Swiggy shares fall 2%, down for 3rd session, as MSCI set to remove stock from Global Standard Indexes from September 7
Shares of Swiggy experienced a decline following MSCI's decision to exclude the company from global indexes, prompted by its shift to full Indian ownership and control. The new foreign ownership constraints limit further investments. Swiggy is targeting robust adjusted EBITDA growth by FY31, even as it reported a net loss while revenues showed an uptick in Q1 FY27.
Swiggy, the popular food delivery and quick commerce company, saw its shares fall by 2% to reach Rs 262 on the BSE on Thursday. This decline marks the third consecutive session of share price drop. The reason for the fall is MSCI's decision to remove the company from its Global Standard Indexes, effective from September 7, 2026.
The removal is due to Swiggy exceeding its foreign ownership limit, as per MSCI's foreign ownership limit event category. This cap was reduced to 49.5% after Swiggy transitioned to being an Indian-owned and controlled company (IOCC). Previously, foreign investors could hold up to 51% of Swiggy's shares.
Swiggy was also placed on the NSDL red flag list on September 1 due to foreign investors being just 3 percentage points away from the permissible foreign ownership limit. This list indicates that foreign investors can hold a maximum of 2.8 crore shares in Swiggy.
The stock's fall may prompt passive funds tracking MSCI index to reduce their exposure to Swiggy. Furthermore, Swiggy's foreign ownership cap could limit fresh FPI buying in the future. Its foreign investors include Prosus, SoftBank, Tencent, and Accel, while Indian investors include SBI Mutual Fund, ICICI Prudential Asset Management, and HDFC Mutual Fund.
Despite the setback, Swiggy has ambitious plans for growth. It aims to achieve Rs 10,000 crore in adjusted EBITDA by FY31, with a major focus on improving efficiencies in its food delivery business, expanding Instamart, and scaling up Dineout.
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