Cube Highways Trust (Cube Trust) and Cube Highways and Infrastructure V Pte. Ltd. (Cube V) have submitted a combination notice to the Competition Commission of India (CCI) seeking approval for a significant acquisition in India’s road infrastructure sector.
The proposed transaction involves acquiring three key highway assets from the National Investment Infrastructure Fund (NIIF), marking a major consolidation move in the sector.
The transaction comprises two interconnected acquisitions. Cube V will acquire a 100 per cent shareholding of Athaang Devanahalli Tollway Private Limited (ADTPL) from NIIF, which is acting through its investment manager, National Investment and Infrastructure Fund Limited (NIIFL).
Cube Trust, through its investment manager Cube Highways Fund Advisors Private Limited (CHFAPL), will acquire 100 per cent of the shareholdings of Athaang Jammu Udhampur Highway Private Limited (AJUHPL) and Quazigund Expressway Private Limited (QEPL) from NIIF. Collectively, these transactions constitute the Proposed Transaction and fall under the purview of Section 5(d) of the Competition Act, 2002, necessitating regulatory approval from CCI.
Cube Trust is a SEBI-registered infrastructure investment trust (InvIT) that operates and maintains highway projects across India. Cube V is a foreign portfolio investor registered with SEBI, managing and operating a portfolio of high-quality highway and transportation infrastructure assets in India.
ADTPL, AJUHPL, and QEPL are Indian-incorporated special purpose vehicles (SPVs) that operate road and highway projects under government concessions.
Cube Trust and Cube V assert that the acquisition will not impact competition adversely, as there are no geographical overlaps between the assets in question. The parties argue that the transaction will not result in foreclosure concerns or market concentration, and thus, the relevant product and geographic markets need not be narrowly defined. However, based on CCI precedents, the relevant market could be categorized as the “market of provision of operation & maintenance (O&M) of highways in the road infrastructure sector in India.”
This acquisition aligns with Cube Highways’ strategy to expand its footprint in India’s growing infrastructure sector. By adding these key highway assets, Cube Trust and Cube V aim to enhance their portfolio and strengthen their operational capabilities in the road infrastructure domain.
With the submission now under CCI’s review, industry experts anticipate a swift regulatory decision, given India’s potential benefits for road infrastructure development. If approved, the deal is expected to enhance efficiency in highway operations and facilitate further investment in the sector.
The proposed acquisition underscores the increasing consolidation in India’s road infrastructure space as large institutional investors like Cube Highways continue to expand their asset base. Market stakeholders will be keenly watching the CCI’s decision, which could set a precedent for future highway asset acquisitions in the country, economy watchers said.