Swiggy unlikely to adopt IOCC model for Instamart despite Blinkit's inventory play

Swiggy unlikely to adopt IOCC model for Instamart despite Blinkit's inventory play

Even as Blinkit gears up for a major pivot to an inventory-led model under Indian ownership, rival Swiggy is signaling no immediate plans to follow suit, marking a clear strategic split as the battle for dominance in India’s quick commerce market heats up.

Speaking on an earnings call after announcing Swiggy’s Q4 FY25 results, Chief Financial Officer Rahul Bothra said the economics of switching to an inventory ownership model under Indian-owned and controlled company (IOCC) norms do not currently offer compelling upside.

“We have done the math,” Bothra said. “From an overall economics standpoint, we believe the magnitude of difference can't be more than 30-35 basis points. But it comes on the back of inventory holding on your balance sheet. So, it is a choice to be made on the commercial model.”

Bothra’s comments come just days after Blinkit, the quick commerce arm of Eternal (formerly Zomato), secured board approval to cap foreign shareholding at 49.5 percent – clearing a key regulatory hurdle for becoming an IOCC and directly owning inventory.

Blinkit CFO Akshant Goyal said the move will give the company greater control over supply chains and product margins, while keeping working capital needs modest relative to scale.

“As an IOCC, we now have the option to also own inventory in the quick commerce business,” Goyal said, adding that working capital requirements for FY25 would remain under Rs 1,000 crore – roughly 5 percent of Blinkit’s projected Rs 22,000 crore net order value.

For Swiggy, however, the trade-offs appear less favourable. “The commercials don’t necessarily justify for you to make any inorganic way to get there,” Bothra noted. While he didn’t rule out a future transition – “we may also want to consider it…when we believe it is the right time” – he emphasized that there is “no plan in the near future.”

Swiggy’s stance stands in contrast to Blinkit’s deeper push into a fully integrated quick commerce model. Blinkit CEO Albinder Dhindsa said the shift could bring some margin expansion, depending on how much of the business transitions to the new model, though competitive intensity might absorb those gains.

Meanwhile, other players like Zepto are also aggressively repositioning themselves to meet IOCC norms. The Mumbai-based startup raised $350 million from Indian investors in late 2024 and is reportedly in talks for another large domestic round ahead of a planned IPO. The company has raised over $1.3 billion in the past year to expand its dark store network and domestic ownership base.

The scramble to restructure ownership reflects the growing importance of regulatory compliance in India’s evolving FDI regime – particularly for inventory-heavy models in e-commerce and quick commerce. But Swiggy’s decision to hold steady suggests that for now, it sees more value in preserving capital efficiency than pursuing tighter control over supply chains.