India’s leading e-commerce and gig-economy companies saw their shares decline on Monday after the government confirmed the rollout of new labour regulations under the Code on Social Security 2020 (CoSS). The rules, effective 21 November 2025, mandate expanded social security coverage for gig and platform workers—a move expected to increase operational costs for delivery and service platforms.
Market Reacts to Rising Cost Concerns
With the government requiring online aggregators to contribute 1–2% of annual turnover to a social security fund—capped at 5% of payouts to workers—investors anticipate higher expenses for labour-intensive companies.
As a result:
- Eternal fell over 2% to ₹295.80
- Swiggy slipped nearly 2% to ₹378.05
- Delhivery dropped 1.8% to ₹410.40
- Nykaa declined 1.7% to ₹263.95
- Urban Company opened 1.6% lower at ₹140.55
Urban Company shares have now fallen 33% from their post-listing peak.
Analysts Expect Companies to Pass on Costs
Brokerage estimates suggest the new rules could add ₹2.1–₹2.5 per order for hyperlocal delivery players like Swiggy and Eternal.
- JM Financial expects:
- Eternal to contribute ₹430 crore
- Swiggy to contribute ₹260 crore (FY26E basis)
It maintains a Buy on Eternal (TP ₹450) and Add on Swiggy (TP ₹460), noting that platforms will likely pass costs to customers with minimal impact on ordering behaviour.
- Bernstein says the new labour code may compress Swiggy and Eternal’s EBITDA by 25–70 bps, with quick commerce being more vulnerable. It believes cost increases will be shared across the ecosystem, leading to adjusted fees or pricing. Bernstein rates both stocks Outperform.
- Elara Capital also remains optimistic, retaining a Buy on Eternal (TP ₹415) and Accumulate on Swiggy (TP ₹490). It notes that existing insurance benefits—already 1% of revenue—could partially soften the blow.
Broader Sector Impact
Morgan Stanley warns that gig worker costs could rise across platform-based sectors, estimating an EBITDA hit of 4–10%. It expects companies to gradually distribute incremental costs among customers, merchants, and workers, reducing long-term financial pressure.
While near-term sentiment remains cautious, analysts across the board agree that the new rules—aimed at formalizing gig work and expanding social security—are likely to reshape cost structures but may not significantly disrupt long-term demand.