Cube Highways Trust Completes ₹4,185 Cr Acquisition of Two J&K Highways.

Cube Highways Trust ("Cube InvIT"), managed by Cube Highways Fund Advisors Pvt. Ltd., today announced the successful acquisition of two operational annuity road projects from the National Investment and Infrastructure Fund ("NIIF"). The transaction, valued at ₹4,185 crore (Enterprise Value including cash, subject to closing adjustments), marks a significant expansion for Cube InvIT's portfolio.

The two assets transferred are Quazigund Expressway Pvt. Ltd. (QB) and Athaang Jammu Udhampur Highway Pvt. Ltd. (JU), collectively spanning approximately 80 kilometers across Jammu and Kashmir. QB is notable for being one of India's longest bi-directional tunnels, while JU provides a crucial link between Jammu and Srinagar.

Both assets come with a residual concession life of over six years and are underpinned by stable, predictable cash flows from fixed semi-annual annuity payments from the National Highways Authority of India (NHAI), ensuring insulation from traffic risks.

Management Commentary on Strategic Acquisition

Vinay C. Sekar, CEO of Cube InvIT, expressed his satisfaction with the collaboration, stating, "Today's acquisition will add to the high-quality, Pan-India portfolio and enhance the Trust's exposure to fixed-revenue annuity assets that are unaffected by traffic risks and economic cycles." He further highlighted that the acquisition showcases Cube InvIT's "disciplined capital allocation strategy and prudent use of its balance sheet for acquiring de-risked assets with strong fundamentals." The transaction is projected to be accretive to net distributable cash flows by approximately ₹2.3 per unit annually, on average, over the next five years.

Pankaj Vasani, Group CFO of Cube InvIT, emphasized the strategic fit of the new assets, noting, "The strategic addition of these two completed and revenue-generating annuity assets optimally complements our existing portfolio of assets and grows the annuity exposure." Following this acquisition, annuity revenue will constitute 33% of Cube InvIT's total revenue. Vasani also highlighted the Trust's strong financial position, with a Net Debt to AUM ratio of approximately 49% post-transaction and a AAA-rated credit profile from CRISIL, ICRA, and India Ratings, positioning Cube InvIT for further value-accretive acquisitions.

NIIF's Value Creation Through Strategic Divestment

Vinod Giri, Managing Partner, Master Fund, NIIF, commented on the transaction's significance for NIIF, stating, "This transaction reflects NIIF's ability to underwrite complex transactions and acquire large infrastructure assets, de-risk them with a comprehensive plan, improve the credit profile, and create value." He praised the performance of Athaang, NIIF's wholly-owned roads platform, for its "operational excellence through best-in-class systems and processes," which enables them to "deliver strong returns and attract global institutional capital."

The successful transfer underscores the growing investor confidence in India's infrastructure sector and the strategic value of operational highway assets with stable revenue streams.