Why Swiggy wants to stop being called ‘foreign-controlled’

Swiggy is looking to shed its “foreign-controlled” tag as the food and quick commerce major moves to qualify as an Indian Owned and Controlled Company (IOCC), a transition that could significantly reshape how it operates its fast-growing quick commerce business.

The Bengaluru-based company recently proposed amendments to its Articles of Association (AoA), aimed at streamlining governance and management control enabling easy inventory controlled. Foreign ownership in Swiggy is around 60% with Prosus holding over 30%, Softbank around 7% etc as per Tracxn with stakes changing.

But beyond boardroom restructuring, the move signals a larger strategic shift underway in India’s quick commerce sector, where inventory ownership is increasingly emerging as a key lever for profitability and scale.

Industry experts say the transition is less about optics and more about unlocking operational flexibility under India’s foreign direct investment (FDI) rules. Under existing regulations, companies with foreign ownership in multi-brand retail cannot directly own inventory and are required to operate through marketplace models.

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According to Satish Meena, founder of Datum Intelligence, “the economics of quick commerce are pushing companies towards local ownership structures.”

Recently, in the Q4 results, Swiggy its Gross Order Value (GOV) slipped sequentially to Rs 7,881 crore in Q4 from Rs 7,938 crore in the previous quarter. 

“In quick commerce, if you don’t own inventory, the margins are so low that you can’t make enough money out of it,” Meena said. “Blinkit has already shown the way that this is the route to take, and eventually Zepto could also move in a similar direction.”

The shift comes at a time when competition in quick commerce is intensifying and companies are under pressure to improve unit economics amid aggressive expansion. Experts say owning inventory allows platforms to directly procure from brands, negotiate better pricing, streamline supply chains and improve cash flows.

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“One, it simplifies the supply chain. Instead of a marketplace model, you are directly procuring from brands and selling to customers,” Meena explained. “Second, it supports your cash flow because the inventory moves faster. Every penny they save eventually adds to profitability.”

The move could help Swiggy gain greater operational freedom in scaling its Instamart business, especially as rivals race ahead in dark store expansion and customer acquisition. Blinkit, backed by Eternal Limited (formerly Zomato), has already emerged as the market leader.

However, IOCC status alone will not close the competitive gap as this is not the only differentiation between Blinkit and Swiggy. Even before Blinkit moved to this model, Swiggy was struggling with Instamart while Blinkit was executing much better.

Still, Swiggy’s move reflects a broader realisation across India’s consumer internet ecosystem that in quick commerce, regulatory structure and business model are increasingly becoming inseparable.