Cube Highways Trust

Cube Highways Trust is an Indian infrastructure investment trust (InvIT) established with the objective of acquiring, operating, and managing road and other infrastructure assets in India. The Trust operates on a public-private partnership (PPP) model in association with central and state governments. Its core value proposition is focused on acquiring mature, cash-generating highway assets, stabilizing and derisking them, and operating them to deliver stable, long-term returns to unitholders. The underlying business model relies on a balanced mix of toll and annuity concessions (Toll AUM to Annuity AUM ratio of 85:15), allowing it to capture traffic-linked upside while securing predictable, government-backed cash flows. The Trust caters to prominent government and institutional bodies acting as concessioning authorities, predominantly the National Highways Authority of India (NHAI) and the Ministry of Road Transport and Highways (MoRTH), as well as select state governments. Its geographic reach is highly expansive, operating across 12 states and one union territory in India, including major freight and passenger corridors in Uttar Pradesh, Tamil Nadu, Maharashtra, Andhra Pradesh, and Jammu & Kashmir. This strategic distribution across industrial clusters, agricultural belts, and major urban centres limits concentration risk and supports sustained traffic volumes. Unlike traditional manufacturing enterprises, the Trust's "infrastructure capacity" is represented by its massive operational network of highway assets. As of March 31, 2026, the Trust's portfolio comprises 27 road assets aggregating to 8,754 lane kilometers and 2,005 kilometers in distance. Following the conclusion of the Western UP Tollway Private Limited (WUPTPL) concession on June 23, 2026, the active portfolio stands at 26 assets. The capacity utilization is driven by heavy traffic volumes, with the toll assets recording a weighted average annual daily tollable traffic of 37,269 Passenger Car Units (PCUs) in Fiscal 2026.  A critical operational highlight is the Trust's advanced asset management and maintenance expertise, supported by in-house research and development (R&D). The in-house R&D centre develops innovative materials and conducts materials research, collaborating with industry and authorities. The Trust leverages proprietary software, such as Road-Aid, BuildAid, and HiRate, alongside AI-powered inventory mapping systems for predictive maintenance and real-time asset condition monitoring. Furthermore, the Trust has integrated a comprehensive ESG framework into its operations, highlighted by the issuance of India's first sustainability-linked bond in the road sector, tying financial performance to targets for greenhouse gas emissions, circularity, and diversity. As per financial performance, Cube Highways Trust has posted total income / net profits of Rs 3,074.11 Cr / Rs (705.92) Cr (FY24), Rs 3,453.15 Cr / Rs (35.72) Cr (FY25) and Rs 4,359.03 Cr / Rs 216.72 Cr (FY26). So as per previous financials data, the company has shown a steady top-line growth of ~19% CAGR, successfully turning profitable in FY26 as revenue outpaced heavy depreciation charges, while maintaining a high but regulated Net Borrowing Ratio of 46.82%. Company has an average EPS of Rs N/A (Loss) and average RoNW of N/A (Loss)% for the last three fiscals. Based on the pre-issue book value, the issue is priced at a Pre-Issue P/BV of 1.04 as per NAV of Rs 145.77 as on 31.03.26. Factoring in the fresh issue proceeds (100% OFS, no new capital), the Post-Issue P/BV stands at 1.04. If we attribute the latest earnings of FY24, FY25, and FY26 to the expanded equity base post-issue, then the asking price is at a Post-Issue P/E of around N/A, N/A, and 94.41 respectively. As per RHP, a comparison between listed peers shows it trades at an attractive Price-to-NAV premium of just 4.2%, which is cheaper than peers like National Highways Infra Trust (11.59% premium) and Shrem InvIT (15.52% premium).  On BRLM's front, Kotak Mahindra Capital Company Limited, HDFC Bank Limited, HSBC Securities and Capital Markets (India) Private Limited, and JM Financial Limited are associated with this IPO, and KFin Technologies Limited has handled multiple IPOs in the last three fiscal years. (15.07.26) As per financials, Cube Highways Trust has shown robust revenue scaling with an expanding EBITDA margin of 74.20%, RoNW is 2.21% and the Post-Issue P/BV is 1.04. So the issue looks attractively priced. The Trust has demonstrated an exceptional 9.8% dividend yield and an outstanding cash conversion cycle (CFO of Rs 3,802.95 Cr). The company is an Indian infrastructure investment trust (InvIT) offering products starting from Toll road operations to Hybrid Annuity Model (HAM) and BOT concessions. So, we give a SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions. On BRLM's front, Axis Capital Limited, Ambit Private Limited, ICICI Securities Limited are associated with this IPO, and has not handled any SME / Main board IPOs in last three fiscal years. ( As on 10.04.26 ) As per financial projections, Citius Transnet Investment Trust may generate cash around Rs 862.15/- Cr, Rs 1,060.52/- Cr and Rs 1,095.55/- Cr respectively in FY27, FY28 and FY29. So it may generate around 10% yields and it will start from next year itself. So we give NEUTRAL rating to this infrastructure trust.