Shares of food and quick-commerce giant Swiggy plunged 4% on Wednesday, extending losses to 6% over two sessions and wiping out nearly Rs 5,000 crore from its market capitalisation. The decline came amid concerns over potential foreign outflows following its exclusion from the MSCI and FTSE indices.

Swiggy shares dropped to Rs 264.55 apiece on Wednesday, the lowest level seen by the stock since late July. The company’s market capitalisation dropped to Rs 77,813 crore.

Swiggy’s shareholders last month gave their nod to proposals that will let the company achieve the status of an Indian-owned and controlled company (IOCC), approving a proposal to cap foreign shareholding in the company at 49.5%.

The company on September 1 entered the NSDL red flag list after foreign ownership moved within the 3% of the applicable FPI limit.

According to the official NSDL red-flag list, foreign investors can now hold a maximum of 2.8 crore Swiggy shares. Jefferies had earlier explained that stocks with a cap on foreign ownership are placed on the red-flag list when FPI holdings are within 3 percentage points of the permissible limit.

If the limit is breached, foreign investors must divest their excess holdings within five trading days of trade settlement, selling the shares only to domestic investors

Once this resulting dip in foreign ownership is updated with the depositories, benchmarks will likely exclude the stock within 2-3 business days, as per Jefferies. “In such a scenario, Swiggy could see passive outflows of over $400 million from MSCI and FTSE indices, in our view,” it added.

Also read | Swiggy to see $400 million outflows after Indian-owned status? Jefferies explains why

How will this impact Swiggy’s operations?

Jefferies in its August note, however, highlighted that the move supports Swiggy management’s plan for a 1P (inventory-led) model at Instamart, which could drive 80 bps margin upside. With the crucial approval now in place, the international brokerage now expects the company to move swiftly on the implementation process. This will require notifying the depositories, which will then initiate the necessary changes, a process that may take 2-3 weeks.

The international brokerage noted that the company indicated that operational groundwork is underway, enabling a seamless migration once all necessary approvals and implementation steps are completed.

Jefferies on Swiggy share price

Jefferies has a ‘Buy’ call on Swiggy's shares with a target price of Rs 435 per share. This implies a staggering upside potential of 58% from the stock’s previous closing price of Rs 275 apiece.

The shares of the food delivery major have fallen over 7% in a week and 32% in 2026 so far. Overall, the stock is down more than 37% in one year.

Also read | Why is market falling today? Sensex plunges over 750 pts, Nifty below 23,800. 5 key factors behind Rs 5 lakh crore wipeout

(With inputs from agencies)

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