Ladies and gentlemen, good day, and welcome to the India Credit Trust Q4 and FY20 results update conference call. Hosted by Eden White Securities Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call?
Please signal an operator by pressing star 10 0 on your touch tone phone. I now hand the conference over to mister Swarman Maheshwari from EDWise Securities. Hi, too. I'm over to you, sir. Plus the q 4 and effectively conference call.
From the management that we have with us today, Mister Farshal, CEO Mister Satish Talmanet, COO, and Ms. Divya Verma, Head Finance And Accounts. I would request a to start with the opening remarks, and then we can have a Q and a session later on. Hi, Charlene. Thank you.
And, thank you very much for joining today. It's our, great what the results as well as in your current financial year completion results. So I so you've seen here a circulated investor presentation will be available to you. I would be referring to the slide numbers for ease of preference for, so that you can be on the same screen. As you see in the content, we have started the retail version in Journey since since inception is listed.
So I will take you through the financial highlights, the key highlights for FY Twenty, and, take it to the overview of the liquid industry outlook that we see and the operational and financial highlights for the year. And, what we do forward ahead? That's just the sequence of events for today. On staging the board is just, talking about now, vision and journey. Since the time we launched, integrated, our vision has been to become the most admired LEA telematian.
And there are certain elements of our strategy and business plan which are being highlighted over here. And these are the pillars on which we plan to achieve our vision. A focus made this morning, which is dependent on long term contract low operating risk projects and stable cash flows. This is something which is the 1st and the most important parameter of our strategy to achieve the vision. The next pillar of our strategy is to value accretive growth, which results in the P accretion year on year.
And creating growth by future. However, pillar, for our strategy is provide predictable distribution, which is quarterly. So the regulations require us to distribute half yearly that we have been inconsistent in customer distribution since this week. And 90% of the net distributed cash flow that we earn is what we will keep this community. And the focus will remain on the sustainable distributions, which means that whatever you distribute, we look forward to continue that for a sustainable period.
And that is something which is important part of our strategy. And the last one is more about, our balance sheet strength. And, managing your optimal capital structure is something which certainly in today's time is even more relevant and we will talk about, this will be more in the subsequent part of the sections. Within that case, we have a consolidated gap on the leverage to ensure that, we, we know what our platform is delivered optimally needed to learn with the clients. We are rated AAA, and, we will continue to look forward to maintain this rating with our proven liability management and selection of assets.
I'm at the moment we are very capitalized and being very capitalized is 4 parts of the plan and we look to ensure that as we go, we will maintain our capitalization in order. That is a vision and a strategy on which different parts of the strategy, which will allow us to achieve a vision. The next slide, slide number 6 is about the journey to lock, considering that is the cloud anniversary of uplisting I believe it is an important, milestone and day for us to reflect back and see how we have said and also, what we promised and what we are delivering. So we listed in 2017, June, and the 1st power sector in which it's a 3700 crores of assets. The 2 assets are fine, with the capability.
But according to that, in 2018, we acquired 17 100 Corrosia assets, 3 from Stella Power and 1 from Technology. Which was funded by a debt because on lifting our debt headroom, debt, capacity was open. We were only lowered at 25%. After this acquisition, our VAT volume reached 49%. And therefore, for subsequent acquisition, we needed more capital.
In 2019, we raised 2500 crores of capital in our presentation. And in the same transaction, the onboarded KKR and GI as one of the largest holders of ILUVIEN. Along with that, we acquired another 5000 Corolla assets from Stella and find out a pipeline of 65100 crores of assets to ensure that our group is also locked in. This transaction in this work period in 2019 allows us for security of pipeline to about 18,000 crores of size. And a good marquee investors on board.
Of the pipeline that we had signed up in 2020. In 2022, in the last 4 months, we have announced 2 acquisitions. Up approximately 2000 crores, 1 acquisition of E And ICL which we completed during the lockdown. And the second one, which we separated the post evaluatively working last night. Over the last 12 months, there has been also a substantial amount of regulatory evaluation that has taken place by Saudi Arabia.
Which we believe is going to provide a lot of impetus to the next engine. 2022 So now the next 2 to 3 years, what we look is to aim to achieve our vision to become the most agile nation. With an annual target of 30,000 crores on-site, maintaining a titillarity and a strategy of value accretive acquisitions and provide prepayment, flexible and VPN growth. So that was about the the journey since we listed, till now, and how our evaluation of engineers and platform has to complete? I'll take you through, the FY Twenty highlights on Slide number, Kate.
It has been truly a transformational and milestone here in, for NDAGrip and for NDAX in general. K. NDAG pass it has grown substantially in this year. We have acquired 6200 Coruso projects, NRSS, OGPPL and NAICM, which more than doubled the AUM. In FY 'twenty.
Our EBITDA and end this year, both have also doubled, almost doubled in FY 'twenty an overall delivery of 60% compounded annual growth rate since listing in last few years. We also secure the partition pipeline at 6500 crores of assets, which will allow us to grow up to £18,000. One of the unique part over here is that, IIM Ahmedabad has issued a case study on Indeed. As a building India's 1st power transmission beam platform. And this study has talked to, insta air the students serving the institution about the infrastructure transformation that is taking Pearson India.
The next is an important part of our year has been that we received market sponsorship, KKR and GIC contributing over a 1000 crores faculty each. Is a a substantial endorsement for the credibility of the platform and the potential and the growth possibility of it. Besides that, the deal that we did also got, awarded dealer there in the infrastructure industry, conference. The unique part about this transaction is also that KKR acquired a majority interest in the manager and the change in control of the entire platform space, which our investors approved wholeheartedly. The next part is an equally important part of the revolution or, integrated in India.
The regulations have been evolving, but the last year was in Bakken because most of the landmark regulations, which enabled successful journey projects were approved by regulators in last So in theory, allow up to 70% leverage for credible enriched operating at AAA, which enable better accretion and returns to our investors. As well as it needs us competitive in the marketplace to acquire for this better competitive environment. Secondly, the regulations that came into existence was reduction in lot size, trading outside from 5 lakh to 1 lakh, which has improved the liquidity in the units. And I'm sure you'll see a tracking back in terms of our volumes in the exchange, and we have seen encouraging trend that included your credit. Can we also encouraged new guidelines with respect to capital raising for index.
So they have published now the rights issue guidelines with Fast Track in Slack as well as pre transition guidelines for enrich surveys for the capital and growth. So among these 3 key changes, So they have impacted the profitability and, competitiveness of Enbridge. The liquidity has improved and the ability to raise capital is made easier. So I think there is, a lot of changes in the regulations, which have enabled a lot more image to cover. And the last one is RBL has also now enabled banks to lend to English, which was a glitch over last year, which has been corrected now.
And the last pillar of the, year 2020 is that we have continued to maintain our focus on robust asset management practices. Our availability across our portfolio is greater than 99.5%. We have built a 50 plus operations team across functions to focus on sustainability of our operations. There are several PhD initiatives we have kicked off and we talk about that in Pepsi conception. And our focus on long term reliability of our platform has also been launched, and it has been successfully done.
What all these four parameters have allowed us to do is to deliver approximately 24% total return which includes the BPU plus the price change in FY 'twenty. We have paid for a credit repair unit this year. Which is approximately 700 crores, distributed by industry. Our growth in NDCF is over 116% on a year on year basis. And we have a pipeline of 65100 crores, which we look to capitalize as we move.
So that has been the highlight of FY 'twenty. I'll come to the a quick overview of integration and then an introduction to the company and and subsequently, we'll go to the sections. So in degrees today is India's only power transmission new platform. And when I say new platform, it is focused on a committed payout and therefore, it is one of the only power transmission we can come in. We have 3000 crores of assets under management across 13 states in India, We own 20 lines of 5000 eight hundred circuit kilometers or substitutions in 7700 and year transformation capacity.
We are okay tripling and have received the life of a contract is 32 years, but we do own these assets forever. And just to provide a little more color on our portfolio, we in terms of hours, we have, 9177 towers under our management. And the amount of metal, because this towers are fairly heavy in the comparison profile, the amount of metal between steel and aluminum that we coal is about 350,000 metric tons. On the next slide, Slide 11. There is a more granular detail of, each asset base, experience, lines, substations, Most of them have got more than 3 or 3 years of operating track record now.
The revenue rate is also provided for each line. And the area is provided for that. Along with that, we also shared the metal company in each asset as is. Provide the perspective in terms of what size of assets are there. You need to talk about this portfolio is But today, we have high voltage interstate transmission assets, 100% with Central Kankapati of power grid and equipment for you.
Availability, our tariff is availability day, monthly tariff. It's not linked to power fuel, or there is no price reset every 5 year with to any policy or regulatory change. We have a very diversified revenue facility. So we have 32 elements. Which carry different percentage of revenue, which is spread across 13 states.
We're not continuing the, verification in reducing the revenue risk on the overall portfolio, which is the clash of management. Our portfolio is their own operate and maintain There is no transport on the entire portfolio. And now we have a credible track record of maximizing our availability and incentives. All these points are captured below at a granular level for further analysis. On Slide number 12, we have corporate structure.
Suprique owns 23% of, shareholding and immediately. Direct power to earnings functions to range 15%. However, Direct Power has agreed to send and take care of the agreed to buy this 15%. Once KKR becomes responsive, which will take KKR building to approximately 38%. GIC will link to 21% and the rest of the year will be the public market capsule.
At the ambition, management level, take care of its majority, with 60% ownership, and they will acquire another 15% that we have these clients in a year from now. Access trustee is a trustee for English under English regulations. And the subsidiaries that you see are each individual assets as per the names that we described earlier. Look, slide number 30 is about our shareholder base. As you can see, we have a robust shareholder base with over to 5% owned by FIR's including KKR And GIC.
A 15% is owned by domestic institutions, including insurance companies, mutual funds, pension funds, and covenants. And what value and number of our retail investors have doubled since 2020. This general debate is important for us because it allows us to raise future capital and grow as well as it allows us to tap in the right investor ways to appreciate the the value of the yield and a stable yield at the goal. Going to the next section, A, about industry outlooks. So you see that the transmission sector is facing tailwinds, and I would say that it's been fueled by tailwinds over the last several years.
And this year is no different. Even during the even during the overall downturn, as well as the COVID impact that we talk about subsequently, There are certain key drivers to the industry, which we believe that is going to ensure that the industry keeps growing. The the first one is on the left hand side, there is a significant shift in supply and demand pattern that is taking place in the country. Most of the new generation capacity that could get launched would be renewable energy, considering the fact that it has achieved great parity. This change on the supply side, along with the intermittent nature of electricity supply from the new business.
Which require greater investment in transmission products. Now on the demand side as well, there is a substantial load shift that we expect over next decade or so with electric vehicle storage and rural electrification coming in, there is going to be a complete transformation of the load side requirement as well. So considering the significant shift on both supply side and demand side, The transmission is one sector which would be essential to invest more to ensure that the grade reliability and while maintaining the supply and demand. But the second big driver of this industry is also the that need to have an efficient claim as your solution capacity grows. Historically, there has been a relative under investment in transmission relation to generation because the generation sector that privatized about a decade earlier than the transmission.
However, we believe that, considering our substantial generating capacity already invested in The incremental investment we will see happening in the transmission time to ensure that a better utilization, a very coordinated utilization can happen of our existing generating capacities. Just to say the number of transmission also rang the first being produced in traffic index of 2019 with respect to a tracking of investments. This was going to the fact that the sector does provide a very robust and regulatory framework. As you can see on the slide 15 document corner, the amendment of electricity to act is also taking place as we speak. And there are crucial reform measures with respect to efficient dispute resolution, payment security mechanism direct transfer of subsidies and inquiry in origin levels.
So all these policy initiatives we believe are the steps in the right direction. And we'll set the sector growth in the right direction. There's also a very high focus on private sector participation which you believe is good for companies like us, which increases the the market that we play in and therefore indirectly we get benefit of. There are also a lot of, ommings happening in the new tariff policy, which will focus on streamlining several procedures to incentivize and disincentivize this com for the right measures. And, the liquidity support during COVID 19 is also one of the signs that government is working towards supporting the sector.
And the last one is, the historical structured policy measures with respect to, the a BBU, GJI, or if you got an IT BS key, we've seen at a working level, the investment that we then we are very confident that it will add to the overall sector. Coming to Slide 15, and and this is something which is very relevant in today's context with COVID. On the right hand side, we have given the chart of demand and I'm sure all of us, have faced all the hardships over the last two and a half months. And as you can see on the charts, Since the end of March when the lockdown was secured in post release, there is a swift and substantial recovery in terms of peak demand as well as power consumption. And if you compare versus the 2019 numbers, The peak demand seems to be pretty much, reaching its peak it's past 11.
Plus consumption also is on the rest of few percentage left. So we believe that for the entire financial year, while electricity convention may be down by a couple of percentage or more, achieving on a run rate basis on a month commitment on a quarter on quarter basis as the government decides to open up the lockdown in country. We will see the power demands come. Has also been very supportive during the time. We have provided, a convention to transmission companies as from the lockdown and the teams are able to maintain alliance, across the country with specific persons.
As transmission tariffs are not linked to power fuel in only days of availability of transmission elements. It was important for us to receive this as essential services tab so that we can maintain a line and ponder the room. If your car also issued service at the end, we is up front period that which clarified that there are no moratorium in the transmission charges. Only reduction of late payments are charged. From 18% per annum to 12% per annum or any payment which is made beyond possible.
So there is no more accrued in providing only the late payments such as have been marginally reduced. In addition to that, as we have seen in the newspapers and, announcement by the government, there is a 90,000 crore liquidity injection into electric distribution companies. Which is being proposed in a pool. And especially to clear the views of generation and transmission costs, we believe that utility will ensure a smooth recovery in terms of the receivable things and we support the sector in the industry. So so, essentially, from a power, sector impact on the COVID policy, We believe that the transmission sector has largely remained insulated to rebound and with the measures taken by the government in the sector, we believe The exception takes me to the operational highlights of our financial company.
To start with, I'd say, we've achieved 100% safe manners across sites and location. For about 600 people working across trucking systems. We have maintained a consistent track record of availability and maximum incentive. Our average availability is topping 99.6%. At Cuts per line at 8.4, which is in line with industry standards.
Our focus on the liability center maintenance with respect to rigorous prevention, preventive inspection, and maintenance, detect correction, and life cycle management have increased in this here. We have decided to invest early in technology initiatives across zone based operations, weather predictions, helicopter supervisions, and for difficulty. Which would support us in our initiative to maintain reliable availability We also saw several, emergency shutdowns caused by events beyond the control like windstorms or, other events, which we could, 1, restore very fast. 2nd, obtain majority of lost time I've been available in the 1st measure of account, and therefore, did not impact our revenue pertains. On the right hand side of the slide 18, we provided our availability, tax, a call, and the incentive that we have earned in the year.
Besides that, we reduced the number of pits per line in this financial year. We achieved the same percentage of successful 100% and 100% safe manner. The nearest reporting has increased for us, which we see as a positive sign because we are putting a lot of efforts in the, education and training. And the solar power generation has gone up in our portfolio with respect to with respect to, our self convention that we are using the solar power plant in our substations. The next part of our, presentation and operational highlights for our technology initiatives.
These are the 4 initiatives that we have taken in this financial year, for different measures. We deploy helicopter survey during the winter to, ensure that we are ready for any emergency in the analysis project in case there's no ground region. There is an impact. We deployed, a new team called Climate Sun, which is developed by MIT specialist, which allow the allows us at a power level, what is the wind speed data across our portfolio, and this provides the lifetime inputs for us to react and be ready for any nationality. For example, they're not extremely useful for us to be ready.
And in case of an event, we will react with them. Drone based asset management or other supervision is being spoken about for a long time. We are doing that in POCs across our portfolio, while the country hasn't enabled yet, but we are visualized of site enablement. As and when it does, we would be ready to utilize that to our advantage for both reducing our cost and increasing availability. We believe this is a a technology in a 3 to 5 years would be commercially viable for India to follow, and there's also the largest cost items for us in terms of supervision, which we can look to reduce with the investment in technology.
And we are looking to invest more in digital asset management produce to ensure that we can increase the reliability and reduce the cost. I think highlights in COVID, we have no COVID incidents 600 people working in our portfolio. Sufficient team are working their night to ensure that, as a team and safe, people remain safe and we are in compliance with all the regulations and guidelines issued by the government shutdown. We also managed the 9 call and fix the vehicle successfully in coordination with the central, regulatory. But the next section of our slide is about the ESG prohibitive, which is something which, we have started doing this.
And, we feel that it is important to agenda. We highlighted the key aspect of ESG impact, which we made on a business impact in which you have a higher stakeholder impact, and we represented what we do in the future. Okay. Environmental GHG impact, we own, 2 small solar power plants on a substation. So we invested some time back and we're using it for ourisbury convention.
We are doing 3 plantation days for the fees that we got. And overall, substantial amount of cost has been paid for the forest land, which we use, which was towards free for a station of the area. On the slide 23 is about social aspect with the primary one being on health and safety, which we've already covered in terms of achieving 100% safe manner, but we go over and beyond that and provide more education to even people who work for us as partners and contractors. 100% of our contractors are received that relevant at CC. On the right hand side, we have provided the specific, data about how much efforts that we have put in in increasing the training as well as reducing the risk of health and safety.
Implementing a pre call the gadgets, which enable us to manage our compliances across the portfolio. And we do several community engagements across our portfolio to ensure that, right of care within the work into a material risk as we look forward. Our board has remained the same since our last two quarters. It's our oldest board with 3 independent members who have been there with us since we listed. There is one member from Stella Power.
Mister Chandra joined up in investment in 2019, and I represent the management of the bank. On the government side, it's fairly active. We've given most of the community, most of our important communities in the majority represented by independent members in KKR, or they have been chaired by independent members. And there's a very active and healthy participation that you want. It is also evident from our EGM results that, for most of the good things that we have done, substantial amount of eligible investors are good.
And virtually majority of it. We have a strong process for internal audit and framework which is implemented by KPMG. And the specific business of its policies are also implemented and followed by the company. Going to the next section of financial highlights of FY 'twenty, this this captures a comment, I'll say, on a on a quarter on a quarter on a on a quarter on quarter basis, we have increase our revenue EBITDA and NDCF by over 90%. On a 3 year basis, we have delivered a CHGR of 60%.
Last part of this is possible with respect to, acquisitions of analysis of UPTL and Venezeal, which we saw over last year. ESL acquisition happened in the month of March. And therefore, while our, revenue for FY 'twenty was at 4 100 in particular Our run rate is at approximately 13.40 crores for FY 2020. A distribution that the board has approved its three d t in the unit 175 crores, which we are distributing. Our EBITDA margins have improved at 21% versus 20% last quarter.
That's it. A receivable there, we ended the year with a very good healthy number of 55 days in collection of 97% in FY 2020. But next chart is about the the NDCF on slide 28. What are in the H2 we have earned 3.70 crores already here. On the H2 level, we are distributing 350 crores of any issue out of that by distributing 175 crores in quarter 4, which provided dilute.
This happens to be also one of the largest quarter in terms of our NDCF because of the acquisition that we did as well as, working capital recovery that happened in quarter 4th, and we ended the, quarter with 266 crores of NDC So, typically, we are paying more than 90% of NDCF for HP. And, we are maintaining 175 crores on CVC units for quarter 6. As we discussed earlier, we are focused on my my main managing the reverse balance sheet. We are maintaining the tripling our weighted average cost of borrowing is at 8.6 we're still only awarded at 50 percent negative to a year end and therefore a substantial debt headroom available for us. Our EBITDA put interest cover is also at a fairly high level.
We closed the year at 4.75 crore of cash, and therefore, which will allow us to maintain, robust balance sheet in the subsequent period during the scenario COVID Yeah. A very source of borrowing. We are borrowing from NLD Bank NCD and ACD, so a variety of mix of both bank and capital market investors. And from our intermittent refinancing schedule, we do not have any material refinancing or price coming in over the next, you know, couple of years. The first that we're financing is coming in FY Twenty 2.
And we believe that with our size and rating, we would be able to mitigate that. Skype 30 is about, what we have promised and what we have delivered. When we listed, we promised a low volatility superior total return to our investors. And I'm very happy to see that our beta is 0.07 in comparison to all the other industries and stocks that we're compared with. Which highlights a little bit, no volatility, but our total returns are substantially higher than the comparable indices.
So we have delivered a 52% total return, including 3.5 rupees of distribution and the price change. Coming to the next slide, which is looking ahead. Our outlook for FY 'twenty one remains positive. We have a lot of pipeline assets, including, select power assets which we are looking to acquire in FY21. GPTL, which is part of the claim, the cash out of the 6500 crores, we already taken approval and having yesterday's book is substantially positive for that.
We look to continue that transaction. We evaluate select opportunities in solar as well. With Central counterparties in focus on creating more pipeline of transmission projects besides the existing health. We'll work on maintaining a strong balance sheet. We'll maintain and we'll keep on our focus on maintaining adequate liquidity to mitigate the current uncertainties in the country and any other unprecedented scenario that may come up.
We have, at the moment, sufficient cash balance and working capital to sales. We look to diversify further our debt sources and elongate tenants as we, look to increment the facilities and reduce the cost of risk. Focus on risk asset management would remain high level. We would ensure that we meet our commitment of highest availability. We invest in technology, invest in EHE during the year, and ensure that we have delivered a world class EHS enrollment practices across our portfolio.
We'll continue to play our role as an industry stewardship room, by spending awareness about integrated as well as as well as in general. There are some policy initiatives which we are working with regulators for this increasing participation on that security site, like insurance and fee at regulated schools. And besides that, we are still working with Citi or requesting them to reduce the lot size from 1 Lakh, minimum 1 Lakh to 1 unit of par with equity. So we believe that if you continue our focus on FY 2021 on this, we will be able to deliver superior total returns stability and growth in industry, what we had done over the last few years. With that, I would, take a pause and certainly open for question and answer.
Thank you sir. Anyone who wishes to ask the question, please press star then 1 on the touch tone telephone. If you wish to remove yourself from the questions, you may press hour than 2. Participants are requested to use handsets while asking your questions. Anyone who wishes to ask questions, please press star Benoit.
The first question is from the line of Morgan Stanley from RBC Securities. Please go ahead. Good afternoon, sir. Congratulations on a good set of numbers. I have three questions I have primarily.
Firstly, are you guiding for any air 521 distribution? We are totally in the airline. Is that the point or the last year? Yeah. So can you, on the date, this, of course, the the the amount 62,000,000,000 And, you know, given that the, the rates are used, do you think it's the right time to, you know, look at some, you know, reduce our interest rates on our bonds or, you know, our our loan portfolio so that we we have more cash flow to distribute to our investors.
And forgive me, given the fact that the, how do you see the given alignment given the fact that we are trying to target, from 120,000,000,000 to additional 150,000,000,000 of asset over the next 2 years. Do you think COVID has changed anything for you This thing is we can be making it become it'll become easier with time and become difficult with time. That's it. Okay. Thank you.
So I think, one of the lines for questions, one by one, on terms of guidance, We believe that, there is a lot of flood in the country today. We're looking down the stricter demand lockdown, etcetera. So while we are have a very positive outlook of the sector and transmission would remain, a safe sector, We are just waiting to see the impact of COVID health proceeds when the lockdown opened up. So we are cautious in watching this scenario. And therefore, we have not provided the guidance, formal guidance of FY 'twenty one.
But we are positive. But this is just the 1st month that we are seeing 1st couple of months we are seeing after COVID. We've seen all the positive signs of recovery for the sector. Where we can be in collections in the past couple of months. We've seen the power demand coming back up and we have seen, you know, policy makers supporting with liquidity.
All three are positive signs, but we'd like to wait for a few months more before, you know, we firmly committed guidance. So that's, on the guidance. On the debt, I think we agreed to the debt raising, the debt markets are good. We are seeing interest rates evening, but on the other hand, we've also been locking our interest rates, for some period. But we do keep evaluating opportunities where there is a possibility to a prepaid certain loans and borrow cheaper.
So as in when we do, we come into our end this year, but it's not the entire 626200 on the growth and the refinance on one day. Because, we have locked in past updates. And therefore, you know, we don't have an upside or we don't have an downside in many of them till the reset date comes in. On the pipeline side, I think, the record question that we are, do you see a pipeline? I think we issued a very healthy pipeline in my presentation I saw about 115,000 crores of transmission bids that are taking place in X One.
There are several 10,000 crores a bit back to place in last 6 months. So I think the pipeline is healthy. We will see assets coming in. But for us, pipeline is more on a year on year basis than on a quarter on quarter basis. Because our pipeline comes from completed projects, but we crack in a couple of years ahead and showed you.
So we see a healthy pipeline. I mean, in the sector. And the last question that you asked about the COVID impact, I think I would say, in a minute, every M and A transaction is a new M and A transaction. And before, there are specific, sometimes things can become difficult. I would say COVID has more logistical impact than any deal making impact.
Right? At the end of the day, all of us are working from home, and therefore, speed does reduce in terms of every logistical, methods. But other than that, I think, we are focusing on what we did before. So there's nothing that has changed in the market. So we we are fairly positive on that, but I think logistically, things have become slightly difficult to operate, especially in an M and A transaction considering the lockdown.
But we believe it will open up, with the new signs coming in soon. And can you comment on the collection, if you need to comment on? Sorry? Sir, any comment on the collection for the appeal only? So oh, yeah.
So without any liquidity support from government, etcetera, as well, you know, complete lockdown with such a loved one. We have received more than 50% collection in a premium already. And may I have any friends, so we are seeing an encouraging trend out there also. Okay, sir. Thank you, sir.
Thanks. Thank you. Hi. Thank you very much, this will be here, in, in the grid and, led by our site. Just wanted to convey, okay, thanks.
And, when you present this, even last 2, 3, and so many accidents are happening in events and failed in MDFC, in which I found in some projects and all. And the way you navigated this journey is really commendable. So my hearty times and condition even and checking the trust you created. I think the indicate units, holders trust is because of the current management. So just wanted to say thanks, Al.
Thank you very much. Thank you, Mr. The next question is from the line of Dhruv from PFS here at PFS Management. Please go ahead. Sir, if you can please share some light on the, the upcoming CDs.
Any timeline, if you can share them, I'm sorry. Yeah. Only three, projects that are required. Any timeline that you can share? So I think you'd be what what is published is already let me apply.
What is it? You're on a sorry. So, yeah, so we are we are working on closing it. We have received the initial approval in 11th May. In the AGM and that, that is positive.
So we are, going ahead with the execution. And, I mean, we will come to investors for approval only we are fairly certain to close the transaction. So I would say that, we're working on it, and it should be soon, announced. Okay. So all three will be lost.
The order should be completed within this year. I mean, your question is? Yeah. Yeah. So, sir, GPTL will certainly be completed in this, about a very early on KTL and NER assist directly under construction.
So we would I will need to comment on that till the time it's commission. So we certainly are we are monitoring those projects. We are doing diligence on those projects. Because they are a target projects. But as in when they are commissioned, that would be a more appropriate time for us to commit a timeline.
Because at the moment, they're still, part commission. They're under construction. Okay. Okay. And, sir, these two things, so if a projected commission how do you also after that, do you agree with the agent in terms of the operation of the operation of the line and then, go ahead, or it can, I mean, you, it isn't only process, like, like, like, that happens?
So and the point is, if she is not really something that your September. Do you probably require it in October or or will it take them? So it depends on on the type of arrangement we have for a particular project. For example, for, GPTL, KTL, and NERSS, we assigned a framework agreement, and therefore, we have access to the information and to the project. And therefore, we we start monitoring and doing diligence much earlier before it's commission.
Because that is only an agreed one between the two parties. However, for, let's say, a 1st party project where we may not have a direct access early on, we have to wait and take part in the process. As I mentioned, the recovery opens up, we look at that. Okay. Okay.
Okay. Got it. Since you can be, in in Michigan, that we can, in next few years? Sirin? So do you let me tell you next 2 years, or we are planning to refinance them?
No. We plan to refinance but the scheduled settlements that we have presented over here are 60 or 62 crores and 77 crores in FY 2021 and 22. Whichever schedule 1, but we would be looking to refinance. Okay. So, broadly, if I if I can correct your, the distributable cash flow should increase in the next 2 years, at least on the effect in the events, given partly because of the acquisition that you've done, that is and the full directive will come in effect with you and and give you a question that you do.
Yeah. I think if if it was continue, I think, with the 2 acquisitions that we look to do, the NDC should increase. However, as I said, you know, on a guidance front, we'll have to wait and see because, working capital is part of the NDCF of how the recovery of the sector happens to to really give you an exact guidance on that. Sure. Yeah.
I understand. But, sir, broadly, if I have to understand, of the n NDCS, almost 90% has to be distributed. Right? Yes. Okay.
So that that it is the minimum that should happen. Correct. Can I help you any digits? Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference call, please limit your questions to 2 per participant.
Or any further questions, you may come back for the follow-up. The next question is from the line of Patricia Ora from Unifi Capital. Please go ahead. Yes. Hi, Raj.
I just, you know, the the on the collection base, just wanted to clarify of your April and May revenue, you've collected roughly 50% of that. Is is that, I'm saying, correct? Yes. Okay. And just as a rough sense, you know, you closed the Frontier with 55 dates, were how much do you expect it to get long dated now?
Just as rough by 4 21. Yes. No. I understand. So I think yeah.
Fair enough. I think it is a it is a rough estimate in terms of impact. We believe that there would be about, 30 to 30 days of expansion of working capital that will take place because of this. Okay. And, and maybe with the liquidity measures kicking in, from July onwards, we will see a recovery me on that, but I think that we'll have to wait and watch.
Right? But our initial estimate is an impact of about the 20 to 30 days of working capital impact to start with. And, we ended the year with sufficient cash balance to meet that, require meet meet that kind of, expansion. K. Fair enough.
Thank you. If you just one more, you know, on, any other shift, your bigger asset in a previous presentation, you had mentioned that the completion date was around November of this year. Would you know, a post this COVID thing, has is it on track or has it got delayed a bit? How how is it looking there? Okay.
So I think, yeah, it's tough for me to comment on behalf of Stella Power, but I would say that, you know, certainly, there is a premium of impact to everyone in the country, right, because you're not able to work. So I would expect a couple of months of delays for sure on account of this for me. Having said, sir, the regulator have already awarded that extra time, to to all the sectors. Some have done explicitly, some have done explicitly. So that government has been very clear that this will be considered as a post measure for extension of time.
So, I mean, I can't commit and they have a stolen car, but I would say reasonably, it's reasonable to assume that, people haven't worked during, completely lockdown. There will be a couple of months of impact. So just one last question, on any guidance on, on your technology requiring solar assets, anything in the near term? Any visibility in the near term for acquisition solar assets? Yeah.
And what size would differentially. Yes. So to answer that, I think it's very clear on our outlook, it is know, it's showing as 5% of our overall page. Right? So it is actually a very small part of our strategy and, not the code.
We have taken the enabling resolution for, solar expansion. However, we have been evaluating cautiously and, have to provide a timeline of when we will acquire, but what strategy we gave clearly is what we can retake. That will require small. It will be a small percentage of our UN. We would, look for only central counterparties like checking and TTC.
And we'll look to acquire good quality assets. So at the moment, I think these are the 3 things which we are focused on. There is no no special goals for us that we have to acquire. We are more focused on, you know, risk management and acquiring what is right. That's what we've been doing over the last 3 years and we'll continue.
The next question is from the line of Suraj Gupta from Maxim Capital. Please go ahead. Good evening, Hector. And thanks a lot for the a strong set of numbers. So, you know, I had two questions.
Basically, one is on your guidance. I think what it appeared to us at post our NDC effort is going to be much higher compared to what it was, the run rate in FY 20. So people are expecting a higher kind of BTU going forward. But nevertheless, you know, because money has got no color and you are seeing some, you know, turbulent because of the COVID situation. Is it better to put a halt on acquisition right now rather than, giving at least a minimum 3 rupees guidance for the complete year.
So why pursue acquisition over a minimum guidance? If things are, things are looking a bit further there for you. That is number 1. And secondly, the collection. So should I ask the second question or you want to answer me first?
No. Please go ahead. Please go ahead. Yeah. The second question is on the collection, efficient So I think you have given the collection percentage for the last 3 financial years, and I think there is some you know, some sort of volatility in the same.
So if you can throw some light and also you said 50% you have collected for retail and main at 521, So how does that compare to a 1,000,000,000,000 May of FY 2020? No, perfect. Good question. So to answer your first question, Suresh, you know, one is the balance sheet strength and the other is position. I think that we are looking for assets for which we have only raised capital.
So for example, for EMICL, GPTL, and other projects, we've already raised capital, liquidity capital last year. So at an acquisition level, we are still making it an accretive acquisition. The working capital changes gets adjusted along with the acquisition. So to be honest, these 2 are completely separate decisions. If we are, you know, if you would ask this question about a month and a half ago, that that what is the scenario of, you know, acquisitions versus balance sheet?
I would say we would have been far more conservative because we would not know how the sector is going to react, how the collections are going to react. In the in the in the month of 8,000,000,000. Looking at what we started, we had all the healthy signs that we have seen in the sector, which is, recovery of demand, collections coming even without liquidity support, which is from liquidity support getting announced. So I believe these 3, 4 measures, again, we are far more comfortable for the planned acquisition. Now now coming to your question on, higher NDCF and DTU announcement, Then what we are doing is not declining that.
We are saying we would like to watch for the next couple of months of how the situation evolves in the country and in the sector before we can be informed about that. So being at the moment where the country is an industry, it's it's fair for us to, resolve the rights for not providing guidance at the moment. As we see, for this supplement, how the things unfold. Your question, certainly, we would the conservative in terms of acquisitions, but that is a big business. Right?
We look to apply cash as well as it is in accretive working capital adjusted acquisition is to only add to the details. But we are not saying at the moment that the NDCS will not grow this year. Or BP will not grow this year. So we're saying that we are gonna watch for next couple of months before we provide, you know, firm guidance. So that's on the on the guidance a bit.
The second question was on, collection efficiency. So I would say that, the changes that you have seen between the FY18 1920, I won't call it a voluntary scenario. FY19 is slightly low because we acquired NASA in between with a slightly longer, receivables at that time. So it is also impacted by overall, you know, the asset portfolio which was there. So they're not completely comparable.
Because, there are parts we have a password, some assets have different working capital at that time when we acquired it. Having said, sir, I would say, you know, 97 or 100% or are you going to be valued at 95% of, collection is a fairly good collection in the sector and we are fairly comfortable with respect to that. Understood. And how does the number compare for April and May collection compared to last year? Oh, sorry.
Sorry. I did that question. So, So if I ask a very specific question, I'll give you a 10. So quarter 1 is typically the newest collection quarter and quarter 4 typically in the highest collection policy. And before, if you look at our initiative in Singapore, it's typically highest because of working capital.
And you would see, you know, even in our slide 28, there is a recovery of working capital that has happened in quarter 4. Now That would be quarter 1 is typically yours. What I gave you, unfortunately, the 50% of our revenue. So if you translate that to a historical cracker, that number would come to the 60%. Understood.
Just one comment that you collected, 85% in this quarter. Understood. Just one comment on your previous questions answered. I think it will be still, I think some investors will still appreciate if you come out with a statement saying that, you know, for committed acquisition, it is always fine. But for new acquisitions, you know, First, you should ensure the 3 rupees, minimum, payout per quarter as we have been doing before looking at any acquisition.
If you see any 3 to 3 rupees per also, then you should, you know, first take out the 3 rupee review over the new acquisition. No. I think I think that's that's that's that's a fair I would say, recommendation and suggestion. I think, that's why we are also focused on that that, That will focus on the distribution first in acquisition. I think that's a fair point.
Understood. All of that's for the coming quarters, Krishna. Thank you. Thank you. The next question is from the line of Sara Sarani from IDFC Securities.
Please go ahead.
Good afternoon.
The question pertains to
that election my question pertains to the collection part. This 50% of your revenue collection, I assume it is in the normative course of business. There's no, sort of extra, request by any discount or a persona code that you should not collect this amount for some time or anything like that?
Is that the No. There is no moratorium. There is Yeah. There is no moratorium. There is no recourse.
There is no waiver.
It's a normal course of business, and you expect it to collect over a period
of time. Correct. Exactly.
And, second question was more on the solar assets. Can you elaborate a bit in terms of what kind of assets are you looking and what kind of, sort of, financing and and, distributable cash flows you will be looking at. And some sort of, direction in which you can point. I understand you cannot tell exactly till you have asset on table, but, directionally, how are you thinking about solar asset acquisition?
Oh, sure. So, directionally, as I said, we are looking for secure and NTPC assets only. You're looking for, I would say, in smaller acquisitions. So if you assume, you know, we have 12,000 crores left hand 10% would be, you know, maximum, 700,000 crores of acquisition, maximum. We're looking at assets, which has an operational And and coming to your question on, coming to your question on, the the NDCET, Now that is linked to, obviously, overall size that we acquire and the way we finance it.
But, you know, if you acquire a 1000 growth project at a reasonable value, it would result in a decent accretion. Obviously, specific members are difficult to point, but, that will result in your specific accretion to our system.
Do you have anything on Horizon at this point, the way you have a sort of transmission as it's lined up, or is it more like a as it comes, we will see.
So okay. So I think we we have taken the enabling regulation at the moment for approval. Now we keep I mean, this is kind of, let's say, first, we have developed a strategy of what kind of assets you want to acquire. Which which ensures that we can give guidance to both investors as well as to the to the market of what are we going to evaluate. So we certainly keep evaluating assets, and we have some assets which we are looking at.
But it's tough to commit on whether you are going to end up acquiring that or not because there's a long road, right, in terms of diligence and So a lot of factors will put into place. So we will be looking to acquire, but at the moment, there is no visibility on whether we'll end up acquiring in 2 months or 6 months.
And the last question, considering the interest rates fall in the market, are you looking to refinance your debt and if yes, is there a what kind of interest saving you can think you will get?
Okay. So Yeah. So we are looking to, wire. We're looking to refinance a bit. But I mean, the the cost of that would depend on the tenure and the terms that we negotiated, such as the infrastructure.
I would say the last week on the last acquisition that you did at EMI, we funded with a with a 8.15 percent cost of debt, that acquisition at the project However, I would say that, I mean, that's not necessarily the only benchmark cost, but it would range anything between 8.15to8.5percent is what we see in effectively. Okay.
So you're saying below that is not possible at this
Oh, okay. I that's what I would see, as we come to close, you know, different acquisition. Below that, with a reasonable tenure, which fixes our rate for 3 to 5 years, would be difficult at the moment. And that's something that is important for us because, we prefer not to take, floating rate loads.
And you don't have a prepayment option in the existing, debt percentage.
On a certain, certain portfolio assets, we do have treatment options. And therefore, we will look to refund our assets where we have a prepayment option and if it, you know, make in terms of interest benefits, both. Thank you. The next question is from the line of Felicia Puri from Exos Capital. Please go ahead.
Thank you for the opportunity, and congratulations for good setup as well. Just wanted to check, couple of things in terms of conceptual understanding, you know, we are looking at power grid numbers. And, as per their call, their, better days is, for March quarter is closer to 30, 35 days, whereas for us, it is usually 55 days So how would that pool collecting the Canagon work for you in this kind of a scenario? Would they, whatever they collect will be redistributed or how how that distribution happens. Okay.
Good question. I think the the the first answer to that is that as per collection, as per theory, it should be exactly same. However, there is typically a 3 days gap between the money coming in to their account and to our account. So that's one gap 2nd is, typically, when the year end happened, in the last we the lockdown got implemented and some of the payments, could not be paid, but that will be probably half a day, one day worth of revenue. And the project 1000 has also got another businesses which adds to the, the receivable, which is difficult to reconcile for us.
What? Besides that, hours and power grid receivers should match, and we reconcile our books on an annual basis, There's a audit that takes place, both by Chad that has been reconciled with us or not and by our internal auditors entirely in the books. So on the annual basis, it it it gets carried that, you know, if there is a 100, we got 100. But a couple of percent here and there on a month end basis, keep changing because of, you know, payment frequency, bank accounts for etcetera. But besides that, it should be in the same life.
I don't know. Uh-uh, in terms of, you mentioned Cal on its outlook that, you know, but will your results also to match the payments? Look, so Tad, are the power grid books to say that you have an obligation to pay as for the POC in the Canada? Have you paid or not? Have you done reconciliation with the constituents of POC pool and signed up for reconciliation or not?
So that's the that's what, power grid needs to be. That's for the faculty and contractor. Okay. And second conceptual question in terms of, you know, because you have, you've seen 50% collection in to April May. That will be, I'm presuming for the bills which were raised for March April.
In that scenario, you're already at 55 days as of March. If it crosses 60, as you pointed out, it's maybe a timing issue for 20 to 30 this expansion could happen, until you know, liquidity is really pumping and the money flows back to you or or to power grid and then to you. In that scenario, would, as soon as it cost 60 days, would late payments are charged to be accounted for in your, revenue item or P and L item? Okay. So the late payment, etcetera, gets that accounted after 35 days, not 60 days.
So that's just one option. The second is, we become a victim and such as it gets released and collected by power within our behalf. For late payment charge, we do cash accounting instead of accrual accounting because, our grade is the one who is accruing it. Connecting it and get the transfer to it to ensure that, you know, it is done consecutively. We do that.
I still have one, the dates. Okay. And, if I look at your the numbers, I think, for the last two you know, the mid year and the current, you know, closing year, we have 55 days of receivable. In that case, does our our other income contain any component of your payments or time, or it is still not, received and once we're not accounted? No.
So we have received late payments such as during the year, as well as we have a given on some of the parts. So our revenue, the retail connections will include the net late payment such as your collected.
Okay. I just wanted to clarify because, you
know, other income, uh-uh, generally consists of that LPS part or other operating income. As other companies to which I just wanted to clarify that. So it is a part of next bill. Sure. Sure.
So you. Okay. Great. So in the in the detail disclosure in financial statement, we will see the late payments that are separately accounted in provided numbers. Right.
Right. Okay. Thank you so much. And all the best. Thank you.
Thank you. The next question is from the line of Manish Kumar from Solidarity. Please go ahead. Harsh, just one, one data point I just wanted to double check. You know, net debt is 64100 crores, and, so 54100 crores is your gross debt.
Right? Because you have 4 75 crores of cash with you right now. Mhmm. Okay. Okay.
No. So okay. So I just wanted to confirm that. I had 2 conceptual questions. The first one is a very minor point that, you know, when you look at the valuations report of all your projects, the cost of equity differs marginally by project.
So I I couldn't understand, could you explain what the logic of that size? And a relation which again on the evaluation report was, what is the assumption behind the terminal value that is being assumed in the project, you know, when the valuation report is done, And the first discussion question was that under the assumption that you don't acquire any additional project from today, your BTU will gradually decline over time. I just wanted to check this. Okay. Cool.
So thanks. So, to answer your first question, which was with respect to cost of equity, now the value Yep. Your evaluation report gives you a cost of equity as for the VAT formula. And the VAT formula includes the capital model. The CAPA model includes the particular action that is applicable on that project, and that is linked to the overall tariff cover of the project.
And therefore, the different projects are different. The effective tax rate to calculate for capital money is slow through this link. And therefore, you would see a very minor difference between project to project in terms of that itself, not just possible. So I'll say that's one, marginal difference that can cause it. The second question that you asked was with respectively value.
We believe that these are, a permanent, assets with us. And therefore, there are potentially 3 ways the family value gets looked at. One is to see one is to see that the contract is extended beyond 35 years. And if contract is extended beyond 35 years on a cost plus basis, When we calculate the project cost, multiply by 30%, multiply by 15.5% ROE. On a regulated 63 model.
And assume that is extended for another 15 years and will be in preview of that. So that's one method that gets evaluated. Whereas in facilities, when people have filed for petitions for clarification, The CRC commission has told that we would look to, evaluate closer to the expiry date But in principle, we would look for our, you know, cost plus kind of commodity. So that's one way of value. The second date of valuing is to be a scrap value because at the end of the day, there is 3 lakh 50,000 tons of metal, which owned by these companies.
Now now so the Metro guy's equity com quantity is fairly accurate. After that, one needs to assume a particular incursion over 35 years and what will be the price at the end of 36%. Minus the extraction cost, etcetera, services cost. That gives us the 2nd, potential way of valuing the asset. And the third one is, to, let's say, call in replacement cost basis because the asset belongs to us and, over a period of time, the ability and the cost to build a new asset in the same corridor is going to exponentially increase.
So for example, the lines where we have today, if somebody was to build the lines today and the same location is going to cost you know, 50% more in this 5 years because of the inflation of manpower inflation in the metal price, less corridors available, more metal going in the project it. However, that that is potentially an, I would say, an opportunistic way of looking at it, which is an upsize case. But between the three cases, like I said, you know, a very high tariff to a customer's credit to a metro value method, Whichever method one chooses, the impact of that today after, you know, 35 years of discounting, it's fairly small. So we are playing in the range of 3 to 5 percent of, the epidemic base in terms of the overall impact. But that should give you 3 propose three ways that the audit of the value also looks at it.
And, what it effectively does finally is to put that a Gordon's growth model at the end of it to match 1 of the 3 or the most feasible or, proven opportunity. So that's the the card that is used when the entire, what, the value of the card is publicly available, but these are the 3 ones which we believe projects apply. To your last question, if we don't do any more acquisitions besides the one that you already completed. Our DTU will remain positive or 10,000,000,000, 20 rupees for up to 10 years. And after that, it will start to begin.
Okay. Very clear. Thank you. Thank you. Thank you.
The next question is from the line of Sylinda from Telenstar. Please go ahead. This is very much for getting the details this quarter, thanks so much for, to the expectations which are there. My question is first is on the NDCS, which is for this quarter. We, I think on the slide 28, we are saying we have about 257 crores, which is the and that the kind of distribution which has happened is about 175 crores if I'm getting the figure correct.
Does that mean that the difference of about meeting or growth is something which is, surplus to us to, you know, when we started this quarter? Okay. So I would say, you know, the, year on a half yearly basis. And therefore, on the slide number 28, if you look at the the the top table, which is half yearly and this year, so quarter 3, we distributed more than what we earn. Right?
Okay. Quarter 4, we have earned more but we are slightly distributed less. So this this 2030 crores quarter on quarter is something which we stabilized based on the changes that happened quarter on quarter, right, on the end of year front. But, therefore, the right way to look at it would be that on of your business, how much is the, to push in that we have created or on a full year basis. Okay?
So on a full year basis, we have distributed 7 in Red Cross, and the NDCS is 7.20 crores. So on a full year basis, we want 20 crores, on a half year basis, we run slightly more than 20 gross margin. Right? So, it depends on which way you want to, you know, evaluate. But on a quarter on quarter basis, this NDCF tool distribution changes keeps on happening.
Quarter 4 is high NDCF quarter 1 and quarter 3 are low NDC. Quarter 4, which is March quarter September quarter or high collection quarters and therefore higher end this year. Quarter 1 and quarter 3 by that lower. I mean, that's just the trend that we have seen happening in India. So that's why we keep this cushion available to us.
Within the 10% bucket to be able to distribute more or less, as for the quarter selection of NDC. Fair enough. Okay. So my other question on the solar package that we intend to, you know, look at or evaluate them, Sir, I would just make a one month call, which I would like to share with you is hypothetically assuming that, you know, the solar project was acquired, you know, somewhere in the month of April, and we had gone through the situation. It just happened.
Then at that point in time, the sooner project, their revenues wouldn't got affected. So so with that, the 3rd, I will be going forward. I mean, is there any this will not project, hide them revenues being volatile in the month of April. But but I tell you, I mean, again, we don't owe any assets or data. You know, we are as accurate as we we throw it for our own message, but the assets that we track The solar generation numbers have not gone down in April, both generation and collection numbers for the asset that the draft which is with Central counterpart.
It's getting fairly good. So, now I won't say that for internationalist experience in India because there are, you know, different states and different peoples. What? The solar sector policy isn't going down in April. Others, there is a generation numbers that are at peak And the season, I would say, which is the summer season, the monsoon is the peak generation season as well.
So from the plan, the performance perspective, most of the solar projects are okay. So So that way, there is no impact on account of, the the COVID immigration numbers. Now there may be specific state specific issues. That is something which obviously would indeed, right, that different contracts would have it, but there is no general issue. Now coming to the second part of the question about impact on us, So let me do a very small sensitivity.
Right? You know, and I said, you know, we are looking to acquire a small value of the solar projects. Out of our annual NDCF, k, we have 700 crores, which we are distributing. And quarterly 175. Now, as you said, let's say there is a 10% portfolio of solar projects, and that would typically contribute, you know, about 5 to 10% of the industry.
So our 10% of the entry are maybe implemented. Right? On the 4th quarter basis? Now as you saw, our numbers, we already keep pushing up sizable amount. From a transmission revenue itself.
Right? So the ability of a solar project to materially impact that quarterly number is going to be very limited because we are acquiring that in a low size, right, first. The possibility of that impacting our quarterly NDCF is limited. Right, sir? I'll try for the next day.
We are still not that much. We are still not that much in future, but we are just exactly just directing you how we look at that. Sure. Sure. Yeah.
Thanks so much for the clarity, sir, and all you guys for the future. Thank you, sir. Thank you. The next question is from the line of Ramesh Nagar from Axis Bank. Please go ahead.
Thanks, Harish. Actually, my question already answered because of the collection. So I think what are people already asked the same questions? The next question is from the line of Ritesh Pari from Barclays. Please go ahead.
Thanks for your opportunity. Which in the middle was wanted to have understanding of from what kind of IRR we will be looking at when we are acquiring the new projects for whether it's a lot of the the transmission. Okay. So I had to keep changing depending on, you know, the cost of less and then we apply it. Okay.
Having such a desire to give you a broad guidance, we look for anything from 12 to 15% higher, in a transition process. But that's only a guidance that it can be higher also. It can be lower also depending on the size and different parameter, but on an average, we look at 12 to 13% Okay. So that will be payment for the payment? So the projects would come at a premium to that.
So we would look to have higher air, orange telephones. Now just coming to our So one time, but, so, like, I said, I had 7 months of volatility and, some amount of risk, in terms of the litigation we have seen in the past, is it other project factors? So why exactly looking at the scenarios and, you know, very stable or line of, you know, study the study that when you're coming from them or from this transmission line? So what can be the thoughts on that? So I think our talk is simple.
We are your your point is correct. There have been litigations in the past that have been, you know, tariff issues in the past, but most of these issues have been made with state premiums. There are very limited instances of, central sector, undertakings, like, security and NTPC doing that. So from that perspective, that risk is lesser in the so that gets filtered out when we evaluate the particular projects. That's one.
Secondly, from our perspective, we are leveraging our existing skill set and balance sheet to ensure that we can apply projects at a better return. Today, as we see in the market, so there would be a lot of people you may want to monetize the solar port for me. And, considering that, we do have access to capital with our rating and the balance sheet. Immediately generate superior returns versus, let's say, a normal holder of telephonics. And therefore, there is, that nature financial arbitrage for us to leverage on, especially in the same sector as the regulator has seen, the counterparties are, central counterparties.
So that is the reason to evaluate that. So common skill set, again, fixed price contract, limited volatility, and, you avoid the volatility in terms of collection by selecting the right counterparties. So that's how we are coming to that, it's beneficial. Okay. And, last thing about the even in transitional, targeting a healthy pipeline of projects availability, in terms of availability?
Okay. Yeah. I think we are seeing that. It's just, as I said earlier, we don't look at pipeline on a quarter on quarter basis to look at on our 6 months of 12 to 18 months period. So we are seeing the healthy pipeline.
They're already 10,000 which got delayed last year. Last 6 months, and we have seen 215,000 crores projects hitting big out next 6 months. And we'll see those projects coming, you know, in the market to be sold in maybe 3 or 4 months. So I think we do see this pipeline available in the market. And, as in when we, you know, evaluate further, assets, we will see that in the sector, we'll see more people to show the, more and more assets coming to bid an option, build, and send.
K. Thank you. That's it for me. Thank you. Thank you.
The next question is from the line of Prasham Sarbanal from Praveen Surbilal's parent stock brokers. Please go ahead. Yeah. Thanks for the opportunity and congratulations on a good set of numbers. I just had one question.
No. Recently, there was a news item saying that the local electric care makers are, you know, seeking the ban, on the Chinese companies due to security reasons. So, you know, these gears are used in values by the power generation and transmission companies. So if such a bank comes up, what kind of a cost impact, do we have on illiterate, or do we have any or not? Okay.
So I think, we don't do generation or import. I think, you know, the only complement which in our entire portfolio gets imported from China on the transmission line side is, something called insulated. And, the the connectors of insulator would be would be conducted, which is, to be honest, the Python value in the portfolio. Okay. So that's one.
2nd is we already imported those aspects and, they can be changed with the domestic content as well. It's about the activities. So we are not impacted by any of this change, in the country. And the second one, the substation side, we don't have any, Chinese transformer, etcetera. And therefore, we are not impacted at all.
So I think we don't see an impact of the supply chain. Because of import ban from China coming in, there is a huge domestic market of domestic manufacturing for our problems that we are doing. So that's, we don't see the impact of that, Richard, on the on the business. Okay. Great.
Thanks. Thanks a lot. Thanks a lot. And, again, congratulations on a great set of numbers. Thank you.
Thank you. The next question is from the line of Mahesh Shah from ADWise. Please go ahead. Hi. Hi.
I just had one question regarding the length of the solar assets. So when we do acquire solar it's what could be the typical PPAs, like 25, 35 years? Are you targeting something, or is it something that's open to evaluation? So typically, you know, the PPA is assigned in the solar we are seeing is for 25 years. And when we look to acquire with some data for track records, we can look to do, you know, one to clear a track record, then that will make it ready.
So I would say we'll look for assets in the range of 25 years of contact. Got it. And post this contract life, how much is the equipment against it as similar thing to what we have in transmission life in terms of residual value or whether contact center or is that the thing? Okay. No, so I think that solar projects are not big projects.
So, typically, solar projects are are, limited life projects and better evaluate like that. And solar projects, on the other hand, I've also left a life. Right? The self have a lesser life. So we may use the refarming to increase the return, but, sure.
But assuming beyond 25 years, the tariff will make sense. Got it. Okay. And just another question. Given that there's a enough of a pipeline that you said in terms of transmission assets, are you going to continue to acquire those 2?
Because from the calculation that that you you are looking to make about, say, 25% of the portfolio as solar assets, That will mean that 20 5 percent of the new acquisitions will probably be sold out. I said, you know, we we don't have a particular the the 25% is more like a guidance and gap that we will not acquire more than 10 times. Right. Doesn't mean we have to acquire any such So we, we, as I said, are focused on acquiring good assets in a stable cash flow with operating tracker And that's why we are happy even if you have 15%. There's no goal for us to achieve 35%, of solar.
So we're not working on under that that gold spectrum. We'll be focusing on selecting the right assets that supports that. Okay. Got it. And congratulations on a good set of numbers.
Thank you. The next question is from the line of name is Shradesha, an investor. Please go ahead. Yeah. Hi.
Congratulations on a good set of numbers. I have three questions actually. There was a post major event earlier in the year, and the recognition of the same was in process with the authorities. Has the team been completed? Second question is on the slide number 23.
The unsafe condition, have jumped by 15 times and near net incidents have jumped by 6 times. Although the EMOS also increased, but, is there any concern around this? Is my second question? And the third question is, is a falling interest rate scenario right now? And, our debt is mostly at fixed cost.
So is there any provision to, you know, to revisit this or something like that? Thank you. So I'll start on the last question. I think there are some projects which may have a provision to revisit, which is a call option or a put option which is a little bit cost. So I think the cost benefit analysis that we give you.
So there are no 3 options to pre pay anybody at any time. So it's a it's a paid off. We believe in securing your cash flows and therefore, we have been hedging their costs and sort of keeping equipment. So if the rate would have been the other way around, we'll be worried about that otherwise. So so so there will be an opportunity, and we'll keep evaluating that.
The next question that you ask on the unsafe condition in your needs. You know, it's a good side. Typically, when your unsafe conditions reporting goes up and your needs goes up, which means that, you know, people are feeling open to talk about it. So it is a culture and shift that we are pushing in the company. As you can see, number of training gunners are doubled.
What that does is makes more people aware about what is themanship condition, what is the nearest. And as we invest more in the training, there would be unfair condition reporting and numerous reporting increase, and we like that increase because that means people are being cautious. People are watching what was not done rightly. In which bids a strong foundation approach. So therefore, it is a it is a good sign.
Not a bad sign to see if his reporting number is going up. Correct? So that's the second one. And if you have one question, if you can repeat that on So my first question on regarding, there was a course major event in one of the, transmission lines earlier in the year. Is the recognition and everything complete?
And There were 30% which was to be obtained for the maintenance of line or at 99% or something. So is that complete? Yeah. So the state of the back is that we took several people to be able to resolve that line. This is double keeping our line of JTCLs entities.
The respective authority has already approved certificates up to 60 days as a post measure, and we received the certificate, the availability for that. And therefore, revenue has been recognized for that. The next 14 days, we, for the 20% of that line, we did not recognize the revenue. However, we are still appealing at the central level to give 14 days of revenue to us for that component as well. Which will be around the car in a half.
And the amount of CapEx that we spent, we have recover we have a confirmation from insurance company to recover sizable amount of that out about a couple of crops. So so I would say we have concluded the force majeure incident in a very positive note. Hello. Thank you. Anthony's question The next question is from the line of Dheeraj River from Sandwar Panmante.
Please go ahead. Yeah. Hi. Let's have one question on the this basically, we are finding some kind of, kind of it. Basically, it's shown 2993 in one flight.
And, when we go into the last distribution flight, basically, we find what? Where we get the density? Where do we find the FTV? Did it happen different? Maybe, like, 10 crore or something.
So can you just explain that we can see the figures? I'll just give you flight. So you are referring to the initial slide and the NDC ID. Yeah. Yeah.
So, basically, the financial highlights where we are getting the details accordingly. K. Just a mixture. The slide 28, for example. Yep.
It's like a year has got 300 and 6. Is it extending in 70 crores of income? Yes. 6 70 crore. Yeah.
Yeah. I'm referring to q 4. This is h 2. So we got 3 Everything. Correct?
Correct. Correct. Correct. And when I go down in the in the next year, It's coming at 290 or something. That is also coming in your press release also.
Yeah. So when I go to price 35, I get 299 crore. Correct. So how are you originally reconciled? Is there something which is?
Yeah. Yeah. So there is a IDB expenditure that you see on the same chart on slide 28. Okay. 6.6 crores.
Okay? Yeah. So that's the consideration. Yeah. So you need to add that number as well to come to the EBITDA.
So this is an EBITDA. I mean, what you saw on the financials and press releases a consolidated EBITDA on which the EBITDA percentage is calculated. What is getting represented over here, 306 is be a speedy level consolidation. There are expenditure beyond this at the integrated level as well. It's just shown separately.
And and that is the, reconciliation item that I can describe right now. Equity, 6 months, it would be extending majority and another couple of. Okay. So that's fine, sir. Secondly, sir, I would just suggest that if you like, an hour of session an hour, we would realize that probably 15 to 20 minutes before they've gone into discussion on solar assets.
Which this is different. I mean, your, condition is not going to contribute more than 25% of asset. Even in your declaration and your disclosure. Would it make sense for parliament when we That's just most critical thing for any organization. To this so much time to an asset, which is is unless we see that that can become a kind of becoming a multi, multi year revenue generating asset or something.
So I'm just finding if you if you've seen the kind of it, I think the digestion I reckon from transmission is account for 100% of Tesla as of now. To solar, which is not contributing anything as of now except for your recent state. So would should it not make an extra management also to focus and just say that we are not doing It's enabling resolution. It's fine. So I think even it's not going to if you look at the kind of effort, you will be putting it.
At meeting you level, it's not even going to attend the 10% or 20%. I was gonna make it done for No. I think it's a it's a no. No. It's a it's a it's a very important point that from our perspective.
They're answering because people are asking questions. As as we have said also, we're not, necessarily expanding aggressively into solar. Okay? And if it is not worthwhile for a multiyear revenue, why will we also acquire? Right?
It's very simple. Now and therefore, to answer your question, if we acquire, we require which you make it worthwhile for a multi year revenue. Right? Now what does that mean that it will not be a query for 10 days acquisition. Okay?
So, at the moment, we are already responding, because we understand that our investors all the investors would have concern, so we are addressing that. But, I would say, we would certainly not be something which is not worthwhile. Right? And therefore, if we acquire solar assets, which would be adding, a good chunk in BPU, then only we'll look to acquire. Right?
And which will be sustainable, not for one time. So definitely. Yeah. Appreciate that. And the last question in just the end of I'm not an admin, so I don't understand the sector, but we understand that power is going to do, invite, for the existing video that they are willing.
Now just like in a certain construction company which I work with, which are also frustrated. Basically, initially when the sector started, ERC was not allowed to have security with it or some partial certificate of another another HRT consultation company. But 5, 7 years down the line, are the alternative there? So can theoretical question, can I invite investing to say, you immediately wants to invest? They're trying to get effective.
Can we invest into power green, the in light unit in such a chain ID? No. Good question. I didn't see no. I mean, it's a technically speaking, as for city regulations, at the moment, the name which cannot investing out there in this.
K? So that is 1. Up to maximum of 3, about 10% extra. So we can't decide every industry. However, as for our strategy, we would not like to necessarily invest in other English, right, because we are the owner and operators of transportation assets.
We're not, if we have it 10%, we might as well give our investors, and they can buy, you know, your industry needs to buy another English unit. That is not part of a business plan or a model to acquire. The power grid or other state transcripts are monetizing the rashes. You will certainly look to acquire. Sure.
But it it may not make sense for us to invest in other areas. I appreciate. Thanks a lot for your wonderful performance, and you, sir. And do look forward to interacting with you in future. I'll be sure you and me are the best happy to call us back and help you cope with that.
Thank you. Thank you. The next question is from the line of Mohit Kumar from IDFC Securities. Please go ahead. Hello?
So so one question I have. So, last year, there were too many regulatory changes which were in favor of, you know, in rates are there something, you know, which here which here, yeah, which is expected to come or which under discussion, in the next 6 to 12 months? Okay. So from our perspective, we can tell you, I mean, what we know, so and that's that's something we are working on. Is to say, insurance companies and pension companies, pension, companies to be able to invest in debt securities are very good.
Which will, allow us to have longer tenure for loans. So that's one which we are actively working on. The second one is, which I would say you're working on, but we don't know, is is a reduction of lot sizes from, you know, one lakh to one unit. We believe that will be a big boost to the sector. However, last year said we only reduced from 5 lakh to 1 lakh, but we would keep trying, let's say, the administrative producer to 1 unit.
So that's the second one. The third one is with respect to, you know, ability to add sponsors, right, in a particular mix So for a for example, KKR has already applied to become a sponsor, when we did, and, said we we are working with said to come up with know, a policy the idea on how things are going to conduct a new sponsor. So I would say that would be a problem. So practically, we believe we are working on whether the app or not is obviously, regulatory derivative, of different regulations, but we are working on this. Understood.
Thank you. Thank you. Thank you. The next question is from the line of Marius from the investments. Please go ahead.
Thank you very much for giving me an opportunity. Congratulations, Mister Hodge. My question is, you mentioned that, the interest rate on, late payment, has been reduced from 18 to 12. So how much it is going to affect, going forward? And, you have previously explained the 3, residual scenarios.
What is the minimum, residual cost per unit you are expecting, over a period of time, maybe to at the end of the life cycle and, what is the maximum? Thank you. Okay. Thank you. Okay.
So I think, you want to answer your second question first on the residual life. See, at the moment, if I use the worst method, okay, that put me to scrap the leg, alright, that kind of thing. K? Right. Today's terms, Today's value terms, the scrap value of our assets would be about 2000 crores.
Okay? Today's terms. Yeah. Now And that means assuming there is zero inflation, right, for 35 years, Mhmm. In in touch, you will get 2000 So Yeah.
So that's 2000 crores divided by whatever 58.5 crores units. Right? So for you, something like that. Right? 40 rupees.
Now if you if you add 1% inflation, 2% inflation, 3% inflation, 3% inflation, year on year, Okay. So, hopefully, we'll keep going up. Now what is going to be a 45 years of inflation is something which, you know, at least we can't predict. So I think that is gonna be your view. Right?
So how do I look at it? Like, to calculate it. So I will leave that for you to evaluate it, but I will just say it's the size of the truck. In today today's rate, it is coming around 40 rupees per unit. Correct.
Correct. Right. Right. So that's how that's a simple way to look at it. I'm oversimplifying so that, you know, the message is clear, but that's what we need to look at.
Because we we we heard that 7 rupees it is going to be. So that's the reason. Could you clarify that it would be around 40 rupees? See, this is value, but when we value our cash flows, we don't take this value into account in today's terms. Correct.
Hey. So just to be clear, I mean, that's it. We do discounted value of future cash flow, and this value is parked at the end of 30 or assumption, and that gets discounted today. Right? In today's terms.
But Right. When your question was that mostly at the end of 35 year, it give you today's 2000 crores plus the inflation assumption that we want to assume for 35 years. Right? So Yeah. Got it.
And and the second question, it was about the the the penalty because, you have, 55 days of credit. And if you have this kind of the, impact then, from 8 to 12%. What will be the impact to the profit and loss account? Yeah. It is a very little impact, for example, approximate to 68 for the LPS that LPS in the entire financial year last year.
So 12 to 18% if you were to replicate for next year, it will be a single digit coronaed bank. It's a fairly small impact on the book. Okay. Fine. Fair enough.
Thank you. Thank you very much. I really appreciate the the good work you are doing. Thank you. Thank you.
Thank you. The next question is from the line of Global S and Invectra. Please go ahead. Good afternoon, Mr. Shah.
Thank you for your wonderful presentation. And, a great Q and A. This is definitely a great learning experience for people like me, a retail investor. I think most of the questions which I had were answered. I think, simply survey.
This session with my question is related to TDS on the DPS. Recently, the Indian government has given the relief, on periods to be reduced from 10 to 77 hours. Whether is this applicable to the, BPO that, indicated for dispute. Okay. Just a minute, I'll check.
Vivia is also on the call who is, adding finance for the rest of the day. Would you like to answer that? Yeah. Yeah. Yeah.
I can ask you on that one. So, yes, on this, the due, the dividend, the the interest of the changes that she's using to the resident investor. We will give the kind of music back after the concession date. Okay. Thanks a lot.
I'll give you a certificate according to Okay, thanks a lot. Ladies and gentlemen, we take the last question from the line of Swarnam Maishwari from UBS. Please go ahead. Yes, Rasha. Thank you so much.
So just one question. So, you know, if you can just help us with the this makeup of 4 100 and 70 cycle of cash and investments, So how much is pertaining to the investments? And just wanted to better understand that what is the free cash reserve that we have, which can be distributed because I'm sure there would be some part of the car also or sitting over here. K. So out of 475 crores, It is 125 crores, is a which is a better reserve account.
And, 175 crores is the DP. Right, which we are distributing now. So that is, about 300 crore it's so called, let's say, committed capital of some kind. Right? Is that towards, that's now towards distribution that we're doing?
So the residual amount of cash, would be one can assume as a free cash. Okay. Got it. Correct. Right.
Thank you so much, and wish you all the best. Do you have any closing comments over, Hash? Yeah. Yeah. No.
Thank you for me, madam. So we decided to have a longer call because it was an annual 1 and a clear, call. So I think I would just like to thank everyone for the right questions and important questions. We're really happy that Our investors are going deep in our business model and understanding, our business model, the assets and our strategy. So it's very hard thing to see.
I think I would just revisit a vision and therapy as the process to become the most admired new platform coming out of Asia. And therefore, we would focus on acquiring stable assets with operating cash flow long cash flow and ensure that we keep distributing the stable income that year. And work on growing that with the acquisition that we've been doing. Thank you. Ladies and gentlemen, I'm the Applebee device security.
That concludes this conference. Thank you for joining us and you may now disconnect your lines.