With many gig staff now incomes greater than the common salaried worker — with out the accompanying job safety and key advantages — a phase of India’s gig economic system is booming, and corporations constructed on it at the moment are tapping the markets for funding.
Gurugram-based dwelling companies supplier City Firm is the newest to file for an preliminary public providing (IPO). It’s set to develop into the third gig-based on-line platform after Zomato and Swiggy to record on the exchanges.
Nevertheless, in contrast to meals supply or ride-hailing platforms, which interact a much less specialised workforce, City Firm operates as an aggregator for expert staff — electricians, plumbers, carpenters, cleaners, and sweetness professionals — who usually earn extra whereas working fewer hours.
About 60 per cent of City Firm’s 50,000-odd lively service professionals full not less than 30 orders a month, incomes a median in-hand earnings of Rs 34,000, as per information disclosed in its IPO filings. The highest 5 per cent, although, made Rs 49,719 in web earnings through the first three quarters of FY25, in keeping with firm information.
In the meantime, hyperlocal supply companions make between Rs 20,000-26,000 per 30 days, in keeping with consultancy agency Redseer. In distinction, the common month-to-month wage of a proper worker in India stood at Rs 20,702 in FY24 as per official information, nicely behind that of gig staff.
Expert gigs, higher pay
Meals supply platforms have lengthy confronted criticism for his or her working mannequin — and final month, Union Commerce Minister Piyush Goyal joined the refrain. “What are India’s start-ups of at present? We’re centered on meals supply apps, turning unemployed youths into low-cost labour so the wealthy can get their meals with out shifting out of their home,” he had stated at a start-up occasion on April 3.
City Firm presents a definite tackle the gig economic system — by onboarding expert service professionals, who bear in-house coaching licensed by the Nationwide Talent Growth Company (NSDC), and offering them entry to constant demand, the web platform vastly will increase their incomes potential. In trade, it costs them a 28 per cent payment.
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In comparison with staff within the offline unorganised sector, who earn Rs 10,000-15,000 a month, or these within the organised sector, who make Rs 15,000-25,000 per 30 days, City Firm’s service professionals are inclined to earn considerably extra.
Whereas most service professionals (63 per cent) earned Rs 33,962 per 30 days a median, the highest 5 per cent made Rs 49,719 in web earnings through the first three quarters of FY25, in keeping with City Firm’s draft crimson herring prospectus (DRHP) filed on April 30. On common, service professionals earn a bit over Rs 300 per hour — the highest 5 per cent work 160 hours a month, almost double the general common of 87 hours, the corporate added.
Scope for dwelling companies market in India
As per analysis by Redseer for City Firm’s draft prospectus, on-line companies presently account for simply 0.8 per cent of India’s general dwelling companies market — together with each organised and unorganised offline gamers. That share is projected to develop to 1.3 per cent by 2029. The web dwelling companies market is anticipated to just about double from $49 billion to $97 billion throughout the identical interval. It’s set to develop at a CAGR of 20–22 per cent, in parallel with the broader enlargement of India’s gig economic system, which presently represents lower than 3 per cent of the entire workforce — far beneath China’s 20–25 per cent. Whereas City Firm faces no equal competitor but, that might change in a short time because the market expands.
Rs 1,900-crore IPO after constructive financials
City Firm’s IPO will comprise a recent problem of shares price Rs 429 crore and a proposal on the market (OFS) by early traders — Accel India, Bessemer India, Elevation Capital, Tiger International, and VY Capital — totalling Rs 1,471 crore.
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The Rs 1,900-crore IPO follows a turnaround in City Firm’s financials, with the platform posting a constructive adjusted EBITDA of Rs 9.3 crore within the first 9 months of FY25, in comparison with a damaging Rs 119 crore in FY24.
Working in 48 Indian cities and choose worldwide markets — together with Saudi Arabia, Singapore, and the UAE — City Firm additionally sells water purifiers and digital door locks underneath its in-house model, ‘Native’. In FY24, it reported Rs 828 crore in working income; for the primary three quarters of FY25 alone, income has already touched Rs 846 crore.
City Firm plan to make use of the IPO proceeds primarily in the direction of strengthening its know-how and cloud infrastructure.
Why new gig employee welfare legal guidelines could squeeze City Firm’s margins
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Whereas City Firm presents its service professionals structured coaching, upskilling, and entry to demand, they continue to be categorized as ‘impartial contractors’ — not staff — and subsequently don’t obtain advantages resembling insurance coverage or provident fund contributions. In its draft prospectus, the corporate warned that the total rollout of the Code on Social Safety, 2020, or state-level gig employee welfare legal guidelines, may dent its profitability by requiring extra social safety contributions.
The code consolidates 9 Central labour legal guidelines and defines gig staff as people incomes exterior the standard employer-employee framework, although a number of provisions stay unnotified. In the meantime, states like Rajasthan, Karnataka, Jharkhand, Telangana, and West Bengal have launched or handed legal guidelines to increase social safety advantages to platform-based gig staff — most of that are nonetheless pending implementation.
“Adjustments in labour and employment legal guidelines and laws that widen the scope of ‘employment’ could classify service professionals on our platform as ‘staff’, which might lead to extra obligations on our firm, together with cost of statutory dues resembling provident fund and acquiring extra registrations and licenses,” City Firm famous in its draft prospectus.