AdvertisementDrag-Along and Tag-Along Rights in Private Equity-Backed M&A: Shareholder Agreement Architecture and SEBI ImplicationsSummary: The article examines drag-along and tag-along rights in private equity-backed M&A transactions and their treatment under Indian corporate and securities law. Tag-along rights permit minority shareholders to participate in a majority shareholder’s sale on the same terms, while drag-along rights enable majority shareholders to require minority shareholders to sell alongside them. It identifies tag-along rights among the specified special rights and discusses the treatment of special rights during the IPO transition. Special rights under Regulation 31B include nomination rights; veto and affirmative voting rights; information rights; and protective mechanisms such as anti-dilution, right of first refusal, and tag-along rights. ConclusionIn order to facilitate effective exits and allay the fears of minority shareholders, drag-along and tag-along rights are crucial elements of M&A arrangements supported by private equity.