Singapore-based Cube Highways & Infrastructure, an investment arm of I Squared Capital, plans to sell seven highway projects totaling 516 kilometres to monetise its road assets, including one BOT and six hybrid annuity model assets, with a combined revenue of INR 860 crore in FY23. Ambit Capital has been hired to facilitate the sale process. These assets span Andhra Pradesh, Maharashtra, Telangana, and Tamil Nadu, with notable projects like the Narketpally Addanki Medarametla Expressway. Cube Highways aims to divest these assets despite initial plans for inclusion in its private infrastructure investment trust.
Singapore-based Cube Highways & Infrastructure, an investment arm of I Squared Capital, is set to sell seven highway projects spanning 516 kilometres as part of its strategy to monetise its road assets. The portfolio comprises one BOT asset and six hybrid annuity model assets, collectively generating INR 860 crore in revenue during FY23.
To facilitate the sale, Cube has enlisted Ambit Capital and has reached out to potential investors. The assets, consisting of six HAM projects and one BOT project, were initially planned for inclusion in Cube's private infrastructure investment trust (InvIT). Cube Highways, recognised as India's largest roads operator with a portfolio encompassing 27 highways totaling nearly 8,400 lane kilometres, aims to divest these assets to streamline its portfolio.
Cube Highways had previously secured INR 5,225 crore through its private InvIT, with investments from entities like British Columbia Investment Management Corporation and Mubadala Investment. The seven road projects earmarked for sale are located across Andhra Pradesh, Maharashtra, Telangana, and Tamil Nadu.
In Maharashtra, Cube plans to sell two HAM assets: the Borgaon-Watambare Highways and the Mangalwedha Solapur Highways, both integral parts of NH-166. In Telangana, the targeted projects include the Mangloor Highway and a segment of NH-161, forming part of the Bharatmala Pariyojana scheme.
Assets in Tamil Nadu and Andhra Pradesh comprise the Trichy to Kallagam road and the Chittoor to Mallavaram road, respectively. Acquired from KNR Constructions in 2018, these assets have a concession period of 15 years.
The sole BOT asset earmarked for sale is the Narketpally Addanki Medarametla Expressway (Namel), a 212-km road spanning Andhra Pradesh and Telangana. Serving as a crucial link between Hyderabad and the port cities of Chennai and Nellore, Namel witnessed a 28% year-on-year revenue increase to INR 250 crore in FY23, attributed to rising commercial traffic and a 15% toll rate hike implemented in April 2022.
Cube Highways acquired Namel from Ramky Infrastructure and IL&FS Transportation Networks in December 2018. Additionally, Cube Highways and Infrastructure III Pte acquired five HAM projects, including two in Maharashtra and the Mangloor Highways in Andhra Pradesh, from Dilip Buildcon in 2019.
Through this divestment initiative, Cube Highways aims to optimise its portfolio while providing investment opportunities for potential buyers interested in India's infrastructure sector.
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