Swiggy to shift to inventory model starting Q3 FY27, eyes 80 bps Instamart margin boost

Food and grocery delivery platform Swiggy will begin transitioning to an IOCC (Indian-owned and Controlled Company) structure from the middle of Q3FY27, the company said in a letter to shareholders regarding the September quarter results on Thursday. The process is expected to take two to three quarters to complete, the company said in the same letter.

The transition is likely to improve its quick commerce arm Instamart’s contribution margin by around 80 basis points once fully implemented. It will also give the Bengaluru-based company better control over assortment, pricing, product availability, and day-to-day operations.

“A key update in the quarter was shareholder approval on the cap on foreign shareholding at 49.5% (fully diluted basis) to qualify as an Indian Owned and Controlled entity. The transition will allow Instamart to own inventory, and is expected to complete over the next few quarters, with a net margin benefit of about 80 bps,” cofounder and chief executive Sriharsha Majety said in the letter.


On August 18, Swiggy’s shareholders approved a proposal for it to become an IOCC after the company failed to secure the requisite number of votes for the proposal earlier.

“We have since taken necessary regulatory approvals and domestic ownership has risen to over 58% on the back of growing appetite among domestic institutional investors,” the company said in the letter.

Swiggy expects its net working capital days to stabilise at around 15 on a steady-state basis, and does not anticipate any significant incremental working capital deployment as a result of the shift. Net working capital days refers to the time a company takes to convert inventory to cash flow.

Swiggy’s rival Eternal, which operates the quick commerce platform Blinkit, became an IOCC last year and runs the 10-minute delivery business on an inventory model. This allows companies greater control over their supply chains and can result in higher margins.