Restaurant India News: Swiggy’s IOCC Plan Fails Despite 72.35 Percent Shareholder Approval

Swiggy has clarified that its proposal to become an Indian Owned and Controlled Company (IOCC), which was recently rejected by shareholders, was intended to strengthen governance structures rather than increase control for the company’s founders.

In a stock exchange filing dated May 27, the online food and grocery delivery company stated that the proposed amendments did not include permanent control mechanisms for the founder group or board concentration rights.

“Neither right is granted in perpetuity - each subsists only while its conditions are satisfied. The Proposed Amendments do not create any veto rights, affirmative voting rights, committee nomination rights, quorum rights, permanent Board seats or any right to appoint a majority of the Board,” the company said in the filing.

The development follows a shareholder vote on the IOCC proposal, which received 72.35 percent approval but failed to pass due to not meeting the required threshold. The proposal was viewed as significant for the company’s governance structure and domestic ownership positioning.

According to earlier reports, the proposal faced resistance from public market investors and mutual funds, with concerns reportedly linked to shareholder communication, board structure implications, and questions around long-term financial impact.

Industry sources also indicated that weaker financial performance and pressure on Swiggy’s share price influenced investor sentiment, reducing willingness among foreign investors to dilute holdings at prevailing market valuations.

Alongside the IOCC proposal, Group CEO and co-founder Sriharsha Majety had proposed the induction of two additional directors to the board, including chief financial officer Rahul Bothra and co-founder Phani Kishan. These proposals were also rejected by shareholders.

Responding to concerns around governance and founder influence, the company said, “Instead of a concentration of power, this reflects a transparent and accountable mechanism for achieving strategic objectives of the company and domestic board representation in a company without an identifiable promoter group.”

Swiggy further added, “The Company will continue to engage constructively with its shareholders and other stakeholders and will evaluate any future structural or strategic steps through lawful, transparent and shareholder-aligned processes.”

The development comes at a time when India’s food delivery and quick commerce sector is witnessing increasing investor scrutiny around profitability, governance frameworks, and long-term capital allocation strategies as listed internet and hospitality-linked platforms face pressure to improve financial performance.