Cube Highways Fund Advisors Private Limited, acting as the Investment Manager of Cube Highways Trust, has recently announced a significant acquisition. On February 7, 2025, Cube InvIT entered into Share Purchase Agreements (SPAs) with the National Investment & Infrastructure Fund (NIIF) to acquire 100% ownership in two vital infrastructure projects in Jammu and Kashmir. This acquisition aligns with Cube InvIT’s strategic goals of expanding its portfolio of high-quality, operational infrastructure assets.

The two projects involved in the deal are:

1. Quazigund Expressway Private Limited (QB): A critical 16.268 km stretch that includes one of India's longest bi-directional tunnels. The expressway operates on an annuity basis and is part of a 20-year concession period. This project plays a pivotal role in Jammu and Kashmir's road infrastructure, ensuring seamless connectivity between key regions.

2. Athaang Jammu Udhampur Highway Private Limited (JU): A 64.579 km 4-lane highway, designed to enhance transportation between Jammu and Srinagar. The highway also operates on an annuity-based concession and benefits from the growing importance of road connectivity in the region.

Cube InvIT's Acquisition Strategy

The acquisition of these two annuity road projects is a strategic move by Cube InvIT, which aims to enhance its infrastructure portfolio. By acquiring assets with a guaranteed return model such as availability-based concessions, Cube InvIT is strategically deploying its debt capacity to strengthen its position in India's growing infrastructure sector. The cash consideration for this deal, estimated at INR 41,847 million, is subject to customary closing adjustments.

These acquisitions mark a substantial growth in Cube InvIT's investment portfolio, which will now include 27 diverse assets across India. The acquisition is expected to be completed following the satisfaction of customary conditions precedent, including regulatory approvals from the National Highways Authority of India (NHAI) and the Competition Commission of India.

The transaction also underlines Cube InvIT's commitment to leveraging its expertise in acquiring and managing high-quality infrastructure assets across the country, strengthening its position in the road infrastructure sector.

Potential Impact on Cube InvIT’s Portfolio

With the completion of this acquisition, Cube InvIT is set to enhance its infrastructure footprint, specifically in the strategically important Jammu and Kashmir region. The addition of these operational projects will provide a steady stream of cash flows and add substantial value to Cube InvIT’s existing portfolio of assets.

The acquisition of Quazigund Expressway and Athaang Jammu Udhampur Highway significantly boosts Cube InvIT’s presence in the annuity space, reinforcing its strategy of deploying capital into assets that provide stable and predictable returns.

The deal also reflects the growing demand for infrastructure investment in India, driven by the increasing need for reliable road networks and better connectivity in challenging terrains. These projects not only meet this demand but also hold strategic importance in connecting critical regions in Jammu and Kashmir.

Regulatory Approvals and Closing Conditions

As with any major acquisition, regulatory approvals are required for the deal to proceed. Cube InvIT anticipates receiving approvals from NHAI and the Competition Commission of India. Once all conditions are met, the acquisition is expected to be finalized, expanding Cube InvIT’s portfolio and consolidating its position in the infrastructure investment trust (InvIT) space.

Conclusion

Cube InvIT's acquisition of these two high-quality annuity assets reflects a well-planned move to further solidify its standing as a leading player in India's infrastructure investment landscape. By adding projects such as Quazigund Expressway and Athaang Jammu Udhampur Highway, Cube InvIT not only strengthens its portfolio but also positions itself as a key player in the region’s infrastructure development.

As Cube InvIT continues to grow, these acquisitions will provide long-term value to its stakeholders, ensuring sustained returns and contributing significantly to the growth of India's infrastructure sector.

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