IPO Size: Rs. 5,000 cr, entirely offer for sale (OFS)

• By sponsor and sponsor group
• Allocation: Maximum 75% for institutions, minimum 25% for HNI, no retail quota

Price band: Rs. 151-152 per unit (not share)

Mcap: Rs. 20,430 cr, Enterprise Value: Rs. 38,186 cr

IPO Date: Wed 22^nd Jul 2026 to Fri 24^th Jul 2026, Listing Mon 3^rd Aug 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Already Listed Entity

Cube Highways Investment Trust (InvIT) units have been listed on NSE and BSE since 19^th April 2023 with 1,025 unitholders (mainly institutional investors) as of 30.6.26. Via this IPO, InvIT is looking to convert from privately listed to publicly listed.

27 Road Assets

Cube Highways has a portfolio of 27 road assets aggregating 8,754 lane kilometers and 2,005 kilometers in distance, across 12 states and 1 union territory in India, besides right of first refusal (RoFR) on 7 assets. Similar to Anantam, this InvIT is sponsored by financial investor and not a road asset developer.

17% of InvIT’s Rs. 4,240 cr revenue in FY26 came from annuity projects, up from 12.5% in FY25, which is not linked to changes in road traffic volume.

Track Record

Cube Highways InvIT distributed Rs. 13.77 per unit to unitholders in FY26, implying a pre-tax yield of 9.1% on current issue price. However, the distribution mix is not favourable, with 50% of Q4FY27 distribution of Rs. 3.57 per unit being interest component (others being dividend and return of capital), taxable in the hands of investors at marginal tax rate. Post tax yield is sub-7%, weakening the investment thesis.

Coming on the capital appreciation, from issue price of 100 per unit about 3.25 years ago, Cube InvIT has delivered 45% capital gain, implying 13% CAGR return. While this is attractive, it can be partly attributed to macro interest rate cuts, which saw most InvITs and REITs appreciating, being inversely proportionate to interest rates.  

Moreover, past return cannot be indicative of future performance. Page 350 of the Offer document shares projection versus actuals for FY24 to FY26. For all the past 3 fiscals, actual revenue and cash flow from operations for Cube Highways were below projections. Hence, risk of future distribution from current assets remains.

Expensive in relation to Private Peers

GR-Infra sponsored Indus Infra Trust (formerly Bharat Highways) is ruling at Rs. 130 per unit, implying 11% pre-tax yield on last quarter DPU of Rs. 3.50 (only 28% interest), implying post-tax yield of about 9-9.5%. Last 2 year capital appreciation has been 24%, comparable to Cube.

Even KKR-sponsored Vertis Infra Trust’ Q4FY26 DPU of Rs. 3.6 per unit implied pre-tax yield of 13% and post tax of 9-9.5% (75% taxable). Thus, Cube’s post tax yield are the lowest. 

Priced Close to Secondary Market

Currently, units are quoting at Rs. 153 and Rs. 154 on BSE and NSE respectively, close to IPO price. Thus, hardly any incentive for incoming investors in the IPO.

On NAV of Rs. 146 per unit, as of 31Mar26, IPO in priced at 4% premium to historic NAV. Even on estimated NAV as of 30^th June, pricing is at a slight premium to NAV, making listing pop appear difficult.  

InvITs prices move inversely with interest rates and rates may be hiked by RBI in the Oct or Dec policy cycle basis inflation outlook after monsoon and external oil price shocks. Thus, we don not believe much scope for capital appreciation exists as differential between InvIT yield and risk-free interest rate narrows.