Why Swiggy wants to restructure its finance team
What's the story
Swiggy, a leading player in food and grocery delivery in India, is revamping its organizational structure, as per Moneycontrol. The company wants to appoint new heads of finance for its various businesses. This strategic move comes as the firm prepares to transition Instamart, its quick commerce vertical, into an inventory-led model in the coming months.
Model shift
Transition necessitates changes in accounting procedures
Until now, Instamart has been operating on a marketplace model, just like Swiggy's core business of food delivery. However, the planned transition to an inventory-led model for Instamart will require changes in accounting procedures. To facilitate this change, Swiggy plans to create two new Vice President (VP) of finance roles over the coming months.
Organizational changes
New VP roles to oversee Instamart and food delivery
One of the new VP roles will be responsible for leading the finance charter at Instamart, while the other will oversee Swiggy's food delivery business. These positions are new and shall likely report to Swiggy's Chief Financial Officer (CFO) Rahul Bothra.
Future plans
Evolving stance on inventory-led model transition
During the Q4 FY25 earnings call, Bothra had said that Swiggy may consider moving to an inventory-led model. However, he added there were no immediate plans for it. But three months later, his stance changed as he hinted at a possible future evolution toward an inventory-led business plan. This change is backed by increased domestic ownership at Swiggy from around 13% in September 2024 to nearly 40% now.
Regulatory adherence
Swiggy must limit foreign shareholding
To implement the inventory-led model, Swiggy will have to cap its total foreign shareholding at 49.5% on a fully diluted basis. The move is similar to what Blinkit did earlier this year, enabling the firm to comply with foreign direct investment (FDI) norms and hold inventory in sectors like quick commerce. This transition would also make Swiggy an Indian-owned and controlled company (IOCC).