Swiggy Board Approves 49.5% Cap on Foreign Ownership to Qualify as Indian-Owned and Controlled Company
Key Takeaways
- •Swiggy's board has approved capping total foreign ownership at 49.5% to qualify the company as Indian-owned and controlled under FDI regulations.
- •The proposed cap and related amendments to the Articles of Association will require shareholder approval at the upcoming Annual General Meeting.
- •The Articles of Association changes involve deleting certain existing nomination rights and revising them for specified resident Indian individuals.
- •DPIIT defines an Indian-owned and controlled company as one where over 50% of equity is beneficially owned by Indian citizens or companies and a majority of directors are appointed by Indian residents.
- •Swiggy completed its initial public offering on Indian stock exchanges in November 2024 and competes with Zomato's Blinkit and Tata's BigBasket in the quick-commerce sector.
Swiggy's board of directors has approved a proposal to cap total foreign ownership at 49.5%, a move designed to help the food delivery and quick-commerce platform qualify as an Indian-owned and controlled company under applicable regulatory frameworks. The cap ensures that aggregate foreign investment remains below the majority threshold, a classification that carries significance under India's Foreign Direct Investment regulations, where the Department for Promotion of Industry and Internal Trade (DPIIT) defines an Indian-owned and controlled company as one in which more than 50% of equity is beneficially owned by Indian citizens or Indian companies and the power to appoint a majority of directors rests with Indian residents.
The board also approved proposed amendments to the company's Articles of Association to support this objective. Both proposals will now be presented to shareholders for approval at the upcoming Annual General Meeting (AGM).
The proposed changes to the Articles of Association include:
- Deletion of certain existing individual and institutional nomination rights.
- Revision and inclusion of nomination rights for specified resident individuals.
- Clarification of the conditions governing the exercise and cessation of such nomination rights.
- Other consequential changes to relevant definitions and provisions.
Swiggy, headquartered in Bengaluru, is one of India's largest online food delivery platforms and also operates a quick-commerce grocery segment under the Instamart brand. The company competes with Zomato-owned Blinkit and Tata's BigBasket in India's rapidly expanding quick-commerce sector, where multiple players are investing heavily in dark-store expansion and delivery-speed improvements. Swiggy is publicly listed on Indian stock exchanges, having completed its initial public offering in November 2024.
The article can be found on CNBC-TV18.
