Swiggy investors approve foreign ownership cap

Swiggy shareholders have approved a proposal to cap foreign ownership at 49.5%, strengthening the food delivery and quick commerce firm’s bid to qualify as an Indian-owned and controlled company.

The proposal was cleared at the company’s annual general meeting on Tuesday. Swiggy informed stock exchanges that all resolutions in its July 23 AGM notice were passed with the required majority.

The foreign ownership cap received overwhelming support, with 99.9996% of votes in favour and 0.0004% against.

The limit will apply to total foreign ownership on a fully diluted basis. Swiggy had earlier said this includes foreign portfolio investors, non-resident Indians, and foreign-owned or controlled Indian companies and investment vehicles across all routes, except the non-repatriation route.

The approval is significant because Swiggy’s disclosure on July 7 merely reflected its ownership position at the time. The company had said foreign investment stood at 49.76% as of July 6 and clarified that it did not alter its ownership or control status, management, business operations, voting rights or shareholder rights.

A formal cap, however, creates a permanent ceiling that can prevent foreign shareholding from rising above the threshold through market transactions.

Shareholders also approved amendments to Swiggy’s Articles of Association as part of the company’s broader effort to qualify as an Indian-owned and controlled company under foreign exchange laws. The changes include the deletion of certain individual and institutional board nomination rights and revisions to nomination rights of specified resident individuals.

The move has implications for quick commerce. Foreign-funded e-commerce companies in India are permitted to operate marketplace models, but inventory-led e-commerce remains restricted for companies with foreign investment.

For Swiggy, Instamart remains the key business to watch. An Indian-owned and controlled structure could provide greater flexibility in organising sourcing, inventory and investments across subsidiaries, although the company has not indicated any plan to shift Instamart to an inventory-led model.

The vote reverses the outcome of May, when shareholders rejected a proposal linked to board nomination rights after it failed to secure the 75% approval required.

Source: The Times of India