Mumbai: Shares of Swiggy climbed more than 7 per cent on Thursday after investors welcomed the possibility of the company qualifying as an Indian Owned and Controlled Company (IOCC), a move that could significantly reshape its quick-commerce business, Instamart.

The stock touched an intraday high of ₹280.05 before trading around 5 per cent higher at ₹274.96, compared with its previous close of ₹261.41.

Domestic ownership crosses key milestone

Swiggy recently disclosed that its aggregate foreign investment had fallen to 49.76 per cent of its fully diluted equity capital as of July 6. This means domestic investors now hold more than 50 per cent of the company for the first time.

The development has fuelled expectations that Swiggy could eventually qualify as an IOCC under India’s foreign investment regulations.

Why IOCC status matters

If Swiggy secures IOCC status, Instamart could potentially adopt an inventory-led business model instead of operating solely as a marketplace.

Such a model would allow the company to purchase products directly, manage inventory across its dark stores and gain greater control over procurement, pricing and product availability.

Brokerage firm Investec believes this transition could improve Instamart’s profitability and strengthen its competitive position against rivals. It noted that a similar inventory-led model helped Blinkit expand its adjusted EBITDA margins over recent quarters.

Challenges still remain

Despite the optimism, Swiggy has clarified that crossing the 50 per cent domestic ownership mark does not automatically make it an IOCC. Under Indian regulations, the company must also satisfy the requirement of being under domestic control.

A previous proposal to amend the company’s Articles of Association to meet this condition received 72.3 per cent shareholder approval, falling short of the required 75 per cent.

While some brokerages believe Swiggy may attempt to pass the resolution again, others remain cautious, noting that regulatory approval and governance changes are still needed before any transition can take place