AltF coworking to introduce consumer stock options for clients

AltF CoWorking is planning to offer customers stock options.

coworking company will get shares based on a formula that includes variables such as team size, agreement tenure and minimum eligibility criteria.

CSOPs are similar to employee stock option plans (ESOPs), under which employees can buy shares of the company they work for at a discounted rate. ESOPs are now increasingly becoming a part of employees' salary structures, especially at the senior levels. This allows them to build wealth as the company grows in valuation.


“Consumers act as investors for us by adding to our revenues… I don't see a point why they should not be credited for any company's growth and value," Yogesh Arora, cofounder of AltF CoWorking, told ET. Arora said that the company hoped this would act as a differentiator in the market, and might drive business growth.


"Rather than any capital investment, AltF just requires its customers to get on-boarded and take office space at any of its locations, and in return, enjoy the benefits of a shareholder,” he said.

The Gurgaon-based co-working company has 10 coworking properties located in Noida and Gurgaon.

As in ESOPs, shares allotted under CSOP can be vested fully after three years.

Lawyers aware of startup regulations said the CSOP concept is new in India, unlike ESOPs, and will not be governed by the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

“As of date, in India, there is no regulation governing the shares of a privately held company being given to customers,” said Jeevan Ballav Panda, partner at law firm Khaitan & Co.

However, this isn't the case abroad. “CSOPs are gaining popularity by leaps and bounds. CSOP enables consumers to acquire an ownership stake in a utility they use. It is a consumer-centred investment model,” said Panda.

In Europe and Canada, CSOPs are being offered by several companies in the renewable energy sector. Consumers get a stake in the utility, and in exchange, the capital investment by consumers allows the utility to invest in better services.

"ESOPs can't be issued to anyone other than employees or directors. However, you can contractually create something that is ESOP-like, where clients are rewarded with stock options based on certain criteria,” said Anirudh Rastogi, managing partner of Ikigai Law. “But there will be certain issues from a legal, tax and investor perspective that need to be dealt with. For instance, tax benefits available under law to ESOP holders will not be available in this case."