Road Infrastructure Investment Trust (InvIT) Cube Highways Trust is launching its nearly ₹5,000-crore public issue on July 22 and closing it on July 24.Unlike standard new listings, Cube is converting from a privately-listed InvIT (which debuted in April 2023) into a publicly-traded vehicle now. A privately-listed InvIT pools institutional funds to invest in revenue-generating infrastructure. It is listed on stock exchanges, but trading is restricted to institutional investors.At the upper end of the ₹151–152 price band, the issue lowers the entry barrier for investment sharply. One can bid for a single lot of 95 units (requiring ₹14,440).The entire transaction of 32.89 crore units (not share) is structured as an Offer for Sale (OFS) by financial backers. These include British Columbia Investment Management Corporation (BCI), Abu Dhabi’s Seventy Second Investment Company and the sponsor group (Cube). Consequently, the Trust will receive zero money. So, the public issue is not giving any growth capital and investors will be funding the exit of older unit-holders.Strategic institutions have already anchored 25 per cent of the offer (₹1,250 crore for 8.22 crore units) at ₹152 per unit. The remaining pool is split between Qualified Institutional Buyers or QIBs (75 per cent) and Non-Institutional Investors or NIIs (25 per cent). There is no separate retail quota, so they they have to invest in the NII category.At the upper band of ₹152, the issue is priced at a 4.2 per cent premium to its declared Net Asset Value (NAV) of ₹145.77 per unit (which has grown 13.6 per cent CAGR since listing).Based on FY26 disclosures, Cube’s EV/EBITDA comes to 11.7x. The independent valuer pegs FY26 enterprise value (EV) at ₹36,841.76 crore, which is 2.7 per cent lower than market EV.The EV/EBITDA multiple is at the higher end of some peer road InvITs (6x-11x). Recently-listed Citius Transet InvIT, which bl.portfolio had recommended, came at a multiple of 5.6x.Cube’s FY26 Distribution Per Unit (DPU) implies a trailing yield of about 9 per cent. Road InvIT distributions may fluctuate with traffic, maintenance, debt servicing and concession expiries. Since highway concessions have finite lives, NAV or unit value may decline as their residual tenures shorten, unless fresh assets offset the depletion. Hence, part of the distribution may economically represent recovery of invested capital rather than recurring income alone.Returns could improve after the four committed assets (details below) are integrated, depending on their valuation, the number of new units issued and DPU accretion. The three ROFO (right of first offer) assets remain additional optionality.Given that Cube’s valuation and net debt/EBITDA are relatively higher on an absolute basis, investors need not subscribe now. They can wait for better visibility on DPU, portfolio life and attractive valuation.BusinessAs on March 2026, Cube owned and operated 27 road assets covering 8,754 lane-km across 12 States and 1 Union Territory. Its operational portfolio largely avoids greenfield construction risk.Toll assets account for 85 per cent of AUM (assets under management) and derive revenue from vehicle traffic, while annuity and HAM (hybrid annuity model) assets, forming the remaining 15 per cent, receive scheduled payments from NHAI or State authorities. In FY26, share of revenue from operations from annuity assets was 17.4 per cent, while that from tolls was 80.5 per cent.SEBI regulations require InvITs to distribute at least 90 per cent of their net distributable cash flows (NDCF) to unit-holders.Cube’s growth case rests on adding operational assets. It is integrating four committed assets—three toll and one annuity—with aggregate AUM of ₹7,292.53 crore through an equity swap with the sponsor group.It also has ROFO rights over three fully-operational corridors with long residual concession lives, including the Delhi-Hapur-Meerut Expressway and Kokhraj-Handia stretch. These assets generated over ₹870 crore in FY25 revenue. If acquired at accretive valuations, the committed and ROFO assets could extend portfolio life, support DPU and improve investor returns.Financial trajectory for Cube InvIT has been good. In FY26, revenue from operations grew 28 per cent year-on-year, driven by more than doubling in operation and maintenance income, near tripling of finance income on annuity receivables, primarily on account of acquisition of QEPL and JUHPL on June 12, 2025. This drove 36 per cent growth in EBITDA (74.2 per cent margin).Toll tariffs generally provide for periodic escalation, though the formula varies across concessions. Some assets have WPI-linked revisions, while others provide for fixed annual increases.Factors to considerThe portfolio faces some near-term concession expiries. Western UP Tollway was handed back to NHAI in June, while Andhra Pradesh Expressway expires in September. A few other assets have residual lives of only about five years, requiring Cube to replenish expiring cash flows despite the portfolio’s weighted average residual concession life of 18 years.Periodic major maintenance causes projected debt-free cash flows to fall from ₹3,618.3 crore (17.7 per cent of m-cap) in FY28 to ₹2,635.2 crore (12.8 per cent of m-cap) in FY29. Liquidity buffers may smooth distributions, but cost overruns could hurt DPU. In InvITs, debt-free cash flow is the cash generated by infrastructure assets before paying lenders, used to distribute dividends. The portfolio exhibits corridor risk, with Delhi-NCR, Uttar Pradesh and Tamil Nadu anchoring about 55 per cent of AUM. Stretches along a single highway, NH-44, contribute a dominant 35.8 per cent of total toll income.Net debt stood at ₹17,249 crore as of March, with a weighted average cost of 7.53 per cent. Net debt-to-EBITDA of 5.3x is within the road-InvIT range (3-7x) but relatively higher on an absolute basis. Interest, principal repayments and management fees will continue to absorb cash flows.TakeawaysCube offers a trailing pre-tax distribution yield of about 9 per cent, but given its valuations and debt levels we prefer a wait-and-watch stance. Returns could improve if the committed assets are integrated at accretive valuations without excessive dilution, while the ROFO assets provide further optionality.Given concession depletion, leverage, maintenance requirements and interest-rate exposure, investors may wait for greater visibility on DPU and portfolio life before allocating.Unlike REITs, unit-price performance across listed InvITs has been mixed despite their relatively-high distribution yields. Despite making distributions, total returns (XIRR %) have been weak for Roadstar Infra Investment Trust, listed in March 2025, at 1 per cent; Capital Infra Trust, listed in January 2025, at 3 per cent; and IRB InvIT Fund, listed in May 2017, at 5 per cent. Returns are calculated as on March 31, 2026.InvIT valuations are generally sensitive to interest-rate movements, with rising bond yields tending to weigh on prices. With further domestic rate cuts appearing unlikely, the scope for rate-driven capital appreciation may be limited.If risk-free yields rise without a commensurate increase in InvIT yields or distributions, the yield spread could narrow, reducing their relative attractiveness.Published on July 18, 2026