Cube Highways Trust has fixed the price band for its Rs 5,000 crore initial public offering (IPO) at Rs 151-152 per unit, with the issue set to open for subscription on July 22, as the infrastructure investment trust (InvIT) transitions from a privately listed to a publicly listed vehicle.
The IPO is entirely an offer for sale (OFS) by existing unitholders. The issue will close on July 24. The InvIT is valued at Rs 20,429.86 crore at the upper end of the price band.
Ahead of the IPO, the trust has secured Rs 1,250 crore from five strategic investors through unit subscription agreements signed on July 13. The strategic investors will subscribe to 8.22 crore units at up to Rs 152 per unit.
The strategic investors include Prazim Trading and Investment Company, which will invest up to Rs 950 crore, HDFC Life Insurance Company and HDFC Pension Fund Management with commitments of up to Rs 100 crore each, Axis Max Life Insurance with up to Rs 50 crore, and WhiteOak Capital REIT & InvIT Alternatives Fund I with up to Rs 50 crore.
Vinay Sekar, chief executive officer (CEO) of Cube Highways Trust, said the decision to list publicly was driven by growing domestic investor interest in InvITs. “We have been listed through a private placement for the last three years. What we have observed is a significant upswing in the interest that Indian investors, including domestic investors, have evinced in this product, from both the institutional and individual sides. There is clearly an increasing understanding of this product,” he said.
Sekar also said the public listing would broaden the trust’s access to capital and improve liquidity and price discovery. “The idea is that this will open up wider pockets of capital for the trust and also will lead to better liquidity and price discovery. With this, Cube Highways Trust is set to become the first privately listed Indian InvIT to go public,” he said.
On the OFS structure, Sekar said the trust did not require fresh capital at this stage and had therefore opted for an offer for sale.
“We don’t necessarily need capital at this point, and therefore we decided to do an offer for sale,” he said, adding that the sponsor entities and associated investors, including Canadian investment management firm British Columbia Investment Management Corporation (BCI) and Abu Dhabi’s sovereign investor Mubadala, are the selling unitholders.
He added that the sponsor, Cube Highways and Infrastructure V Pte. Ltd., has simultaneously committed four additional highway assets to the trust through binding agreements, with the acquisitions proposed to be executed largely through a preferential unit issuance.
Cube Highways Trust currently owns 27 road assets across India and has signed binding agreements to acquire four additional assets with an enterprise value of more than Rs 7,000 crore. It also has a right of first offer (ROFO) on three more sponsor assets. Sekar said the InvIT will continue to pursue both sponsor and third-party asset acquisitions.
As of FY26, the trust had assets under management (AUM) of Rs 36,842 crore. Net debt, including deferred payments, stood at Rs 17,768 crore, translating into a net debt-to-enterprise value (EV) ratio of 46.82 per cent, while its debt-to-Ebitda ratio was 4.21 times.
Sekar said the trust remained comfortable with its leverage and saw room to fund future acquisitions.
“The four assets that we are acquiring through a swap transaction will reduce our net debt-to-EV ratio. The regulatory headroom is 70 per cent, so there is still some room for us to add debt to the portfolio,” he said.
Additionally, the trust distributed Rs 10.09 per unit in FY24, Rs 11 per unit in FY25, and Rs 13.77 per unit in FY26. According to Sekar, the growth in distributions is due to two factors. “One, organically, because of toll assets, the revenue keeps growing. The second factor is that the addition of assets also increases the distribution.”
