Accel India V (Mauritius) Limited’s board right survives IPO

Accel India V (Mauritius) Limited is set to retain the right to nominate, appoint and maintain one Board nominee after the Offer, even after the shareholders’ agreement terminates on listing and trading approvals. The March 26, 2026 waiver-cum-amendment requires a proposed Articles of Association clause giving Accel one nominee director, subject to applicable law.

Which Accel board right survives the IPO?

Accel’s stated continuing right is to nominate, appoint and maintain one nominee director on the Board after the Offer. The waiver-cum-amendment says the Company will include a clause for that right in the agenda for the first general meeting of shareholders after consummation of the Offer. The proposed clause is to be included in the Articles of Association, the Company’s constitutional document.

The nominee director would be liable to retire by rotation and remain subject to applicable law. Retirement by rotation is the process under which a director must retire and may require reappointment under the applicable legal and constitutional framework. The disclosure also expressly states that Accel’s right will subsist after termination of the Shareholders’ Agreement, or SHA.

The proposed post-Offer right differs from Accel’s pre-listing SHA right. Under the April 20, 2023 SHA, Accel could nominate, appoint and maintain one director only while holding at least 7% of the Company’s share capital on a fully diluted basis. Fully diluted basis means share capital calculated after assumed conversion or exercise of outstanding instruments. The disclosed post-Offer Articles clause says Accel may maintain one nominee director “at all times,” but the supplied text does not clearly restate a numerical post-Offer ownership threshold.

What investor rights does the IPO waiver change?

The SHA gives specific investors and promoters several rights over shares and Company governance, but the March 26, 2026 waiver-cum-amendment modifies some of them to enable the Offer. The SHA includes transfer restrictions, rights of first offer and first refusal, tag-along and drag-along rights, reporting covenants, information and inspection rights, investor director rights, pre-emptive rights, exit rights, anti-dilution protection, liquidation preference and affirmative voting matters.

The waiver changes the Board composition provision to allow at least six and no more than 15 directors, subject to applicable law. It also waives observer appointment rights from the filing of the Red Herring Prospectus. Information and inspection rights are waived from that filing date to the extent required under applicable law, including the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

The waiver also applies to shares sold through the Offer for Sale. It waives share-transfer restrictions, rights of first refusal and tag-along rights solely for transfers by selling shareholders under that offer. The document does not state that these waivers apply to all future transfers outside the Offer for Sale.

Which investor nomination rights end at listing?

The waiver removes unexercised nomination rights of Peak XV, Lightspeed and Greenoaks as of the filing date of the pre-filed draft Red Herring Prospectus. Under the SHA, Peak XV and Lightspeed could each nominate one director while holding at least 7% of fully diluted share capital. Greenoaks had the corresponding right at a 7.5% fully diluted holding.

Accel is not included in the disclosure of waived unexercised nomination rights. Instead, the proposed Articles clause separately provides for Accel’s one nominee director after consummation of the Offer. This creates a disclosed distinction between Accel’s proposed continuing representation and the other named investors’ unexercised SHA nomination rights.

The promoters also have a separate proposed right to nominate a maximum of two directors at all times, conditional on their remaining employees or directors of the Company. That promoter provision and Accel’s proposed nominee clause are both intended for inclusion in the Articles at the first general meeting after the Offer, unlike the investor-specific rights contained only in the SHA.

How does the Board framework change after the SHA?

The proposed post-Offer framework replaces the SHA’s investor-specific arrangement with provisions for promoter nominees, one non-executive director, independent directors and Accel’s nominee. The Board must appoint one non-executive director who is liable to retire by rotation, subject to applicable law. It must also contain the number of independent directors required under the Companies Act and the Securities and Exchange Board of India Listing Regulations.

As of the Red Herring Prospectus date, the Board comprised eight directors: two executive directors, one non-executive non-independent director, one investor nominee director and four non-executive independent directors, including one woman independent director. The current eight-member Board is not described as the mandated post-listing composition because the waiver permits a Board of between six and 15 directors.

The disclosed post-Offer framework therefore preserves governance mechanisms rather than a fixed list of sitting directors. Accel’s proposed right concerns the ability to nominate and maintain one director. It does not state that the Board will remain at eight members, that the existing investor nominee will continue, or that the nominee will be exempt from retirement-by-rotation requirements.

When do the SHA and waiver-cum-amendment end?

The SHA automatically terminates in respect of each party upon the receipt of listing and trading approvals from the recognised stock exchanges for the Offer. It can also terminate if all parties mutually consent, or in respect of an individual party when that party ceases to hold any shares. The disclosure says that, except as provided in the SHA, special rights including board nomination rights do not survive the SHA’s termination.

Accel’s proposed Articles-based right is the stated exception because the waiver says it will subsist after the SHA terminates. The effectiveness of that continuing right nevertheless depends on the Company placing the Articles clause before shareholders at the first general meeting after consummation of the Offer. The source does not disclose the result of that future shareholder process.

The waiver-cum-amendment has separate termination triggers. It terminates upon termination of the SHA; if the Board decides not to undertake or withdraw the Offer; 18 months after final observations from the Securities and Exchange Board of India on the pre-filed draft Red Herring Prospectus; on March 31, 2027; or on another date agreed in writing by the parties. These conditions govern the transition agreement rather than changing the stated intention for Accel’s Articles-based right.

What does Accel’s surviving right not include?

The disclosure identifies one Accel nominee director as the right that survives the SHA’s termination, rather than the wider package of private-company investor protections. It does not specify continuing post-listing information, inspection, pre-emptive, anti-dilution, exit, liquidation-preference or affirmative-voting rights for Accel. The stated continuing influence is therefore board representation, subject to applicable law and retirement by rotation.

The waiver also contains an Offer-related indemnity for principal investors, to the maximum extent permitted by law and any directions from the Securities and Exchange Board of India or stock exchanges. The Company is to indemnify principal investors for specified losses linked to Company misstatements or omissions in offering documents and related securities-law violations, except for information specifically confirmed by an investor about itself and its shares offered for sale. That indemnity is separate from the Accel board-nomination provision.

Conclusion

The disclosed governance transition removes or waives several investor protections associated with the April 2023 SHA, including the unexercised director nomination rights of Peak XV, Lightspeed and Greenoaks. Accel is treated differently because the proposed Articles clause explicitly preserves one nominee director after the SHA terminates, alongside up to two promoter nominees and legally required independent directors.

The next disclosed step is the first general meeting after consummation of the Offer, when the Company is required to include the proposed Articles clause on the agenda. The continuing right also remains subject to applicable law, shareholder action on the Articles provision and the waiver-cum-amendment’s termination framework, including its March 31, 2027 long-stop date.