Highlights
Swiggy Aiming for Indian Owned and Controlled Company Status
Swiggy is focusing on achieving Indian Owned and Controlled Company (IOCC) status, as the Bengaluru-based food delivery and quick commerce leader is in the process of reforming its board and governance framework in light of changes to foreign investment regulations. In a recent filing with the stock exchange, Swiggy explained that the adjustments to its board nomination process are part of a comprehensive strategy intended to meet IOCC requirements under FEMA regulations.
This clarification followed inquiries from institutional investors concerning the company’s recent postal ballot proposal and the motivations behind the suggested changes to its Articles of Association. Furthermore, Swiggy indicated that these modifications are aimed at reinforcing its long-term aim of attaining IOCC status when resident Indian ownership in the firm surpasses 50%, pending regulatory and shareholder approvals.
Understanding IOCC Requirements under FEMA
According to FEMA regulations, a business qualifies as an Indian owned and controlled company if both ownership and control lie with Indian residents or entities owned by Indians. In addition to majority Indian shareholding, retaining control at the board level and having nomination rights are critical for this classification.
Currently, Swiggy has a notable level of foreign investor involvement, with backers such as Prosus and SoftBank. The company acknowledged that it lacks a clearly identifiable promoter group with substantial board presence to maintain domestic control. As a result, it views the proposed governance adjustments as crucial to its IOCC aspirations.
Path to Achieve IOCC Status
However, Swiggy emphasized that these suggested amendments alone won’t instantly designate it as an IOCC. Further approvals and corporate measures will be essential to finalize this transition.
In the fourth quarter of FY24, Swiggy recorded a year-on-year revenue increase of 44.7%, amounting to Rs 6,383 crore, compared to Rs 4,410 crore in Q4 FY25. Concurrently, the company also reported a 26% reduction in its losses.