Cube Highways Trust InvIT issue review (Not Rated)

•    The Trust is an India Infrastructure investment vehicle sponsored by Cube Highways and Infrastructure V Pte. Ltd.
•    It marked growth in its total income and cash flows for the reported periods.
•    It hiked its income distribution for the reported periods under privately listed trust.
•    Considering further addition to its projects AUMs, it is poised for bright prospects.
•    Well-informed investors can park funds for long term.

ABOUT COMPANY:
Cube Highways Trust is an Indian infrastructure investment trust sponsored by Cube Highways and Infrastructure V Pte. Ltd. and established with the objective of acquiring and operating road and other infrastructure assets in India. It is registered with SEBI under the InvIT Regulations, and its units have been listed on the Stock Exchanges since April 19, 2023.

As of March 31, 2026, through its Portfolio Assets, it operates 27 road assets aggregating to 8754 lane kilometers and 2005 kilometers in distance across 12 states and one union territory in India. As of such date, its Portfolio Assets had a weighted average residual concession period of 18.0 years (weighted on the basis of pre-major maintenance EBITDA (“pre-MM EBITDA”)) and operating history of 9.2 years, and the trust maintained Enterprise Value/AUM aggregating to Rs. 368,41.76 cr., exhibiting an AUM CAGR of 19.47% since March 31, 2024. This growth has corresponded with a 45.77% increase in its NAV per Unit from listing in April 2023 through March 31, 2026, at a CAGR of 13.62%. The trust operates its assets under different types of concessions, with a balanced mix of toll and annuity income. As of March 31, 2026, among its Portfolio Assets, its Toll AUM to Annuity AUM ratio was 85:15. The trust currently operate 26 road assets, upon the conclusion of the concession period of the WUPTPL Project.

Since its listing as a private InvIT in April 2023, its Unitholder base has expanded significantly, from 40 Unitholders as of April 28, 2023, to over 700 Unitholders as of March 31, 2026, reflecting increased investor participation from non-institutional investors alongside traditional institutional categories, including corporates, mutual funds, financial institutions and insurance companies.

Cube Highways Trust (the “Trust”) is a privately listed infrastructure investment trust and is proposing conversion from a privately listed infrastructure investment trust to a public InvIT through an Offer for Sale of units worth Rs. 5000 cr. Sponsor to this offer is Cube Highways and Infrastructure V Pte. Ltd., Investment Manager is Cube Highways Find Advisors Pvt. Ltd. And Axis Trustee Services Ltd. is the trustee. 

Currently the Units are privately listed on BSE Limited (the “BSE”) and National Stock Exchange of India Limited (the “NSE”) (BSE and NSE, collectively referred to as “Stock Exchanges”). The Trust is now proposing to convert from a privately listed InvIT to a public InvIT in accordance with Regulation 14(6) read with Regulation 14(4) of the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, as amended, and Chapter 14 of the InvIT Master Circular. In-principle approvals for public listing of the Units have been received from both BSE and NSE on May 7, 2026. BSE is the Designated Stock Exchange. Privately placed listed units have marked low of Rs. 100 per unit (May 10, 2024, and high of Rs. 146 per unit (on March 30, 2026.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route secondary IPO worth Rs. 5000 cr. (of approx.  328947368 units at the upper cap). The company has announced a price band of Rs. 151 – Rs. 152 per unit of Rs. 100 each. The issue opens for subscription on July 22, 2026, and will close on July 24, 2026. The minimum application to be made is for 95 units and in multiples thereon, thereafter. Post allotment, Units will be listed on BSE and NSE. This being a pure Offer for Sale (OFS), no funds are coming to trust. The issue is being made to unlock its value and avail listing benefits, while providing exit to some of its existing unitholders.

The four Book Running Lead Managers (BRLMs) to this issue are Kotak Mahindra Capital Co. Ltd., HDFC Bank Ltd., HSBC Securities and Capital Markets (India) Pvt. Ltd., JM Financial Ltd., and KFin Technologies Ltd. is the registrar to the issue. 

Post-IPO, its enterprise value will stand at Rs. 2042.86 cr. for 1344067762 units.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the trust has posted a total income/net distributable cash flow, of Rs. 3074.11 cr. / Rs. 1076.18 cr. (FY24), Rs. 3453.15 cr. / Rs. 1082.38 cr. (FY25), and Rs. 4359.03 cr. / Rs. 1625.65 cr. (FY26). The company posted growth in its top and bottom lines for the reported periods and hiked its cash flow distribution.

GENERAL RISKS:
INVESTMENTS IN UNITS INVOLVE A DEGREE OF RISK, AND BIDDERS SHOULD NOT INVEST ANY FUNDS IN THIS OFFER UNLESS THEY CAN AFFORD TO TAKE THE RISK OF LOSING THEIR ENTIRE INVESTMENT. FOR TAKING AN INVESTMENT DECISION, BIDDERS MUST RELY ON THEIR OWN EXAMINATION OF THE TRUST, THE UNITS AND THIS OFFER. BIDDERS ARE ADVISED TO CAREFULLY READ THE DRAFT OFFER DOCUMENT AND THIS OFFER DOCUMENT, INCLUDING THE SECTIONS ENTITLED “RISK FACTORS” AND “RIGHTS OF UNITHOLDERS” ON PAGES 80 AND 426, RESPECTIVELY.
BEFORE MAKING AN INVESTMENT DECISION RELATING TO THIS OFFER. FOR TAKING SUCH INVESTMENT DECISIONS, PROSPECTIVE INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TRUST AND THE OFFER, INCLUDING THE RISKS INVOLVED. EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT ITS OWN ADVISORS IN RESPECT OF THE CONSEQUENCES OF AN INVESTMENT IN THE UNITS BEING OFFERED PURSUANT TO THIS OFFER DOCUMENT. THIS OFFER DOCUMENT HAS BEEN PREPARED BY THE INVESTMENT MANAGER SOLELY FOR PROVIDING
INFORMATION IN CONNECTION WITH THIS OFFER AND A COPY OF THIS OFFER DOCUMENT HAS BEEN DELIVERED TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (“SEBI”) AND THE STOCK EXCHANGES. SEBI AND THE STOCK EXCHANGES ASSUME NO RESPONSIBILITY FOR OR GUARANTEE THE CORRECTNESS OR ACCURACY OR ADEQUACY OF ANY STATEMENTS MADE, OPINIONS EXPRESSED OR REPORTS CONTAINED HEREIN AND THE UNITS HAVE NOT BEEN RECOMMENDED OR APPROVED BY SEBI AND THE STOCK EXCHANGES. ADMISSION OF THE UNITS AS PUBLIC INVIT TO BE OFFERED PURSUANT TO THIS OFFER FOR TRADING ON THE STOCK EXCHANGES SHOULD NOT BE TAKEN AS AN INDICATION OF THE MERITS OF THE TRUST OR OF THE UNITS.

INCOME DISTRIBUTION POLICY:
The trust has distributed its cash flow as distribution of income per unit at Rs. 10.09 (FY24), Rs. 11.00 (FY25), Rs. 13.77 (FY26) and with its recent acquisitions and likely higher earnings, mulls improving its income distribution going forward.

INDUSTRY PEERS:
As per the offer document, the TRUST has shown its industry peers as IRB Infra Trust, National Highway Infra Trust, Vertis Infra Trust, Intense Trust, Shrem InvIT, and Oriental Infra Trust. Their NAV stands at Rs. 319.73, Rs. 150.50, Rs. 106.80, Rs. 117.50, Rs. 88.12, and Rs. 111.24, respectively as of March 31, 2026. Among peers, except National Highways Infra and Vertis Infra, all other trust/InvITS are quoting at a discount. Cube Highways NAV stood at Rs. 145.77 per unit as of March 31, 2026.