Policy · Commerce & Consumer Brands

Swiggy seeks IOCC status to revamp Instamart

By Startup Enthusiast · 23 July 2026

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Its board approved capping aggregate foreign ownership at 49.5% to qualify as an Indian-owned and controlled company under FEMA

The move aims to shift Instamart to an inventory-led model, following Blinkit's successful margin improvement

Shares fell over 5% on investor concerns that the cap could trigger selling by foreign shareholders

Swiggy's board approved capping aggregate foreign ownership at 49.5% to qualify as an Indian-owned and controlled company (IOCC) under FEMA.
The company is seeking shareholder approval for the foreign ownership cap.
Aggregate foreign ownership had already declined to 49.76% earlier this month.
Swiggy is reattempting to amend its Articles of Association to remove certain individual and institutional nomination rights and introduce revised nomination rights for specified resident individuals.
The board also approved reclassification of authorised preference share capital into authorised equity share capital, without changing overall authorised share capital.
IOCC status is expected to enable the shift of Instamart to an inventory-led model from a marketplace model.
Under the inventory-led model, Instamart would directly procure products from brands and sell them on its platform, replacing operating revenue with total net sales.
An earlier attempt in May to amend the AoA for IOCC compliance secured only 72.36% shareholder votes, below the 75% needed for a special resolution, forcing abandonment.

Blinkit's growth after shifting to an inventory-led model is cited as evidence that the move will elevate margins for Instamart and control net burn.
InGovern founder Shriram Subramaniam said Swiggy failed to communicate clearly to shareholders the rationale behind seeking IOCC status.
The move is part of a over-a-year-long effort; in May 2025 Swiggy launched a standalone Instamart app and later hived off Instamart into a step-down subsidiary.
Investor concerns that the foreign ownership cap could trigger selling by some foreign shareholders caused shares to fall over 5%.

Swiggy operates a food delivery marketplace connecting restaurants and customers.
It also runs Instamart, a quick-commerce service delivering groceries and essentials in minutes.
Instamart currently operates on a marketplace model where third-party sellers list products.
The company generates revenue from commissions, delivery fees, and advertising on its platform.
In FY26, Swiggy's operating revenue rose 50.8% to ₹23,053 Cr from ₹15,227 Cr in FY25.
However, its burn (losses) swelled 33% to ₹4,154 Cr from ₹3,117 Cr the previous year.
In Q4 FY26, loss declined 26% YoY and 24.9% QoQ, while revenue from operations rose 44.7% YoY to ₹6,383 Cr.

Swiggy will seek shareholder approval for the foreign ownership cap and related amendments to its Articles of Association.
If approved, IOCC status will enable the shift of Instamart to an inventory-led model.
Q1 FY27 financial results are due on July 30, 2026.