Cube Highways Trust Sponsor Creates Encumbrance on 5.81% of Outstanding Units

Cube Highways Trust , a leading infrastructure investment trust (InvIT), has reported that one of its sponsors, Cube Highways and Infrastructure III Pte. Ltd., has created an indirect encumbrance on a significant portion of its units.

Key Details of the Encumbrance

Number of Units: 78,044,436
Percentage of Total Outstanding Units: 5.81%
Percentage of Sponsor's Total Holding: 27.91%
Creation Date: September 22, 2025
Expiration Date: September 25, 2026
Encumbrance in Favor of: Sumitomo Mitsui Banking Corporation Singapore Branch

Purpose of the Encumbrance

The encumbrance is related to a secured syndicated loan facility that ISQ Asia Infrastructure Holdings II Pte. Ltd. (ISQ II) intends to obtain from Standard Chartered Bank (Singapore) Limited and Sumitomo Mitsui Banking Corporation Singapore Branch. The loan proceeds will be used for a strategic acquisition by Cube Highways and Infrastructure II Pte Ltd (CH II), a group company of Cube Highways and Infrastructure III Pte. Ltd.

Acquisition Details

CH II plans to acquire all shares and Optionally Convertible Debentures (OCDs) of Chenani-Nashri Tunnelway Limited (CNTL), a company registered in India. This acquisition requires a significant capital infusion to meet the agreed-upon investment commitment.

Financing Structure

Due to ISQ Asia Infrastructure Holdings Pte. Ltd.'s (ISQ) current inability to provide additional funds, ISQ II has stepped in to fulfill the commitment. As part of the financing arrangement:

ISQ II will pledge Class B Shares held in CH II.
Ordinary shares of Cube Highways and Infrastructure III Pte. Ltd. will also be pledged in favor of the lenders.

Implications for Unit Holders

In the event of enforcement, the lenders will have the right to sell the units held by Cube Highways and Infrastructure III Pte. Ltd. in Cube Highways Trust (limited to ISQ II's portion) as an indirect recourse.

Regulatory Compliance

This disclosure has been made in compliance with the Securities and Exchange Board of India's (SEBI) regulations, specifically under Chapter 10 of SEBI's Master Circular dated July 11, 2025. The information has been communicated to both the BSE Limited and the National Stock Exchange of India Limited, where the units of Cube Highways Trust are listed.

Investors and stakeholders of Cube Highways Trust should take note of this development, as it represents a significant change in the encumbrance status of a substantial portion of the trust's units held by one of its sponsors.

Cube Highways Trust , a leading infrastructure investment trust in India, has announced strong financial results for the first quarter of fiscal year 2026, demonstrating significant growth across key metrics.

Revenue and Traffic Growth

The trust reported a remarkable 10.3% year-over-year increase in toll revenue, underscoring the robust performance of its highway assets. This growth was supported by a healthy 6.3% rise in traffic volume, indicating increased utilization of the trust's road network.

Financial Highlights

Distribution per ordinary unit stood at INR 2.50 for the quarter.
Assets Under Management (AUM) grew to INR 365.43 billion, representing a substantial 27% year-over-year increase from INR 287.60 billion.
The portfolio expanded from 24 to 27 Special Purpose Vehicles (SPVs).
Net debt to AUM ratio was maintained at 49.62%, with a solid debt service coverage ratio of 1.80x.
The trust continues to hold AAA credit ratings from Crisil, India Rating, and ICRA, reflecting its strong financial position.

Operational Performance

The trust's portfolio now spans 2,021 kilometers across 13 states and union territories.
The average residual concession period stands at 19.4 years, ensuring long-term revenue visibility.
Electronic toll collection efficiency improved, reaching 96.5% of total transactions.
Average daily collection increased to INR 90.50 million from INR 82.10 million in the previous year.

Portfolio Expansion

Cube Highways Trust has continued its strategic growth, recently acquiring two annuity assets (QEPL and AJUHPL) and completing the acquisition of NAM Expressway Limited. These additions have further diversified and strengthened the trust's asset portfolio.

Management Commentary

Vinay C Sekar, Chief Executive Officer of Cube Highways Fund Advisors Private Limited (the Investment Manager), stated, "Our Q1 FY26 results demonstrate the strength and resilience of our diversified highway portfolio. The significant growth in revenue and traffic volumes, coupled with our strategic acquisitions, positions us well for sustained performance. We remain committed to delivering value to our unitholders while maintaining our focus on operational excellence and prudent financial management."

Outlook

With its expanded portfolio, strong financial metrics, and continued focus on operational efficiency, Cube Highways Trust is well-positioned to capitalize on the growing infrastructure needs of India. The trust's ability to maintain high electronic toll collection rates and increase daily collections indicates its operational prowess and bodes well for future performance.

Investors and stakeholders can look forward to the trust's continued growth trajectory, supported by its diverse asset base and strategic expansion initiatives in the Indian highway sector.