Canadian pension investment manager British Columbia Investment Management Corporation (BCI) and Abu Dhabi’s sovereign investor Mubadala Investment Company have picked up significant stakes as anchor investors in Cube Highways Trust, an infrastructure investment trust (InvIT) backed by I Squared Capital’s Indian roads platform Cube Highways.
The InvIT has raised Rs 5,225.8 crore (approximately US$ 630 million), Cube said in a press statement on Wednesday.
Of the total proceeds, Rs 3,474 crore is primary fundraise which will be used to repay or prepay debt of the road projects housed under the InvIT. The fundraise includes a secondary sale of units amounting to Rs1,423 crore by existing shareholders, while the rest of the proceeds will go towards issue-related expenses, filings with Sebi show.
Cube Highways’ existing investors include I Squared Capital, Abu Dhabi Investment Authority (ADIA), and Japan Highways International BV.
The InvIT has a diversified portfolio of 18 toll and annuity road assets with an aggregate length of 1,423.60 kilometres.
The first tranche of assets held by the InvIT will have 17 NHAI toll road assets and one NHAI annuity road asset. These road assets are located across 11 states, including Andhra Pradesh, Bihar, Haryana, Jharkhand, Karnataka, Kerala, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal. In addition, pursuant to a right of first offer, CHT will also have an opportunity to access a pipeline of seven highway assets.
The InvIT has also signed a loan facility with the State Bank of India for an amount of Rs10,000 crore to be used for refinancing of the existing debt within the initial portfolio.
“BCI’s investment in Cube Highways is in line with our long-term strategy of investing in infrastructure platforms that meet the essential needs of the communities they serve. Additionally, this investment increases and diversifies our exposure in the infrastructure sector, as well as in India, enabling BCI to contribute to national economic growth,” said Zaman Velji, Senior Managing Director, Infrastructure & Renewable Resources, BCI.
Saed Arar, Executive Director – Head of Traditional Infrastructure, Mubadala, said, “India offers the most significant global growth opportunity in roads with a robust and well-regulated market for infrastructure investment. With more than $100 billion allocated to the road construction program, and a potential $20bn+ addressable acquisition pipeline, Cube Highways is the most well-positioned platform for Mubadala to drive investments in roads and capitalize on this market opportunity.”
