Food and grocery delivery firm Swiggy’s plan to convert into an Indian Owned and Controlled Company (IOCC) hit an unexpected hurdle this week after a section of public institutional shareholders voted against the proposal. Investors also rejected the company’s bid to appoint chief financial officer Rahul Bothra and co-founder Phani Kishan to the board.
Swiggy told stock exchanges it had failed to win the shareholder approval needed to amend its Articles of Association, a key step in its efforts to qualify as an IOCC. It fell short after securing 72.36 per cent shareholder support, below the 75 per cent threshold required for approval. As a result, the proposed board appointments of co-founder Phani Kishan Addepalli and finance chief Rahul Bothra will not take effect on June 1. A separate resolution to appoint former Prosus executive Renan De Castro Alves Pinto as a non-executive, non-independent nominee director was approved with 98.98 per cent of votes.
“Given the outcome of the postal ballot, the proposed appointments will accordingly not take effect on June 1, 2026. The change in board composition is therefore limited to the appointment of Renan De Castro Alves Pinto as a non-executive, non-independent nominee director of the company with effect from April 11, 2026,” Swiggy said in its stock exchange filing dated May 21, 2026.
Last month, Swiggy told exchanges it would seek shareholder approval to appoint Bothra and Kishan to its board, as group chief executive officer Sriharsha Majety moved to tighten management representation and align the board more closely on strategic priorities. In the same filing, the company proposed replacing Prosus nominee Roger Rabalais with Renan De Castro Alves Pinto, with Prosus remaining Swiggy’s largest shareholder at about 21 per cent.
Industry experts said the delay in the transition towards IOCC status matters most for Swiggy’s quick commerce arm Instamart, where an Indian-owned structure could give the quick-commerce business greater flexibility on inventory, private labels, and margins. Rival Eternal (Zomato) made a similar transition last year and subsequently improved margins.
To qualify as an IOCC, companies must ensure both ownership and effective control rest with Indian shareholders and management. For listed firms, that typically means limiting foreign shareholding and aligning board rights and composition accordingly. Swiggy’s proposed board changes were aimed at meeting those requirements and strengthening management control.
Swiggy’s resolution reportedly failed despite backing from foreign investors, including Prosus, SoftBank, and Accel, with opposition said to have come largely from domestic institutional shareholders, including mutual funds. The company’s filing showed public institutional investors voted 59.15 per cent against the amendment. Separately, brokerage JM Financial had earlier said Swiggy’s strategic choices around Instamart leave limited room for a standalone turnaround, making M&A the most viable path for value creation.
Eternal, parent of Zomato and Blinkit, had earlier capped foreign ownership at 49.5 per cent after Indian investors gained majority ownership, allowing Blinkit to shift from a marketplace to an inventory-led model. The move boosted revenue, with Eternal reporting ₹17,292 crore in the March quarter of FY26 as it moved from booking commissions to recognising full sales value.
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