Index provider MSCI will remove Swiggy from its Global Standard and Mid Cap Indices effective September 7, 2026, the company's index review has determined. The decision follows a move by the food delivery platform's shareholders to cap foreign ownership in the company at 49.5%.

The restriction on foreign shareholding was the decisive factor in the deletion. MSCI applies foreign inclusion factor adjustments when foreign room in a stock becomes limited, and a sufficiently low foreign ownership ceiling can result in a security being dropped entirely from the Global Standard Index universe. Under MSCI's methodology, a foreign room threshold below roughly 15% of shares can trigger a reduction or halving of the foreign inclusion factor, while room below about 5% generally makes a security ineligible for standard index inclusion — meaning Swiggy's 49.5% ceiling, while not prohibiting foreign investment outright, sits below the level MSCI requires for full standard-index treatment once actual foreign holding is taken into account.

News of the removal weighed on the stock, with Swiggy shares falling 3.53%.

Foreign ownership limits are a recurring consideration for Indian stocks in MSCI's indices, as Indian regulations cap foreign direct and portfolio investment in many companies. When companies set or tighten such caps, index-trackers must adjust, and removal from major benchmarks can affect passive fund flows that replicate MSCI products. Such deletions have precedent in India: companies in which foreign room contracted sharply have previously been dropped or downgraded within MSCI's index framework, requiring exchange-traded funds and index funds benchmarked to MSCI products to sell the affected shares around the effective date.

Swiggy, operator of one of India's largest food delivery platforms, listed on Indian stock exchanges in November 2024. Its shares will cease to be part of the affected MSCI indices from September 7, 2026. Whether the stock re-enters MSCI's standard universe in future quarterly or semi-annual index reviews would depend on changes to its foreign ownership structure and the resulting foreign inclusion factor at the time of review.

Source: CNBC-TV18