Mubadala: Cube Highways Trust Divestment Via Accelerated Bookbuild

• Mubadala Investment Company divested its stake in Cube Highways Trust.
• The divestment was executed through on-market block trades via an accelerated bookbuild process.
• A range of institutional investors acquired the units offered in the sale.
• Shardul Amarchand Mangaldas & Co. provided legal advice to Mubadala Investment Company for the transaction.
• This transaction demonstrates a viable exit strategy for institutional investors in Indian Infrastructure Investment Trusts.

This transaction provides a clear roadmap for other institutional investors considering the sale of substantial stakes in Indian Infrastructure Investment Trusts.

Mubadala Investment Company, a prominent global investor, recently completed the divestment of its holdings in Cube Highways Trust. This significant transaction involved the sale of its stake in the Indian Infrastructure Investment Trust (InvIT) through a structured capital markets process. The units were acquired by a diverse group of institutional investors, signaling strong market interest in the underlying infrastructure assets.

The divestment was executed using a combination of on-market block trades conducted on the stock exchanges. This method allowed for the efficient transfer of a substantial block of units without disrupting market prices significantly. The entire process was managed pursuant to an accelerated bookbuild, a mechanism designed to rapidly gather demand from institutional buyers and price the offering.

Legal counsel for Mubadala Investment Company throughout this complex transaction was provided by Shardul Amarchand Mangaldas & Co. Their advisory role was crucial in navigating the regulatory and procedural intricacies associated with a large-scale divestment of this nature within the Indian capital markets framework.

The strategic choice of an accelerated bookbuild process, coupled with on-market block trades, underscores the sophistication of the Mubadala Cube Highways Trust divestment. This approach is typically employed for large share or unit sales where speed and minimal market impact are paramount. An accelerated bookbuild involves a rapid marketing period, often just a few days, during which investment banks solicit bids from institutional investors at various price points, ultimately determining a clearing price for the block of units.

For the Cube Highways Trust stake sale, this method facilitated a swift and orderly exit for Mubadala Investment Company. The participation of a range of institutional investors in acquiring the units highlights the growing appetite for well-structured infrastructure assets within India's investment landscape. Such India InvITs divestment transactions are becoming increasingly common as the InvIT structure gains traction as a viable vehicle for both investment and divestment in the country's infrastructure sector.

This particular Shardul Amarchand Mubadala deal demonstrates how established global investors are leveraging advanced capital market tools available in India to manage their portfolio exits. It reflects a maturing market environment capable of absorbing significant block sales through efficient, transparent mechanisms.

The successful Mubadala Cube Highways Trust divestment sets a notable precedent for future India InvITs divestment activities. It provides a clear roadmap for other institutional investors considering the sale of substantial stakes in Indian Infrastructure Investment Trusts. The execution through on-market block trades and an accelerated bookbuild process offers a proven structure for achieving liquidity efficiently and effectively.

Legal professionals advising clients on capital markets transactions, mergers and acquisitions, or infrastructure investment exits in India will find this executed structure particularly instructive. The accelerated bookbuild India mechanism, as demonstrated in this Cube Highways Trust stake sale, represents a robust strategy for managing large-scale divestments while ensuring broad institutional participation. This transaction reinforces the viability of India's public markets for facilitating complex exits by major global investors.

This transaction provides a precedent for institutional investors divesting significant stakes in Indian Infrastructure Investment Trusts (InvITs) through on-market block trades and accelerated bookbuild processes. Lawyers advising on capital markets, M&A, or infrastructure investment exits in India should note this executed structure for similar client strategies.

Source: Original reporting via SCC Times