Policy Pulse: Cube Highways Reviews NHAI Circular On WPI Adjustment Linking Factor

Cube Highways Trust has initiated a detailed evaluation of the recent circular issued by the National Highways Authority of India (NHAI) concerning the revised linking factor for Wholesale Price Index (WPI) adjustments. The move comes as infrastructure investment trusts and toll operators assess the financial and operational implications of the updated formula on annuity and toll-based projects.

Key Highlights From The Circular Review

- NHAI’s circular proposes a recalibration of the linking factor used to adjust project annuities and toll revenues based on WPI fluctuations  
- Cube Highways is reviewing the impact across its portfolio of operational road assets, including hybrid annuity model (HAM) and toll-operate-transfer (TOT) projects  
- The trust is working with financial advisors and legal experts to interpret the circular’s scope, retroactive applicability, and revenue sensitivity  
- Preliminary assessments suggest that the revised factor may influence annual cash flows and internal rate of return (IRR) projections for select assets  
- Cube Highways has confirmed that the review is ongoing and any material impact will be disclosed in accordance with SEBI InvIT regulations

Operational And Financial Context

- WPI-linked adjustments are a critical component of revenue modeling for road infrastructure projects, especially under HAM and TOT frameworks  
- The revised linking factor may alter the inflation pass-through mechanism, affecting annuity payouts and toll escalation schedules  
- Cube Highways is expected to engage with NHAI and other stakeholders to seek clarity and ensure alignment with concession agreements  
- The trust maintains a diversified asset base across national corridors and continues to focus on operational efficiency and investor returns

Regulatory Outlook

- Industry participants anticipate further guidance from NHAI on implementation timelines and asset-specific applicability  
- Cube Highways is likely to update its financial models and investor communication once the review concludes

Sources: Bombay Stock Exchange Filings, Cube Highways Trust Corporate Announcements, Economic Times Infrastructure Desk, Business Standard Roads Tracker, Reuters India Policy Updates