Swiggy has signalled that it is working constructively with all its shareholders to address their concerns and achieve a positive outcome
Becoming an IOCC remains an important long-term objective for Swiggy and it is aligned with the direction taken by “comparable companies” in India
The company also sought to clarify that the proposed amendments were not aimed at strengthening founder control over the company
About a week after failing to secure shareholder approval, listed foodtech major Swiggy has signalled that it is working “constructively with all its shareholders to address their concerns and achieve a positive outcome”.
For context, Swiggy had sought shareholder approval to amend its Articles of Association (AoA) to become an Indian-Owned and Controlled Company (IOCC). However, the proposal failed after securing only 72.36% votes in favour, falling short of the 75% threshold required for special resolutions.
The company said in an exchange filing today that becoming an IOCC remains an important long-term objective and is aligned with the direction taken by “comparable companies” in India. It added that the move is expected to create long-term shareholder value.
For Swiggy, the transition holds strategic importance as becoming an IOCC would eventually allow it to move its quick commerce business, Instamart, towards an inventory-led model. Under India’s FDI regulations, foreign-owned ecommerce marketplaces cannot directly own inventory unless they qualify as Indian-owned and controlled entities.
In the filing, Swiggy said it will continue engaging with shareholders and other stakeholders and will evaluate any future structural or strategic steps through “lawful, transparent and shareholder-aligned processes”.
The company also sought to clarify that the proposed amendments were not aimed at strengthening founder control over the company.
Under the proposal, cofounder and group CEO Sriharsha Majety would have gained the right to nominate one senior management professional to the board. A similar right was proposed for cofounder Phani Kishan Addepalli, subject to maintaining a qualifying economic interest in the company.
Swiggy clarified that neither founder would have the right to appoint any external individual to the board. It also stressed that the amendments did not create veto rights, affirmative voting powers, permanent board seats, quorum rights, committee nomination rights or any right to appoint a majority of directors.
Shareholders shot down the AoA amendments at Swiggy mainly because they believed the company was trying to preserve founder-level influence without founder-level ownership. Some of the concerns were:
- Shareholders did not reject Swiggy’s IOCC ambition itself — they rejected the governance structure attached to it. Investors were uncomfortable with founders getting board nomination rights despite relatively small shareholding.
- The proposed AoA changes became controversial because they bundled the IOCC transition with enhanced founder influence over board appointments. Proxy advisors and institutional investors saw this as disproportionate control.
- The failed vote comes at a bad time for Swiggy because Instamart is still burning cash aggressively. Investors may tolerate losses for growth, but not governance ambiguity alongside rising losses and a weak stock performance.
The governance concerns come at a time when Swiggy continues to post widening losses due to aggressive investments in Instamart.
In the fiscal year FY26, Swiggy’s loss widened 33% to a whopping ₹4,154 Cr from ₹3,117 Cr in the previous year. Operating revenue during the fiscal under the review rose 51% to ₹23,053 Cr from ₹15,227 Cr in FY25.
For Swiggy, moving its quick commerce business to an inventory led model is the next logical step. The move to become an IOCC will allow the company to take the step.
Shares of Swiggy ended today’s trading session 6.49% higher at ₹270.70.
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