business · 2026-06-28
Cube Highways Eyes ₹5K Cr IPO in Oct
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Cube Highways Trust, backed by Abu Dhabi's ADIA and Mubadala, has begun roadshows for a ₹5K Cr IPO targeting an Oct launch after filing its DRHP in Mar.Converting from private to public InvIT unlocks mutual fund and insurance participation, previously barred by liquidity rules for private trusts.Existing unitholders including BCI Canada, Mubadala, and sponsor entities will sell stakes. The trust manages 27 toll road projects across 12 states.
What toll roads does Cube Highways operate?
Cube Highways manages 27 highway and toll road projects across 12 Indian states, valued at ~₹36.5K Cr. It plans to add 4 more projects before listing, reaching 31 projects covering 9,811 lane km. The trust uses a public-private partnership model with central and state govts.
How is Cube's ₹36.5K Cr portfolio valued?
Toll road InvITs are typically valued using discounted cash flow of future toll collections plus remaining concession life. Cube's 27 projects span different concession stages. A highway nearing concession expiry is worth less than one with 20 years left, even if current toll revenue is similar.
What revenue model do toll road InvITs use?
Toll road InvITs earn from two models: toll collection (where revenue rises with traffic) and annuity (fixed govt payments regardless of traffic). Cube uses both. Toll-based assets carry traffic risk but higher upside, while annuity assets provide predictable cash flow, like a bond coupon.
How does Cube compare to Raajmarg InvIT?
Raajmarg, backed by NHAI, raised ₹6K Cr earlier in 2026. It holds govt-owned road assets. Cube is private-sector-sponsored with Abu Dhabi sovereign backing. The key difference: Raajmarg monetizes existing govt highways, while Cube builds or acquires roads through PPP concessions with profit motive.
Why convert from private to public InvIT?
Private InvITs face SEBI rules that restrict mutual funds and insurers from buying units due to liquidity thresholds. For example, LIC or SBI Mutual Fund cannot invest in privately listed trusts. Going public removes this barrier, potentially doubling the eligible buyer pool and improving unit liquidity.
Why did Cube wait months after filing DRHP?
IPO markets were volatile post-Mar filing. Bankers wanted a stable window for large institutional deals. The same logic applied across PE-backed IPOs. NSE and Jio Platforms filings in Jun signaled improving sentiment, giving bankers confidence to launch roadshows for deals like Cube.
What SEBI rules block private InvIT access?
SEBI mandates that mutual funds invest only in securities meeting minimum liquidity and listing standards. Privately listed InvITs trade on a restricted platform with thin volumes. For instance, daily trading in Cube's private units averaged a fraction of public InvITs like IRB InvIT, disqualifying them.
Could mutual fund entry change InvIT pricing?
Yes, significantly. Mutual funds and insurers manage ~₹65L Cr combined. Even a small allocation to road InvITs could compress yields. FICCI-Crisil projects road InvIT AUM doubling from ₹2.46L Cr to ₹5.45L Cr by FY30. More institutional buyers chasing limited assets would push unit prices higher.
Which investors are cashing out and why?
BCI (British Columbia Investment Management Corp.) and Mubadala are among sellers. Both were anchor investors when Cube listed private units in Apr 2023. After ~3 years, they are partially exiting via the ₹5K Cr offer for sale. Sponsor entities like Cube Highways II and III also plan to sell.
Who are the selling sponsor entities exactly?
Three sponsor entities are selling: Cube Highways and Infrastructure II, Cube Highways and Infrastructure III, and Cube Mobility Investment. These are special purpose vehicles set up to hold toll road concessions. They channel ownership through the trust structure, and existing investors exit via these SPVs.
How does BCI's exit affect Cube's governance?
BCI was an anchor investor alongside Mubadala from Apr 2023. Post-IPO, governance typically shifts to independent trustees and a wider unitholder base. However, Abu Dhabi's ADIA remains the primary backer. If BCI reduces its stake significantly, its board influence would diminish proportionally.
Will Indian highway InvITs attract retail?
Retail participation in InvITs has been modest. IRB InvIT, India's largest listed road trust, has ~150K retail unitholders. The minimum lot size and complexity of toll concession structures deter small investors. However, SEBI reduced InvIT lot sizes in 2023, bringing the entry point to ~₹10K-15K.
Source: livemint.com