Swiggy share price target: JM cites Eternal case on global index weights

JM Financial on Wednesday said while Swiggy's aggregate foreign shareholding has declined below the 50 per cent threshold for the first time -- a key prerequisite for qualifying as an Indian-Owned-and-Controlled Company (IOCC) under FEMA, it is not sufficient by itself.

The domestic brokerage said Swiggy Ltd will need to complete the requisite governance changes, including demonstrating that ownership and control vest with resident Indian entities. 

"As per our reading of official requirements, the test for IOCC eligibility is based on the ownership and control position at end-March of the previous fiscal year. Consequently, even if the required governance changes and foreign shareholding cap are completed over the next few months, IOCC transition is unlikely to happen before end-Mar’27," JM Financial said. 

Swiggy's aggregate foreign shareholding including FPI, FDI and other indirect foreign investment has declined to 49.76 per cent of fully diluted paid-up equity capital. If Swiggy formalises a cap on foreign holding below 50 per cent, the residual foreign room available to incremental FPI buyers can shrink meaningfully, directly impacting its Foreign Inclusion Factor in the MSCI India Index and FTSE Global Equity Index, JM warned. 

Eternal case & MSCI weights

JM Financial cited a similar impact when Eternal Ltd capped foreign ownership at 49.5 per cent in May 2025. 

"At that time MSCI assigned Eternal only a half weight in its index for several quarters and restored it to full MSCI weight only in the February 2026 review, once there was enough float available to foreign investors. We believe Swiggy will need to further reduce its foreign ownership before capping it to avoid impact on index weightage," it said.

JM said Swiggy needs to demonstrate that ownership and control are vested with resident Indian entities, which could require changes to board composition, voting rights and other control provisions under the Articles of Association, along with the necessary shareholder approvals. 

Even as the exchange filing clarifies that the reduction in foreign shareholding, by itself, does not alter Swiggy's ownership, control, management or operating structure and any material developments on this front will be disclosed separately. 

"Importantly, FEMA test for IOCC assessment eligibility can only happen on 31st March of the previous fiscal year as per our reading of official documents. Accordingly, even if governance changes are completed
over the next few months, Swiggy would not become eligible for IOCC status until the next assessment date, in our opinion," JM said.

Swiggy share price target

For now, JM Financial is ascribing zero value to Instamart, supply chain and platform innovation segments given the lack of visibility on a turnaround and the increasing probability of prolonged value destruction. 

It also excluded cash from its valuation, as continued losses will only deplete the balance of Rs 15,000 crore each passing quarter. 

"We continue to value the food delivery business at 35 times adjusted Ebitda and the out-of-home segment at 25 times EV/adjusted Ebitda, yielding a June 2027 target of Rs 250," JM said.