Cube Highways announces an acquisition

EV and EV/EBITDA cannot be determined from the disclosed transaction update. The October 8, 2026 board approval covers the proposed acquisition of:

• 100% of Devanahalli Tollway Private Limited;
• at least 95% of Western MP Infrastructure & Toll Roads Private Limited; and
• 100% of Chenani Nashri Tunnelway Limited.

The filing states that the preferential-issue terms remain subject to finalisation and requisite approvals, but it does not disclose acquisition consideration, assumed debt, cash acquired, or EBITDA for the assets ^[1].

The relevant calculations would be:

• EV = equity purchase consideration + debt assumed − cash acquired
• EV/EBITDA = EV ÷ maintainable EBITDA

Therefore, no defensible comparison can yet be made between the acquisition multiple and the existing portfolio’s valuation multiples from the latest independent valuation report. The transaction remains a proposed acquisition, and the filing itself indicates that the terms are still being finalised and require unitholder and regulatory approvals ^[1].

The preferential issue price and post-acquisition Debt/Asset ratio have not yet been finalized or disclosed. The board approval remains in-principle and explicitly makes the preferential-issue terms subject to finalization, unitholder approval and regulatory clearances ^[1].

For reference, the latest reported NAV was Rs 149.6 per unit as of June 30, 2026 ^[2]. The Rs 152 per unit price reported in the July public issue was the IPO/anchor price, not a confirmed price for the October preferential issuance ^[3]. Relative to that NAV, Rs 152 represents a Rs 2.40 premium, or 1.60% above NAV, calculated as `(152 / 149.6) - 1`.

Leverage impact: no quantified post-acquisition consolidated Debt/Asset projection has been reported. The closest disclosed baseline is Net Debt/AUM of 45.17% as of June 30, 2026, with debt including deferred payments of Rs 17,645 crore and AUM of Rs 36,700 crore ^[2]. This is not identical to consolidated Debt/Asset.

Mechanically, issuing units for an equity-funded acquisition should reduce leverage relative to funding the same acquisition entirely with incremental debt, provided the acquired assets’ debt is not consolidated or assumed in a way that offsets the equity contribution. The actual post-acquisition ratio requires the final issue proceeds, acquisition value, and debt assumed or consolidated for the acquired assets—none of which is disclosed in the cited announcement.

The announced assets would broaden the footprint and modestly change the concession mix, but there is not enough disclosure to calculate the post-transaction WARL. More importantly, the transaction is not yet fully completed: the October 8 approval covers Devanahalli Tollway, Western MP Infrastructure & Toll Roads and Chenani Nashri Tunnelway, subject to unitholder and regulatory approvals ^[1]. The previously approved Baharampore-Farakka acquisition has been deferred ^[1].

Portfolio bridge

WARL impact

The last reported WARL remains 18.0 years for the existing portfolio ^[4]. A directionally valid conclusion requires each incoming asset’s remaining concession life and the same Pre-MM EBITDA-based weighting used for the portfolio WARL. Neither is disclosed in the transaction announcement ^[1].

Accordingly:

• WARL would rise only if the incoming assets’ weighted residual lives exceed 18.0 years.
• It would fall if they are shorter.
• The effect could be immaterial even with long concessions if the new assets carry relatively small EBITDA weights.

Mix impact

The full four-asset proposal would add three toll assets and one annuity asset, expanding the portfolio from 27 to 31 assets ^[4]. On a simple asset-count basis, toll assets would rise from 18 to 21 and annuity assets from 3 to 4, while the HAM count would remain 6. However, this does not establish the post-transaction 85%/15% AUM split, because the acquired assets’ AUM or valuation weights are not disclosed.

The practical conclusion is therefore greater geographic breadth and a slightly larger toll-and-annuity asset base, but no defensible conclusion yet on whether the portfolio’s economic WARL lengthens. The exact post-close mix also remains subject to the deferred BFHL transaction and the approvals for the three currently proposed acquisitions.