Swiggy has moved closer to a major change in its ownership and governance structure after shareholders approved key proposals that could allow the food and grocery delivery company to qualify as an Indian-owned and controlled company (IOCC). The resolutions were cleared at Swiggy’s annual general meeting on Tuesday, marking an important turnaround after some of the proposals had failed to receive the required shareholder support earlier this year.

The approvals are particularly significant for Instamart, Swiggy’s quick commerce arm, as the company seeks to shift the business to an inventory-led model. Such a structure can give operators greater control over their supply chains and potentially improve margins.

Swiggy had previously faced a setback when certain proposals, including amendments to its articles of association, failed to secure the necessary approval. The changes were designed to give cofounders Sriharsha Majety and Phani Kishan Addepalli the right to nominate directors to the board, helping ensure that Indian shareholders retain majority representation.

At Tuesday’s meeting, the proposal received overwhelming backing, with 93.96 per cent of shareholders who voted supporting the resolution.

This represents a sharp reversal from the company’s extraordinary general meeting on May 21, when the same proposal narrowly missed the 75 per cent supermajority required for approval.

Shareholders have also approved a proposal to restrict foreign ownership in Swiggy to 49.5 per cent. Following the approval, the company can approach the Reserve Bank of India for permission to establish the proposed foreign shareholding ceiling.

What The IOCC Status Means For Instamart

The combined approvals are expected to pave the way for Swiggy to seek IOCC status. This could have a direct impact on the way Instamart operates its quick commerce business.

Once the necessary regulatory clearances are obtained, Instamart can transition towards an inventory model. Swiggy’s rival Eternal, which operates Blinkit, already has IOCC status and runs its quick commerce operations under an inventory-led structure.

Under an inventory model, a company has greater control over the procurement, storage and movement of products. For a business operating in the highly competitive quick commerce segment, greater control over the supply chain can potentially support operational efficiency and profitability.

Swiggy had indicated in its July 30 quarterly shareholders’ letter that the transition could take between two and four quarters after shareholder approval.

“We do not expect any disruption to the customer experience or to our supply relationships during this period, and our teams have been preparing the operational groundwork in parallel so that we are ready to move in a seamless fashion once we receive the necessary approvals,” it had said.