Sahajanand Medical Technologies ends pact, keeps board rights

Sahajanand Medical Technologies will terminate its shareholder agreement when listing and trading of its equity shares begin, ending the agreement’s transfer, information and affirmative-vote rights. Subject to shareholder approval and applicable law, NHP EA and Samara may each nominate one director while separately holding at least 10% of post-offer fully diluted equity capital.

What changes when SMT lists?

SMT’s shareholder agreement will end on the date its equity shares are listed and trading commences on the stock exchanges. The agreement was signed on December 19, 2017 and was read with a deed of adherence dated February 23, 2021, an addendum and amendment agreement dated January 12, 2023, and a Waiver cum Amendment Agreement dated July 25, 2025.

The termination also applies automatically to Part B of SMT’s articles of association, which contains the special shareholder rights available under the shareholder agreement. Part A of the articles will continue without further corporate or shareholder action after trading starts, according to the July 25, 2025 Waiver cum Amendment Agreement.

The shareholder agreement, or SHA, governed inter-se rights and obligations among SMT, specified shareholders, Shree Hari Trust and investors. The investors named in the SHA include NHP EA Sparkle Holding B.V., or NHP EA, and Samara Captain Markets Holding Limited, or Samara.

The Waiver cum Amendment Agreement is linked to the offer process rather than a fixed listing date. It terminates earlier if SMT’s board decides not to undertake the offer, an offer document filed with a regulator is withdrawn, 12 months pass from Securities and Exchange Board of India final observations, or the SHA itself terminates.

Which investor protections end when SMT’s pact ends?

SMT’s pact ending at listing removes contractual inspection, transfer and affirmative-voting protections available to investors under the SHA. The prospectus says Part B of the articles, which carried those special rights, will cease to have force and effect from commencement of trading.

Investors had the right to access and inspect SMT’s books of account and other business records under the SHA. They also had a right of first offer when specified shareholders or their affiliates proposed a direct or indirect transfer of equity shares; a right of first offer gives the holder a defined opportunity to make an offer for the shares.

The SHA also provided tag-along rights for investors when specified shareholders or their affiliates transferred equity shares. In the reverse situation, if either or both investors transferred more than 50% of SMT’s equity shares on a fully diluted basis to a single third party, specified shareholders could tag along and sell up to 100% of their securities to that buyer.

Investors further held affirmative voting rights over specified matters, meaning approval was required under the SHA for those matters. The stated matters included changes to SMT’s capital structure, changes to the board’s structure or composition except where permitted under the SHA, and amendments to the memorandum and articles of association.

Which SMT board rights remain after the pact ends?

NHP EA and Samara may each nominate one SMT director after listing if each investor separately holds 10% or more of SMT’s issued and paid-up equity share capital on a fully diluted basis after the offer. The right is several and not joint, so one investor’s eligibility does not depend on the other investor’s holding.

The director-nomination right is not disclosed as a continuing term of the SHA. Subject to applicable law, including the Securities and Exchange Board of India Listing Regulations, SMT will place the provision in its articles of association for shareholder approval through a special resolution after listing.

The prospectus does not disclose NHP EA’s or Samara’s post-offer holding percentage. It therefore does not establish whether either investor will meet the individual 10% threshold when SMT’s equity shares begin trading.

How could the nominations fit within SMT’s board structure?

SMT’s disclosed framework permits up to two investor-nominated directors if both NHP EA and Samara meet the separate 10% holding condition. The same proposed articles provision would allow SMT’s promoters to appoint up to three directors, subject to the stated special-resolution process and applicable law.

SMT’s articles require a board of not fewer than three and not more than 15 directors. As of the red herring prospectus date, SMT had eight directors: one executive director, three independent directors including one woman independent director, and four non-executive directors.

Two nominations would remain within the stated 15-director maximum, but SMT has not said whether its eight-member board would expand after listing or whether a current seat would change. The nomination mechanism gives an eligible investor the ability to nominate one director; it does not state that any named current director’s position is preserved.

SMT’s current board includes Jose Calle Gordo as chairperson and non-executive director since September 20, 2019, and Bhargav Dhirajlal Kotadia as managing director and chief executive officer under a five-year term beginning December 1, 2022. The board table also identifies Abhishek Rajendrakumar Kabra, a non-executive director since December 28, 2016, as a representative of Samara.

Why does the separate 10% threshold matter?

The 10% threshold narrows the governance right that may continue after SMT’s offer to a holding-based director nomination. Before listing, the SHA applied a wider set of rights to investors, including access to records, transfer protections and affirmative voting on specified corporate matters.

After listing, the disclosed continuing right depends on each investor maintaining at least 10% of issued and paid-up equity capital on a fully diluted basis. Fully diluted basis is the share-count basis specified in the proposed provision, and the words “severally and not jointly” mean a combined NHP EA and Samara stake would not meet the test for either investor.

The prospectus does not disclose a continuing NHP EA or Samara veto over capital-structure changes, amendments to SMT’s constitutional documents or changes to board composition after trading begins. Those matters are identified as affirmative-vote subjects under the SHA, whose special-rights provisions in Part B will terminate at commencement of trading.

The nomination rights also depend on the proposed articles amendment receiving the stated shareholder approval through a special resolution. The holding test alone is therefore not the only disclosed condition: the provision is subject to applicable law and to its inclusion in SMT’s articles of association.

What does the waiver agreement change before listing?

The July 25, 2025 Waiver cum Amendment Agreement gives waivers and consents to facilitate SMT’s offer while setting out the termination of the SHA at listing. It also amended provisions relating to adoption of a policy on ethical business and sanctionable practices.

Under the amended information-sharing provision, SMT will share information with any shareholder on request to meet regulatory requirements under laws in the jurisdiction where that shareholder operates. The disclosure makes that sharing subject at all times to applicable law, including the Securities and Exchange Board of India Insider Trading Regulations.

The prospectus says there are no other disclosed agreements among SMT’s shareholders, promoters, promoter group, related parties, directors, key managerial personnel, senior management, employees, subsidiaries or associates that could directly or indirectly affect management or control of SMT. That confirmation is stated as of the red herring prospectus date, apart from the material agreements already disclosed.

Conclusion

SMT’s listing framework replaces the broad rights in its 2017 shareholder agreement with a narrower potential post-listing representation right. Inspection rights, first-offer rights, tag-along rights and affirmative-voting rights are scheduled to end when trading commences, while NHP EA and Samara may each nominate one director only if the separate 10% test is met.

What to watch next is the shareholder special resolution on the proposed articles provisions and the post-offer holdings of NHP EA and Samara. SMT’s disclosed plan makes both conditions relevant because the board rights require inclusion in the articles and each investor must independently retain at least 10% on a fully diluted basis.