Cube Highways InvIT lists on BSE, NSE; raises ₹5,226 cr via private placement

Cube Highways and Infrastructure (Cube), a Singapore-based company investing in road and highway projects, on Wednesday listed its infrastructure investment trust (InvIT) on the domestic bourses BSE and the NSE. The InvIT is collective investment scheme similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects to earn a small portion of the income as return. The trust invests in either road toll projects or power projects. In October last year, state-owned National Highways Authority of India (NHAI) listed its infra investment trust on BSE.

The InvIT Cube Highways Trust raised ₹5,225.82 crore ($630 million) through a private placement of 52.26 crore ordinary units at a price of ₹100 apiece. The offer comprised a fresh issue of 38.02 crore units worth ₹3,802.6 crore and offer for sale (OFS) of 14.23 crore units aggregating up to ₹1,423.23 crore by sponsors Cube Highways and Infrastructure Pte. Ltd. and Cube Highways and Infrastructure III Pte. Ltd.

The InvIT Cube Highways Trust saw participation from marquee investors such as Canada's British Columbia Investment Management Corporation (BCI), Abu Dhabi's state-owned investment firm Mubadala, and Indian institutional investors.

“Canadian pension investment manager British Columbia Investment Management Corporation (BCI) and Abu Dhabi’s sovereign investor Mubadala Investment Company (Mubadala) have become the new anchor investors in Cube Highways Trust (CHT), an infrastructure investment trust (InvIT) in India,” it said in a release.

Cube Highways Trust (CHT) was registered in India as an irrevocable trust on December 7, 2021, and later as an infrastructure investment trust under the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, on April 5, 2022. It is an InvIT of roads sector assets sponsored by Cube Highways and Infrastructure Pte Ltd (CHI) and Cube Highways and Infrastructure III Pte Ltd  (CHIII), which is invested in by funds, vehicles and/or entities managed and/or advised by Cube Highways and/ or its affiliates (collectively Cube), with Cube Highways Fund Advisors Pvt Ltd (CHFAPL) as its Investment Manager, Cube Highways Transportation and Asset Advisors Pvt Ltd (CHTAAPL) acting as the Project Manager and Axis Trustee Services Ltd as the Trustee.

As per the release, CHT has a diversified portfolio of 18 toll and annuity road assets with a total length of 1,423.60 kilometres. The first tranche of assets held by the InvIT will have 17 NHAI toll road assets and one NHAI annuity road asset. These road assets are located across 11 states, including Andhra Pradesh, Bihar, Haryana, Jharkhand, Karnataka, Kerala, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal, the company said in the release.

Besides, CHT will also have an opportunity to access a pipeline of seven highway assets.

U K Sinha, an independent director at Cube Highways Funds Advisors (acting as the Investment Manager for the InvIT), said, “This marks a significant milestone in the development of India's infrastructure sector and InvIT in particular. The trust in Cube by such marquee investors affirms its capability and personnel. The Board and Cube’s team are eager to work with all stakeholders to continue generating value and worth for all. I’m thrilled to participate in Cube’s journey towards a more prosperous and sustainable future.”

The InvIT has also signed a facility agreement with the state-owned lender State Bank of India (SBI) for an amount of ₹100 crore ($1.2 billion) to be used for refinancing of the existing debt within the initial portfolio.

The InvIT has been rated “Provisional Ind AAA/Stable” for its loan facilities from three rating agencies, including Crisil, ICRA, and India Ratings & Research. The ratings were assigned considering the portfolio’s track record and geographic diversification, cash pooling structure, strong debt protection metrics and experienced management team.

The Cube Group is a 100% institutionally owned platform backed by a diversified investor base, including I Squared Capital, a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), and Japan Highways International BV. It is engaged in implementing the public-private partnership model in the country’s highways sector to operate and manage highway projects in association with the central and state governments.