Q1 20/21

Aug 12, 2020

Ladies and gentlemen, good day, and welcome to the Tata Power Q1 FY 'twenty one Earnings Conference Call. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. Today, we have Mr. Pravesh Sinha, CEO and M. D, Tata Power and Mr. Ramesh Subramanian, CFO, Tata Power with us on the call. I now hand the conference over to Mr. Pravesh Sheena. Thank you, and over to you, sir. Thank you. Good evening, everyone, and welcome to the earnings call. Hope all of you are safe and secure. The last few months, we have witnessed a widespread impact due to pandemic across various businesses, and it has impacted the power sector also, wherein we saw that the demand reduced by more than 25 in the month of April and May as the country went into lockdown. However, we have seen the drivers in demand as lockdown restrictions were relaxed in later part of May and then in June. And in July, we actually see the generation pick up to the same level as previous year. Through our dedicated workforce and very robust and resilient processes and planning, we have been able to operate within Tata Power all our assets seamlessly and have continued to provide uninterrupted supply of power generation. While distribution area has helped by us also felt there has been considerable recovery and demand are now close to the pre COVID level. We have also done an excellent job in taking over the management of the Central Nourisa Distribution, which is our JV with Purisa Government, PP Central, Purisa Distribution Company during the pandemic period. And on June 1, this entity was taken over by Tata Power. This has 2,700,000 consumers. And with this, we have become a 5,300,000 consumer utility, becoming one of the largest distribution company in the country. We have been enthusiastically welcomed by all our customers and also the employees and various stakeholders in ModiSA. And they all feel very confident that together, we will be able to deliver a performance as good as we have been doing in Delhi and Mumbai. In our renewable assets too, we saw higher availability as we took over operational control of some of these wind sites and improved availability of our solar sites, too. However, due to the delayed start of the wind season, generation was impacted in the month of June. We do see a subdued wind pattern this season. The major impact of COVID-nineteen was felt in the EPC business. Solar EPC projects have got deferred, leading to lower revenue bookings during this quarter. Similarly, Tata projects has experienced a significant decline in revenue. And the profit of the EPC business, that is both the solar and the EPC business through Tata projects, have seen a reduction in profit by nearly INR 86 compared to Q1 of last year. Despite the reduction of INR 86 of profit in EPC business and losses and another losses of 31 crores in Sesu in the first month of takeover, we have still clocked a 10% growth in the reported FAC to INR268 crores this year compared to last year. This has been driven by the consistent performance across all businesses, strong performance in Triadbras and significantly lower losses in CGPL and reduction in interest costs. With nearly 60% of our capital employed in regulated business or with assured stable returns, our returns have been largely protected from this demand slowdown. As you would see from our results, most of the businesses have delivered consistent performance with significant improvement coming from Mundra, where losses have been significantly reduced, which has been, of course, supported by lower coal prices, higher coal blending and better coal sourcing and logistics management. Due to the fuel FOB under recovery has been lower. And this year, it is at 46 paisa and is at the same level as was last year. The consolidated revenue stood at INR6671 crores compared to INR7567 crores previous year, mainly driven by lower generation in conventional assets, lower car purchase costs for distribution business, leading to lower revenues, offset by capacity additions in Renewables. The consolidated EBITDA in this quarter was 2,037 crores, mainly driven by improved performance in CGPS. The lower coal prices and EPC businesses affected the profit from our joint ventures in this quarter, despite which our underlying business EBITDA came in at a healthy INR 2,214 crores in this quarter. During this quarter, the company won bids of three forty five megawatt solar projects. We have also recently won another bid of three seventy megawatt, for which formal letter of award is awaited. With this, the company's solar project pipeline will grow to fifteen fifteen megawatts, which will take our renewable portfolio to 4.1 gigawatts. Our existing solar assets improved their have improved their availability from 99.3% last year in the same quarter to 99.8%, and wind assets have improved their availability from 93.3% to 96.5% this quarter. Similarly, solar EPC business continued its rapid growth with total order book now at almost crores with nearly two gigawatts of large projects. The slippages in project execution during the quarter is expected to be covered in the later part of the year, and we have put in place our plan for ramping up the execution during the year. We expect to cover up the delays and achieve our FY 'twenty one revenue target for EPC business. We also welcome the policy the government policy of local manufacturing, which is going to give us significant scaling up opportunities of renewable business because of the domestic manufacturing in India. TPSSL will support this self reliance policy and is already expanding its cell and module manufacturing capacity to be increased in this year. Let me now move to the divestment process and debt. As all of you are aware, we completed the transaction for sale of ships during the COVID period and have now received the full consideration. By June, we had received USD 130,000,000, and the balance of the total consideration of USD 212,760,000.00 was received in July. The preferential issue of equity shares of Tata Sons was approved by the shareholders in the AGM, and we expect to receive INR 2,600 crores in this fee. Both these amounts will be used for debt reduction. As you would have seen, the net debt has already reduced from INR 43,578 crores at March to INR 40,099 crores by end of this quarter. We are also working on monetization of other assets, which we expect to realize within this financial year. Work on creation of INVIT for our renewable assets has progressed well since our Board meeting, approved it on second July, and we are on course to sign the nonbinding agreement by end of this quarter. We are confident of completing this restructuring by this year. Creation of Inwit will not only allow us up fronting future cash flows at lower cost of capital, but also create a platform for future growth. We intend to use this structure for significant scale up of our renewable portfolio. While we work on reduction of debt through divestment and restructuring, It is heartening to note that existing businesses have generated strong cash flows to support CapEx as well as debt repayment. Through this robust framework, we have been able to reduce our debt to equity to 1.81x versus 2.28x a year back and net debt to underlying EBITDA from 5.46 to 4.44 during the same period. Let me now move to Mundra. The under recovery with falling coal prices have reduced over the period. With the various initiatives undertaken, loss funding has been also brought down. While we are still working with the procurers to resolve the non pending issue of PPA amendment, which has delayed the resolution, the company continues to work on all options to optimize its cost. As you are aware, the Government Head of Gujarat has moved our case from HPC framework to the GERC approved framework, which they adopted in case of one of the other power companies in Gujarat. We are in discussions with the states on securing IND approval for the compensatory tariff framework and hope that all states take a pragmatic view in resolving this issue in benefit of all the stakeholders. In fact, the Maharashtra government has approved the proposal for PPA amendments in line with the HPC directions, and we do hope that the other states will also follow soon. Update on Rajaadh MCE2. Rajaadh continued its strong operational performance, achieving a 78% availability in last quarter. It is now third in the UP merit order dispatch and is a critical asset for servicing demand in UP. While receivables continue to be a challenge, we expect a significant portion may get liquidated from PMC RDC package, which has been provided by Government of India. We have now completed two months since we took over K2 from and through PPCODL, we have made considerable progress on rolling initiatives to improve operational performance and bring better efficiencies and better customer service. Work on meter replacement has been kicked out. Similarly, all the other works relating to ERP, new billing and collection software are going on, And we do expect that in next one to two quarters, many of these new initiatives will start showing results. The next one year will be very interesting, and we are confident that with the support of our employees from Setu, our employees from PPCODL and the people of Odisha will be able to replicate the Delhi success in Odisha II. I now turn towards the restructuring of businesses that is being proposed. A decision has been taken on restructuring, which has been announced today. Continuing further efforts with our intent to strengthen the balance sheet, the Board has approved scheme of merger of CGPL, Tata Power Solar and Aftab with Tata Power, subject to regulatory approval. This amalgamation, subject to necessary approval, is part of a strategic initiative to simplify the company and the group holding structure and a broader plan to set the company for future growth through fiscal consolidation. The merger aims to achieve the long term objective by facilitating efficient use of cash and is also likely to improve the ability of the project in getting funding to sustain its operations due to their financial position. Despite being one of the most challenging quarter because of COVID, Tata Power has been able to deliver on some of the significant promises it has made on strengthening the balance sheet. We are excited as we set ourselves ready for Tata Power two point zero journey. At the same time, as the time available on an earnings call is short and the focus is more on the results, we wanted to share with all of you in more detail the strategy for turning around the company. During the COVID times, we are now organized a virtual analyst meet on nineteenth August to discuss the same. We will be able to share with you more color on our strategy and growth plans during the meet. Our IR team will share the details of the week shortly. I now hand over the call to Raymond for question and answer. My colleague, Ramesh Tukramaniam, the CFO and my other senior colleagues are here to respond to your questions. Thank you. Thank you very much. We will now begin the question and answer session. The first question is from the line of Funeet Kulati from HSBC. My first question is on Mundra. So you said that there is a progress in Maharashtra side. Can you give us an update on what's happening with Gujarat and some of the other states? As far as Gujarat is concerned, I mentioned to you that they have moved from HPC to the GRC order, which was passed some time back for another imported coal based plant. And there has been certain recommendations of GRC. We are in discussions with the Gujarat government to understand what will be the implication of these on CGPL. And hopefully, we should be able to come to an arrangement so that the amendment of total PPA can be agreed. Maharashtra, of course, has approved as per the HPC. So based on that, we will be taking up with the other states also. But can we not start segregating the PPA now? Or is there still some hurdle to segregation of PPA? In principle, of course, as you know, the government had also indicated that there is legal reason for separate TPA. Right now, the Marathi government, as it is approved, I think it will all happen at CRC level. So we have to first kind of finalize the PPA with Nizar's comment. And then I think we can from there, we can handle it. Any expected payment? Well, it depends on now when we have, of course, Ujar's comment for requisite changes in the PPA. So let's see what when that happens. Because of COVID and other situations, the governments are focused on other issues. So we are hoping that will be thick enough. Okay. Okay. My second question is on CSU. So within a month, there was an EBITDA loss of INR36 crores. Is that how one should think about it? Or if you can give more color on what is the positive or profitability for the same period? So our advice is, I think if it's such a large distribution company. I think we can't jump into conclusions in one month. This will have to run for two quarters before we get a handle on the trajectory. So I would say that we should avoid discussing really stable financial numbers until it gets stabilized. And it's right now really in an interim stage. Okay. But at least for the next two quarters, is that the result one should resume? Again, you're wanting me to quote numbers. The point is it all depends on how quickly work starts and how quickly our CapEx program and improvement programs take shape. So what we could do is probably in September, we could report how that is shaping up. It's too early right now to really speak about run rate. Sure, sure. My last question is on Briag Raj. Is there any further capital infusion requirement from our side? And how would the earn out of this business? So when does the dividend get paid out? And what are the other payments that we intend to receive from Brihad Raj? We receive payments in two different ways. On our investment, which is in the nature of debt, we get returns as well as we will start to get dividends from that data. So right now and the third thing we have is a fee because we are also we are for managers. So what you will see in the chart of our numbers is a combination of a fee and the interest that we get on the debt instrument that we have put. So to your first answer, first question, CapEx, the company looks like in good shape to take care of its CapEx, although we have planned for some amount going forward, especially on SGD and other things. So we will we have allocated some funds for that. The company is doing very well. So they might even do it themselves. So they have some receivables issues, which is why the worry is there. Will you need to improve further? Or do you think they can sustain on their overseas? Think they should be able to sustain. And even their recoveries are now getting done. The companies are now in the list of top list of people that will be benefited from the scheme. Okay. So just following on this, on your INR24 crore of pad for your shares on Visiting Power, how much has the cash actually flowed It's also converted into cash, obviously. It's a matter of probably, I don't know whether the payments are being made out or not. Because the dividend will probably come later, the debt That is, we have put liquidity there, right? We can do interim dividend. And the fee, of course, is a regular one. So the annual fee is a regular one. The next question is from the line of Sumit Kishore from JPMorgan. Go ahead. Evening. Thanks for the opportunity. Reduction net debt is indeed a step in the right direction. The first question I have is could you elaborate on the time lines, bottlenecks, details inside of the assets that will be injected into the Inuit? And what stake are you looking to offload in the renewable projects to the index? So to make the current, as you know, the rough size of the assets we have is close to INR 20,000 crores. And that's the EV of this business roughly, plusminus whatever you take for valuations. So and all of these assets would land up into the EBIT in the next few couple of quarters. And as to your question on what is our stake in that, so one of our objectives also is that we would ultimately deconsolidate our debt. So therefore, as you know, it will be probably less than 50%, but may not be much less than 50%, probably thereabouts. So the rest will, of course, be investors. That's the plan currently. And so because Umit would have seen operational progress. Yes. And the pipeline would get transferred as of today? Today, we have close to four gigawatts including pipeline. The operational assets today are about 2,650 megawatts that will go. And by the time we open the inventory, there is a certain qualification criteria for what is operational and what stage some assets can go if development is at work stage. So maybe some will go in that. But INR 2,650 crores will also definitely grow. So as of date, you would say that against INR $2,006.50 crores, what how much debt is 15,000,000 of this for the operational assets? INR 11,000 crores. And $10 of INR 1,000,000,000 is related to the operational guidance. So there is projected debt also for this. So we can't tell you the date at the time of transfer. Okay. I understand. That will also have internal debt also. Okay. Okay. The second question is in relation to TPSSL. You mentioned in your opening remarks that the cell and module manufacturing capacity will be expanded. So could you talk about what it is currently for cells and modules separately? And what is the plan in terms of increasing it this year and given the opportunity spectrum will be a 6 figure roadmap? No. So we haven't got our plans approved yet, but the plan is in place. We have an existing plant about 400 megawatt of cell and module. It is already under the implementation. So the plan is from sell 400 megawatts, it will go to five thirty and the module is $3.80 to five thirty. The exact number Rahul will share with you, Okay. And on the solar EPC business, the INR8700 odd crore of order book that you have, I mean, how do we look at the profitability of this EPC book? I mean, they come out of some of the COVID impacts, but how do we look at this? Well, Devlin, the EPC businesses are launched today. Nowadays, we're already in double digits. Certainly, it's a lower number, but we will not give you the exact number. All we could say is that COVID issues are leading to mostly time overruns. And these time overruns are pretty much taken care of by the fourth major projects and also the specific there are notifications from government granting extra time for these projects. So we don't see them seriously affecting profitability, the timing of the project completion. Got it. And just the last question. I find the presentation that your working capital has actually reduced in a quarter, which was such a disruptive one. And we've been finding that the overdue payables for SUVs have gone up meaningfully. So what is really the driver for that reduction in working capital? First is that, this is January elections, okay, number one. Number two, we have also done labor of factoring. And but remember that these are all non factoring for just selling receivables, they are also getting collected. So these are already crossing one of the cycles. So in that sense, that is one. Secondly, extra suppliers that in many cases have also helped us in improving our working capital. So for our coal purchases and other things, we have been able to secure very good terms, and that has also helped. Yes, I think the combination of all these things that have helped us, have excellent control over inventory buildup. So all these initiatives we have taken. Truly receivables have been surprising, as you can you sound, but it is a fact that we have done pretty well in collecting from many of our customers in time. The next question is from the line of Girish Achifaria from Morgan Stanley. Sir, my question is around the merger of three subsidiaries. So I think the benefit of lower tax rate would be enjoyed. I think that could be one of the big things. So could you please help us in terms of time line as to how much time will it take and what kind of consolidated taxes, I mean, for the stand alone entity would you be able to save on? And or are there any other financial benefits apart from rating credit rating benefits that you've spoken about from your presentation? So all the things that you mentioned could happen. But at this point of time, to exactly pinpoint all the numbers would also depend on how the profitability of the stand alone develops and what would be the taxation related issues. That we can't quantify straight away. But yes, it's an overall fiscal optimization exercise. Plus, we also remember that being the SPV, which is not doing well, the borrowing rates are also higher, which we believe we'll optimize by this merger because the balance sheet support will be there. And whatever fiscal savings can come. And of course, there's a lot of compliance synergy and administrative synergy that comes. So but all the factors that you mentioned are to be the drivers for this. So can you just give me a timeline here as to how you're seeing the procedure? And the second question I had was on the receivable side. Could you is it able to quantify like what was the receivable number roughly at the end of Q1? And how do you see it proceeding in Q2, which is, I would say, receivables collections should be better in Q2 from these liquidity measures also coming through at this point? The first question you asked is about time lines. I think the time line is a very, very soon we'll be filing the schemes in the MCLT. So it will be a process which will be really driven from our side. Now for the MCLT process, as you know, it's not in our hands. So timing is not that as we are trying to do it in this system. For sure, our target is that subject to, of course, getting the approvals. Your On second question was on receivables. What particularly you wanted to know about receivables? If you could quantify the absolute number at the end of Q1? And how do you think it should proceed by the end of Q2, given that, I mean, some liquidity infusion measures would be in place at the discount level? So in June, our total consolidated receivables across the company is about INR4900 crores. And if your question is how is it likely to proceed? Given the last four, five months of activity, I don't see a major swing either way. It could lie in the similar levels. Fair enough, sir. Thank you. I'll turn back with you. The next question is from the line of Laveena Cortos from Jefferies. Just two questions from my end. One is on the Ritzwood Coal Mine. How much of the proceeds will be yet to be received? That's question one. Question two on Mundra, just to understand what we understand is the Gujarat government has also said that they will not be higher than what any other state is paying for offtake from Mundra. Is that a little bit of a setback? Or how is it that you all are planning to handle that aspect? I mean will you need all the states to therefore agree to a certain price? Or will you still look at segregating PPE? Thank you. REPRESENTATIVE:] Sorry, missed the second part of the question. Can you repeat it? No, as in are you viewing this as a bit of a setback? Is the Gujarat government is saying that they'll not pay more a higher price than any other state? Therefore, will you need all the states to have a buy in on a price? Or will you still be able to go forward and segregate the PPAs? Just want to understand how you're looking at it. Okay. So let me handle your first or second question first. So the Rajat is not saying we'll not give you a higher price. What Rajat is saying is it should not be a situation that we give you an increase and you sell to somebody else at a lower price. So which could mean that if two of the major states, Gurgaon and Maharashtra, they agree to a common stand, which they have today, barring the technicalities of Gurgaon, the regulatory order, which Mr. Sindam mentioned. Then the other states, it's their choice whether they want to take or not. And we would take a stand depending on their feedback. We seem to have lost the line for the management. Please stay connected while we reconnect the management. Apologies. Please stay connected while we reconnect the line for the management. And gentlemen, thank you for patiently holding your lines. We have the line for the management fee connected. Over to you, sir. Laveera, did you hear the answers? And did you get your answer? Or we lost you somewhere? Sir, I think your line got cut at that time. If you could please Did you lose me? Yes, sir, your line had gotten cut at that time. If you could please repeat. Thank you. Okay. Your first question was on earth swing. We've collected about $220,000,000 and we continue to collect every month. Also, the collection also accelerates or decelerates depending on the coal price movement because a lot to do with the surplus that we've generated with our counterparty, but it is moving steadily. Your second question on Gujarat that what is the meaning of this that everybody should have the same tariff. The answer to that question is that the state always saying is that once we agreed to give you a certain increase in tariff, it should not happen that you go ahead and sell it to some other state at a lower tariff. So for us, that's not a big issue. You asked whether that is a that should be a very big negative. No. It is always understood that Ulaq and Maharashtra, if they are on board, then the other states are likely to support us. If they don't support us, we have alternatives, which we will work on once we go to CIP after we are seeing that. The next question is from the line of Abhishek Puri from Axis Capital. Congratulations on good sort of numbers, sir. Just got couple of questions. Is on the HPC. You mentioned that one should market this $360,000,000 as a base for the current month, I think, through the first month. What could we look at as an overall fiscal year? I mean, in your budget, what should be the P and D losses or the trajectory that we should look forward to? Have you given a full year number last time? So, Abhishek, what we are saying is that today, we are taking charge, we are taking stock. I think, come probably the next quarterly results, we'll be in a far better position to articulate what could be the target. So this is too early a start and also at a time when pandemic and such like that. And I know generally, we are far more optimistic than we were. So the only issue is that I don't think there's any point in giving guidance right now. I think next quarter, we'll be able to give a much better clarity. Okay. And in relation to this, some news media ask you on the vesting order being challenged by Sunapar as well in terms of giving up easier loss, so it's the target versus what was their independent option during the pandemic. Is that news item correct or we've not seen any tariff on the tariff as such? No, nothing. I think it's not that serious. I think we have asked for certain clarifications because the conditions at the time of takeover and the time of the bid, they were slightly different. So certain questions have been asked. We don't see this as a major issue. I think there's a little bit of in too much has been made too much has been made in the media on that issue. Okay. I think the issue has been that Orissa has had difficult experience in a couple of other players historically. So that's why these issues do arise there. No, I agree. But I don't think that's the feedback we have. Things are pretty much going as per plan, and we are working together very closely with the global deployment. Okay, great. Just two more questions. One, reason for including Afka investments, I believe it was a holdco for telecom shares only. Does it have any further business? And what is the value add in bringing them together? Now more or less nothing is there. Some small investment is hardly there, and it's not really worth much. So it's pretty much inoperative to that sense. There is no other operation there. Okay, okay. So you are more or less extinguishing the entity? Exactly, exactly. This we found as a better way to extinguish it than in any other manner. Understood, sir. And lastly on the Discom, I I see that the numbers that you have given in the a significant increase in their distribution losses. And similarly, if you look at foreign power as well as in Q and A, have seen a significant increase in P and D losses. So did we manage to keep the exchange in such a great way? So, the effort was made to do digital collection. So during the period, we reached out to all our customers and gave them the option for digital collection. And during this period, nearly 75%, the digital collection crossed 91%. So I think generally, the collection was good. And whenever there were some delays, all those are being collected in the month of July. So I think as I mentioned to you, the consumption has also improved and so also the collection has improved in the last two months. I think even in, I think there is actually slight deterioration in that case also because for us, but you are saying you're comparing with the others, that's a separate issue. We've also had pressure, volumes and the mix change of other companies that are supported. The residential mix has increased and that's why the U. Yen losses have increased. Absolutely right. That trend is exactly right. I don't have the ready numbers of P and I reduction versus consumer increase, but this trend is clearly noted. And but of course, sales, as you know, sales have come down, okay? That's clear. The collections have stood up, but sales have come down, and that is reflected entirely by C and I segment. So some other catches have happened from the domestic consumer segment. But I we can give you the numbers. We don't normally refer to Western Ghiraj, Delhi, Raab, so we don't carry it here, but we can share with you that. The next question is from the line of Swanlim Maheshwari from Edelweiss. A couple of questions. So first question is, I mean, sorry to harp on this, but I mean, on the working capital reduction that we see, I think that a majority of that reduction is actually coming from PTKL of about $7.50 odd crores. So this is basically extended supply chain, okay? So now this has been working this is not very long ago that we tied up. And so as new procedures happen, you see this working capital getting stretched. So going forward, every quarter, once it fills up to the maximum capacity of the supply stage, of course, incrementally, it will stop at some place, right? So it's only because of last year versus this year, previous quarter versus this quarter, you will see an improvement. But so it will lead to saturation in the mix. Very well. Well. Very well. It. Sir, the second thing is actually on the CapEx side. Now in your math commentary, Yes. So first is we have close to six fifty megawatts of under construction renewable assets for which CapEx will start to happen in the coming quarters. That is one clear that's about INR 3,000 crores of CapEx that is going to happen in the next eighteen to twenty four months, right? Then the Seju, of course, will happen. So Seju also at least INR400 crores to INR500 crores we are seeing in the next six to twelve months. Mumbai transmission will happen. Mumbai distribution, Delhi distribution will also normally there's a 300,000,000, minimum three fifty to four, four fifty four kind of CapEx will happen. So we have CapEx lined up. In terms of staggering, we are trying to just ensure that we are ensuring that we also run along with cash generation. So that's the tightening challenge that we have set for ourselves. And of course, in the next year or so, we have regulatory CapEx of over 3,500 crores coming from SUVs and other stuff, which will happen from next year onwards, which is again fixed return CapEx. So CapEx is clearly planned for the next twenty four to six months, and it will start from now. No, no, no. It's 'twenty two, 'twenty three and 'twenty four. And that the operating CapEx is spread over nearly three years. Not three years. Okay. And that's specifically for all these environmental related CapEx. Got it. Got it. So thank you. Sir, just in the opening remarks, Praveen sir was mentioning that there is about $200,000,000 of divestment that has come in July. Sorry, this was with respect to our shipping, is it? Shipping, yes, that is the same. Yes. Total price was $214,000,000 out of it, 150,000,000 in June, the balance came in the July. So, okay. So this number will this is still to be reflected in our net cash position? Yes. $70,000,000 is still to be reflected. Got it, sir. Got it. Sir, thank you so much, wish you all the very good. Thank you. You. The next question is from the line of Motu Zara Sewala from Kotak Securities. Please go ahead. Yes, A couple of questions from my side. One is when you put out INR 70, INR 80 crore of cash flows from the disinvestment, How much more is your profit for the current fiscal and following that, and where does that come from, number one? Also, put out a slide on your overall debt profile, some of our stand alone of the INR 20,000 crore order. Of the And then next of losses which could be beneficial on the merger of CGPL with Tata Power? So you asked, first of all, this is just recently a non core assets. So the balance left is among our overseas assets in Zambia and smaller coal assets. Until next six to twelve months is our target, but we think we'll take a little extra time. So they will be close to INR 2,000 crores altogether. And then, of course, the renewable assets when the inventory is formed, we may get we'll get our share of it depending on the final share. So that is another flow that is expected. What else you asked? So the debt profile that we put out in Slide 29 should start about the underground at roughly about INR20000 crores and Vundra at about INR8000 crores and the renewable equivalent is combined about INR11000 crores. Just wanted to get a sense of the INR 30,000 in Tata Power stand alone, how much would be on account of loans extended to CGP and LNG side of business? So what is the core Tata Power stand alone business? So Presto Tata Power, when you If you remember the Westfan acquisition. And then we have also funding losses for CZPL. We used to put together maybe 30 to $40,000 On the carry forward tax losses available in Wundra, that should be available on merger with Tata Power? So together with business losses and depreciation to be closed, 80,000 crores. The next question is from the line Subrat Duvedi from SBI Life. So just wanted to understand from a group point of view, Tata Pump is increasing liquidity in some of the key companies. From an understanding, auto segment is being under a great stress, Tata focus for us in ECCT. For the Tata Power, so many things going on positively, divestment of their exchange rate, working capital doesn't seem to have been too stressed. So what was the reason for this is the raising now? Well, all this while we were asked exactly the opposite question as to why the parent company is not infusing capital so well. So I think the whole idea is, as you know, the CGPL funding has ballooned the company debt. So there had to be an effort to cut it down to a sustainable level. And we believe that once this exercise is over, CGPL is virtually on its own overall in a lower all scheme of things. I mean it's all fungible in that sense that debt comes to the parent, and then you can decide to keep it wherever. But at the end of the day, what we're trying to do is to make the entire overall operations of the company in a manner that the debt servicing doesn't allude anymore. So to that extent, all the concerns around what happens if the tariff resolution does not happen, etcetera, kind of have got baked in now to ensure that we have sustainable kind of EBITDA I mean debt linked to the EBITDA that's generated. And at the same time, there's enough capital for growth in the chosen lines that we have got to play with. So I think this is part of a larger plan to ensure that the company doesn't now have any kind of stress situation. And now it's just that we'll focus on growth and growth alone. So that's the whole idea behind it. So it is maybe you could question whether we needed it today or tomorrow, but actually our plans are quite ambitious. So therefore, think it's all part of the larger plan. Okay, sir. And my second question is on the cash position. So that has increased substantially in Q1 at INR 6,600 crores. So will this remain like this? Or because the repayments are not that high for the full year, or is it likely to come down? Of course, this cash position is not something which will carry on like this. There are timings of payment of also we are also paying back loans as you will hear in the next month. So this will all come down. Okay. Thanks a lot. That's all from my side. Thank you. Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead. Yes. Thanks a lot for taking my question. Actually, most of my questions were answered, but just one doubt appeared when you asked when you answered the question on what part of the INR 20,000 crore debt is allocated to renewable and to CGPL. Now when I look at your Slide number 28, I see a total number of about INR 10,000 crore between both the renewable assets. And on the renewable asset slide The number is close to about INR 12,000. So is it fair to assume that the number is close to INR 2,000 crore that has been given from the parent company to the renewable assets? Or is it a different number? 4,000 crores has been pumped into TPR real to fund the purchase, which we did few years ago. That continues to be the funding for renewables. Now So in Sorry, go ahead. Yes. Look, you tell me, what is your interjecting, Kelvin? So what I'm trying to understand is the EV number, which you said is about INR 20,000 crores, would it not be slightly higher if I actually add the total debt? Because in which case, the total debt at the renewable portfolio would be about INR 12,000 plus another INR 2,000 crore. Is that understanding no, no. Don't mix the two things. That was just an indicative number based on all the debt, which is both internal and external. I don't think you should go into calculating EV using all this. So I think otherwise, you will land up in different conclusions totally. So what is the total debt at the renewable asset, which will be considered for the purpose of paying $11,500 thereabouts. Okay. That's it from my side. Thank you. The next question is from the line of Mohit Kumar from IDFC Securities. Please go ahead. Hello. Yes. Good evening, sir. Sir, three questions, sir. Primarily, first is, why are we merging CGPL with the parent company right now? Why don't wait for the resolution to happen? No, I am not sure why, let's say, you believe, Moez, that which is connected in the first place because the resolution is for a project whose economics are well known, whether we merge it or not. You have the coal price and you have the tariff and you have a gap, right? And therefore, where the company lies, where is the SPVs have got no connection with the tariff issue, right? We don't see it that way. For us, it's more important that we support this company right now and therefore and also the bring down the financing costs. And that's what we are trying to do. And it's in the process. If we are getting fiscal optimization, most welcome. But first and most important is to sustain the company properly. Okay. Secondly, sir, we I saw that we have withdraw there's a we withdraw our demerger some merger process with Tata Power Renewable standalone with the Tata Power Renewable. Am I right? Is it and what is the thought behind that? So if you recall, the whole idea earlier was to demerge these renewable assets and put it as part of the renewable company so that all renewable assets are in one place. Now what is happening is by the time that petition got done, there were changes in our plans in terms of the in rate. And certain assets are now part of the hybrid bid that we won. So therefore, we have to change the whole configuration. So the revised plan now is that only few assets will go to TPR real. And therefore, they will go along with the Invict. Certain will stay in Tata Power for further development because their contract PPA contracts are coming to an end. So we would like to wait for them to be tied up before their transport. And the rest will continue in Tata Power for some time. So it's because of this whole InWit and the renewable plan changing and the emerging opportunities coming up, we have to change the plan. So we would drill that old petition. Does this mean that three eighty megawatt in the stand company must win the contract expiring and they may not REPRESENTATIVE:] be transferred to the Inuit? Am I No, right? Not all. There's a small portion whose contracts are near expiry. Some have already expired, some are near expiry. Those we will those who are tied up recently in the hybrid wind, etcetera, we will have to develop it here. And only at an operational level, we will have to deliver train with, so we will not transfer now. But all other assets, which have a sufficiently long life period left, they will all go to In Vit. That will be done through a normal business transfer. And currently, sir, we are awaiting their renewal of coal concessions for our Indonesian mine, Kaldimha. Is there any development? Well, I don't know the development when was the last update you had, but basically the government, as you know, has approved the law, which governs the change of license. And also the procedure involves application post that law, and we are we have done it. And we are awaiting now the process at the government level. Okay. Sir, on the payoras, how much we are charging as O and M for our stand alone company? And how much it contributes and something on the profitability from that particular O and M contract? We don't normally disclose individual commercial contracts, so to speak. We do disclose equity investments, but not commercial contracts. Understood, sir. Is it possible to share sort of how much is CSU investment? How much you have made? I believe you have made $10,000,000,000 right now. How much you expect over next five years? Initial equity, as you know, is INR 175 crores for our share. What was the next question that what going is forward investment? What is capital outlay for the next five years? UNIDENTIFIED 1,500 crores is the commitment that you made in terms of next five years. And is it possible to share the T and D loss trajectory committed? Yes, yes, yes. That's part of the bid. The bid has a clear trajectory laid out. Is it possible to share the numbers for the next four, five years? Ready. Sure. I'll just I'll take it offline. I'll take it offline, sir. Last question for Tata Tata projects have made a loss of INR24 crore in the quarter. So has the things improved in the Q2? And how do you see this contributing to our bottom line for FY 'twenty one? I do understand the COVID situation is not yet on our control, but it serves to some sense of the number? Well, the projects have begun to now move on the ground, right? So the last of course, the last four months was quite it was affected. But as we see in the last one month also, we've made good progress in terms of project sites commencing. So let's assume that it looks like things will be much better in the subsequent quarters. But you know what, you know, the country's COVID situation continues to be not so great in the hinterland where many of these projects are going on. So therefore, we'll have to wait and see whether there's any significant impact on that, but we are optimistic. Okay, understood, sir. Thank you. You. Thank you. The next question is from the line of Anikit Mitral from Motilal Raswal. Please go ahead. Thank you for the opportunity. So my first question is on the KPC mines. If I have a look at this quarter, the cost of production has gone down significantly. If could just throw some light as to why that has gone down so significantly and what could be the trajectory going forward? So typically, what happens is when there is a price pressure in the mines, two things happen that you do put a lot of pressure on efficiency and secondly, you do negotiate with the contract mining contractors to pull down the prices. So both has happened. And also fuel prices, wherever they were beneficial to the company in terms of contracts, etcetera, that has also panned out. But generally, it will be the mining contract terms, which generally are the ones which kind of help you drive down the price in such a scenario. Okay. So maybe going forward, because the decline has been pretty sharp. We were doing somewhere around $35 to $36 per tonne. It's gone down to around 31.9 So what's the sustainable number? Is this sustainable? No. So at every level, what happens is that depending on the situation and recovery or FOB estimation of that time, mine does plan both the mining plan has repricing also for mining activity changes. So sustainability is a matter of, let's say, you can say short to medium term, this will be sustainable, may not be long term. Understood. And on the offtake front as well, I mean, you've mentioned on the slides that there has been some impact because of obviously the lockdown coming and the overall demand sort of going down. How is the offtake happening at KPC? So offtake in KPC is pretty strong. As you will see, normally, they do about 15,000,000 tonnes a quarter, and they are around that around this number even now. Because they have a certain quota, which is given by the government, it's nearly 60,000,000 tonnes. Normally, that's the range. So that's about 15,000,000 per quarter. So that is continuing to happen. Okay. My second question is actually on payout, Raj. I mean, if I have a look at the Y o Y number that sharp increase has happened, could you just help us understand that to such a sharp difference in the Y o Y profitability? I understand that we've taken over the project, but if you could just throw some light over there. Just one minute. Okay. So this, what you are seeing in the Slide 13 is actually Resurgent, which is consolidated picture of Resurgent's own numbers plus the Prahaira numbers. So and last year, of course, it was not there. So and this is essentially coming from probably the interest on the debt. Yes, it's coming from more of the debt instrument that is put there. I'm sorry, not to be able to understand this. So this INR24 crore number of profit that you've shown over here, what does that include? INR24 crores is the fact. Yes, yes. So what does that include from Prahagraj? So the company has invested in equity and debt instruments, C Series. So this must be the returns on the C Series, which have been booked. So Prahair Raj overall made INR 55 crores of PAT. Our share is 26% effectively 20% effectively, if you see, because we don't hold the whole 100% is not held by resurgence. So our effective share is 20%, plus the interest on the CCD instrument put together is this INR24 crore number. Understood. Sir, another question on the stand alone front. If you know that from the numbers on a Y o Y basis despite us going on the operational front pretty wide, if you could just help us understand why there's a Y o Y decline that's coming? And is there any impact of the new regulations that have hit us this quarter? No. The YOI number stand alone is essentially because of dividend. Last year, we had dividend of INR374 crores. But yes, at the operating profit, if you are operating profit level you're asking, that is that we had certain interest entitlements in the distribution, which due to the change in the NYT regulations, there's been some impact, the INR25 crores, INR35 crores of impact I think on that front. Other than that, there's no major change. And of course, wind, yes, in the stand alone, there is a wind assets, and they generally, in this quarter, has not been very good for wind. Just understanding on that, what's if you could give us a sense what's the impact of the MYC regulation on the stand alone business? Mean, as a whole. So about INR 20 crores. So this is for the quarter? Yes. Okay. Okay. Sir, have another question on the debt slide that you've given on Slide nine. Just two points that I wanted to confirm. So this INR1780 crores of divestment, this would essentially include the fee profit that we've got this would include Synergy as well as Trust Energy, right? Correct. And so we'll get another $5 to 6,000,000,000 from Trust Energy to Fluent. That's the only thing that's remaining on the divestment as of now, right? No. So from Trust Energy, we have to receive another 70,000,000 odd, I mean, quarterly, these are quarterly numbers. Q1 quarter, I have seen $70,000,000 flow. Okay. And what's progress on the SAT front? When can we expect that to be on the sale of SED? Oh, SED, okay. We are close to now closing the transaction. Hopefully, in the next month or two, we should be able to close the transaction because we are getting all the important approvals already and things are moving fast. Okay. And so just on the slide itself, so there is this crores INR1600 of cash that you've received. What is that amount? I'm not able to understand that. The Sesu cash? Sesu cash, correct. There are the customer deposits, etcetera, there you have to have a corresponding investments to be done in liquid state. So those are the investments. So sorry, I'm not able to understand it. So this is something that you received upfront? It's not receivable. You take over, it's just the acquisition acquisition debt and acquisition investment, both are coming in now. So they are cash and cash equivalents, which have to be maintained compulsory as per the regulation. So they are not usable in the sense that I can't just divert that cash anywhere. Okay. Okay. They are supposed to be equivalent amount of back to back liabilities on customer funded schemes. Okay. So one last question, if I may. If you could just let me know on your receivables front, what is the total receivables just for your renewables business, which is Vol1 plus the TPI? So total renewable for Pokhiser is INR1700 crores. INR1700 crores, okay. So just on the front end, we, I believe, had done a bill discounting at the March on one of our receivables for the renewable project. That money then flown through? Because I believe we've done a borrowing on that, right? That's how we had accounted for it. Yes, yes. It has flown through. It has been recycled. Payments are being made. Okay. So debt would have reduced by that amount, right? Yes, yes. And of course, the new responding also keeps happening. Understood. Thank you. That's it. You. The next question is from the line of Sumit Kishore from JPMorgan. Please go ahead. Thanks. I just had a follow-up. After you mentioned that Mundra has overall unabsorbed losses, which can be used for tax credit of almost about INR 18,000 crores. So I find that in the stand alone entity, last year you paid a cash tax of INR 74 crores net of refunds in the stand alone entity. The year before that, it was INR101 crores. So how do we look at it? So for the next few years, the stand alone entity will not have any cash tax liability after Undra comes from the parent. What is the tax laws here? I mean how does it work? Broadly, Sumeet, I mean I'll give only a broad idea about the question which you're asking that we only paid some INR70 crores of tax. This is a wider restructuring, right? There is Tata Power Solar coming in. And soon, we will have InWit being held directly by Tata Power, so that money will come directly. So that's all I want to tell you. Rest, if you want detail, some calculations and details, of course, you can get in touch with our team, and we'll help you to understand it. Sure. Thank you very much. We'll take that as the last question. I would now like to hand the conference back to the management team for closing comments. Thank you very much. And if you have any more questions, you can definitely get in touch with our colleagues. Both Rahul and Kasturi are here, and they'll be more than happy to furnish you all the details and information that is required. And I definitely look forward to seeing you on next Wednesday, '19, to have a much more detailed discussion and sharing with you our long term strategy and plans of growth and how we are planning to turn around the company and make it Tata Power two point zero. So that's all, and thank you once again for joining in the call. Thank you very much. On behalf of the Tala Power Company Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.