.
The management has in the past indicated that once Swiggy achieves IOCC status and Instamart transitions to an inventory-led model, its adjusted EBITDA margin can improve over 50‒70bps.
According to a filing with the exchange, Swiggy said that 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 clarified that this by itself does not result in any changes to the ownership or control status of the company, nor does it have any impact on the share capital, management, business operations, voting rights or rights attached to the equity shares.
As of March 31, 2026, based on data on the company’s shareholding pattern available on NSE, the company did not have any prominent promoter holding stake and nearly 527 foreign portfolio investors owned around 15% stake, while 5.21 lakh retail investors held around 6% stake. Nearly 33 mutual funds held more than 20% stake at the end of FY26, while 15 insurance companies held over 3% stake.
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