Ladies and gentlemen, thank you for patiently holding. We will now hand over to Mr. Jiten Rushi. Over to you, sir.
Thank you, Jiten. Good evening, everyone. On behalf of Axis Capital, I'm pleased to welcome you all for the Q3 nine months FY 2024 earnings conference call of IndiGrid Infrastructure Trust. We have with us the management team, represented by Mr. Harsh Shah, Chief Executive Officer and Executive Director, Mr. Navin Sharma, Chief Financial Officer, Ms. Meghana Pandit, Chief Investment Officer, and Mr. Satish Talmale, Chief Operating Officer. We will begin with the opening remarks from the management, followed by an interactive Q&A session. Thank you, and over to you, sir.
Thank you. Thank you, Jiten, and thank you everyone for joining the call today. As we have followed in the past, we'll go through the presentation, and in the end, we'll keep question answers. To reiterate and start with slide number 3, where we are talking about our vision remains to become the most admired vehicle in Asia. We believe we can do that by ensuring a business model remains focused on long-term contracts, new operating rates, and stable cash flows, focus on value-accretive growth, and offer unitholders predictable distribution while following an optimal capital structure. Following these principles, on slide number 4, this is a quick snapshot of as our portfolio looks today.
We are present across 20 states and 1 UT, across 80 different revenue-generating elements, which includes around 46 lines, 13 substations, and overall, 555 megawatts of solar power projects. On the transmission side, most of our assets remain perpetual assets. However, the residual contractual period for the first tariff is 26.5 years, and the solar is approximately 18 years of average residual contract. On slide number 6, coming to the quarterly highlights. This quarter has been a very exciting quarter. In this quarter, we have won two greenfield ISTS transmission projects with approximately total CapEx outlay of about INR 1,000 crore. Both these projects are won through TBCB mechanism and will be developed on BOOT basis, for which we'll have a concession period of approximately 35 years after COD.
Second, on the BESS front, we signed the agreements for the first utility-scale battery energy storage bid that we had won, and the agreements for that, which is called battery energy storage purchase agreement, have been signed and executed with BSES Rajdhani for a capacity of 20 MW and 40 MWh in New Delhi. We have also signed share purchase agreement with ReNew Solar Power Private Limited, which is to acquire 300 MW of AC capacity of solar project for an enterprise value of approximately INR 1,550 crores. Along with the asset growth, we have also raised INR 670 crores through institutional placement in the last quarter, which was largely subscribed by long-term unitholders, and which totals our last year capital raise, put together approximately INR 1,070 crores of unit capital in last nine months.
The internal restructuring process, which we took approval from unitholders to reduce legal entities and operations, simplify operations for corporate structure and efficient operations. That is underway, which will substantially reduce the at present legal entities which are 38, which we are operating. On the financial side, quarterly FY 2024 revenue and EBITDA has both witnessed 28% and 27% year-on-year growth, on the back of the acquisition that we did in this financial year. Quarter 3 FY 2024 EBITDA includes first full quarter of revenue from grid assets, which provides. which is why we had a jump on the EBITDA performance. On the collection front, Quarter 3 FY 2024, collections for transmission assets were at 94% and solar assets at 111%.
Our quarterly DPU continues at INR 3.55 a unit, which is on track to meet our FY 2024 revised increased DPU guidance of INR 14.10 a unit. Our AUM at approximately INR 26,700 crore, is debt to AUM at 61.6%, which keeps substantial headroom for further growth. On the operating side, our operating performance was at 99.68%, and the solar CUF remained at 18.9%, including all solar projects put together. And you'll be happy to know that we won the IT Project of the Year India Award, Asian Power Awards for our DigiGrid initiative, which was to digitize our entire asset management. With this in line, we were able to achieve superior returns, sustainable increase in DPU, and maintaining stable operations. Going to slide seven, on industry update.
Peak demand at around 213.5 gigawatts for quarter three. Year-on-year, power demand has witnessed increase of 10%, while the quarter-on-quarter consumption has come off, but year-on-year still remains higher. In general, broadly, we have seen substantial amount of trust from government and the sector. The key development and noteworthy development in the sector that we operate in, the transmission sector is looking at almost INR 3,000 billion for the power transmission segment between 2020 and 2025. Based on the upcoming tenders and what is already identified projects, we are expected 2.2, sorry, INR 2,200 billion of expected CapEx in power transmission segment. MoP has also released National Framework of Energy Storage to adopt and create a ecosystem for development of energy storage.
As per NEP 2023, we are expecting the total storage capacity expectation in the country to be 400 gigawatts, to ensure that the country meets its energy transition goals. We are pretty excited that with all the development on transmission and solar business, we would continues to get sizable, profitable pipeline for our subsequent growth. Coming to the next slide, on the operational performance of IndiGrid. This quarter, we had we focused on zero harm on HSE. No fatalities, no LTI, no HSE, one MTC recordable minor. On the performance side, we, as I said earlier, we delivered 99.68% of average availability. On solar generation, was at 18.9% CUF at 229 million units.
Our reliability remained at our targeted level for trips per line of 0.11, and substation trips per element at 0.01, which are substantially lesser than comparable benchmarks. We continued approving defect management and reliability-centered approach, enabling these lower trips. On the cybersecurity front, we have finished our ISO 27001 effort, and we are expecting the certification for IS. In general, there is a consistent track record that we have continued for maintaining a superior availability. I would now invite Navin to take through the financial performance. So, Navin?
Thank you, Harsh, and good evening, everyone. We are on slide number 9. Another good quarter with robust performance as compared to the same quarter previous year. We have recorded a revenue and EBITDA of INR 754 crore and INR 681 crore respectively, which translates into healthy 28% and 27% YoY growth. NDP have generated for the quarter was INR 312 crore, and board has approved distribution of INR 3.55 per unit, which translates into DPU growth of 7.5% on YoY basis. With this, FY 2024 DPU guidance stands at INR 14.1. Coming on to collections for the quarter. It stood at 94% and 111%, respectively, for transmission and solar business. For 9 months, collection performance at an entity level stands at around 100%.
The DSO as of 31 December 2023 stands at 63 and 88 days, respectively, for transmission and solar business, which reflects significant improvement in solar business, where DSO was 107 days a year ago. Coming on to next slide, number 10. DPU for the quarter is INR 3.55 per unit. It will be distributed in form of interest, capital repayment, and other income, which is INR 2.95, 0.56, and 0.04, respectively. The outstanding units at the end of the quarter is 78.37 crores, and the gross distribution to all the unit holders at INR 3.55 comes to INR 278 crore. Record date for the distribution is January 31, and tentative date by which the unit holders will receive their distribution is February 9.
NAV as of December 31, stood at INR 130.1 per unit. For this quarter's distribution, IndiGrid would have distributed INR 82.41 per unit, with a total distribution of around INR 4,667 crores. On the right-hand side, we showcase the trend of distribution year-on-year basis, which is stable and scalable growth of 4% over the years. We are on track to meet the year's guidance on distribution of INR 14.1 per unit. Coming on to next slide, number 11, which showcase the waterfall from our EBITDA to the NDP generation and distribution. At an SPV level, we have a consolidated EBITDA of INR 681 crores. Net of the finance cost, working capital movement, CapEx and taxes at SPV level, NDP generated at SPV comes to around INR 668 crores.
The net of the trust level expenses, interest cost and tax, we have generated NDP of INR 312 crore in the quarter. In this quarter, we have replenished our reserves by INR 34 crore, and closing reserves stands at INR 337 crore, which is an excess of 1 quarter DPU, based current guidance. So that's all from my side. I'll hand over to Meghana to take the subsequent slides. Over to you, Meghana.
Thanks, Navin. Hi, good evening, everyone. I'm on slide 12 on the balance sheet position. IndiGrid continues to be a triple A-rated entity by all the three rating agencies, and our average cost of debt, debt at the end of the quarter stood at 7.6%. The cash balance, which includes, one for the distribution for the third quarter, as well as the trust, stood at about INR 13.82 billion. The mix of debt in terms of fixed rate borrowings stood at about 79 odd percent and balance in the floating part. With the equity raise that we did and the debt that we paid in the quarter of about INR 1,050 crores, the net debt to AUM stood at 61.6 odd percent, leaving a significant headroom for future acquisitions.
The EBITDA to interest, interest coverage ratio stood at about 1.94 times. The pie chart that you see on the right-hand side talks about the gross borrowing of about INR 17,700 crore, which is largely 50/50 split in NCDs and bank loans, 52 on NCDs to be precise, and 48 on bank loans. All have been subscribed by wide variety of-
I nvestors across mutual funds, insurance companies, retail HNI, and even on the bank side, the bank loans have been provided by PSU banks as well as private banks. The repayment or refinancing schedule that you see, the bar graph at the bottom of the chart, talks about how the schedule pans out over the next 10, 12 years. FY 2024, as you can see, with the debt being paid during the quarter, the balance amount for refinancing is very small. And over the next few years also, we have a smoothed curve in terms of refinancing to ensure that there is not more than 10%-12% that comes up for refinancing in any particular financial year. Moving forward, on slide number 13, we are talking about the risk-adjusted total returns to the investors.
As you can see, IndiGrid continues to be outperforming on a risk-adjusted basis, risk being provided through the beta. With the run-up in the equities, we are seeing a lot of equity indices providing slightly higher returns. But as I said, with risk adjustment, you can see that IndiGrid is still outperforming both on the debt side as well as on the equity side. Moving forward on slide 14, in terms of the business outlook. On the portfolio strategy, our focus will continue to be on ensuring that the operations continue to be stable and distributions will also continue to be stable, obviously with looking at value accretive acquisition. The ReNew solar asset SPA that we executed, we are targeting to close this transaction by in the coming quarter.
On the greenfield side, the Project Kallam , which we had won, almost 15, 18 months back, we are looking to achieve COD of that project, in this quarter, as well as looking at focusing on the execution of the augmentation work that we have done across our existing assets, as well as the two new transmission projects that we won, in the last month. Similarly, the battery energy storage system project that we won, we are also looking at executing that. Plus, continue to look at other greenfield bidding opportunities across transmission as well as battery energy storage. And with that, look at ensuring that we meet the DPU guidance of 14.1 for this fiscal year.
Parallelly, balance sheet strength and ensuring that increased costs as well as tenors will remain long enough remains a focus area for us, as well as maintaining adequate liquidity. Asset management, again, a very important part of our portfolio, so we are looking at maintaining 90, minimum 99.5% availability across the portfolio and ensure we maximize the incentives, as well as look at bettering the O&M practices across the portfolio. Increasingly, our focus on the EHS and ESG practices across the portfolio is also gathering steam.
On the industry stewardship is something that we proactively work with various industry bodies and the regulators to see how we can maximize the private sector participation in the electricity sector for both greenfield projects as well as the national monetization pipeline, and parallelly work on increasing the awareness and education about IndiGrid with various stakeholders. Moving on to slide number 15. This depicts the way, on the back of value accretive acquisition, how we have increased the DPU and at the same time elongated the sustainability of that DPU. The various color bar, bars that you see depict every acquisition that we have done over since the time we got listed, and with every acquisition, how we have increased the DPU as well as elongated the sustainability of that increased DPU, going forward.
I'll take a break here and we can move on to the specific Q&A session, please. Thank you. Jiten, over to you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.
Hi, Harsh. Congratulations on a good set of numbers. Just 2, 3 questions. So one is, of course, we are hearing a lot on the solar and renewable side. At the same time, we are closer to the upper limits of what we would like to do in this segment. So, given all of that, do we have some sort of a overall AUM growth target for the coming year, given all these changes and the thrust on solar and renewable that we are seeing in terms of various news items? So that is question number 1. Second is on the solar piece. Again, you have mentioned some of the numbers, like collection percentage, CUF, et cetera.
So, if we were to benchmark ourselves with the peers on the solar assets across various important metrics, if you can give some color on how does our asset look like compared to the peers in terms of some of the important metrics, given that we have now spent some time, you know, developing these assets into our portfolio? And, final question was that, you know, what should be the sensitivity of our NAV to, let's say, every 25 basis point decrease in the interest rates?
Thank you. So I'll try to address in some sequence. So question number one, I mean, first, let me clarify. There is no special crux on any particular sector, whether it's solar or battery storage or transmission. As we have said earlier, we do not work under a target of a particular AUM to be achieved. We believe that we are in a business, on one side, utility, on the other side, capital deployment and investments. So we like transmission, we like solar, we like battery storage equally. And however, the return thresholds may be different for different set of products. So we don't have a particular goal of a solar percentage that we are achieving. We look to acquire assets which provide us superior return on a risk-adjusted basis, whether it's transmission or solar or battery storage.
Depending on what is at offer in the market, we evaluate a particular transaction or bidding. So yes, we don't have a goal of a particular AUM, which I can say. We don't have a particular preference of solar over others. Yes, we have an overall cap. If we are at that cap, we'll not acquire incremental assets. So, that's the answer to the first one. And second one is a little more complex, because while we have 550,000 megawatts, and we acquire ReNew, it becomes larger. They are spread across 16-18 sites. So to compare them... And they are of different vintage. Some plants are 1-year operational, some plants are 12-year operational. So it's not one number that probably we can just compare and share dispassionately with investors or otherwise.
Internally, we do keep track of the nearby plants for each plant and how we are performing against them. But, you know, it's, I would say, impossible to showcase 20 plant performance versus other 20 plants in different regions for us to really compare, because it won't be apples to apples. And we, we are working on it. Let's say, if we come across some simpler, transparent number to communicate that, that would be more appropriate, because it's not an, it's not a homogeneous set of plants, right? It is across country in different types.
So difficult to provide, but to be honest, let's say, this quarter, our performance was a tad bit lower than what we expected from the plants, because this quarter there were a lot of cyclones in western India, which is Rajasthan, and there were some rains in southern India during the monsoon, not monsoon, winter monsoon, so we lost some of the generation. But it wasn't something which is alarming. But I think we do keep track of the plant by plant. But at a portfolio level, if we come across something suitable, we'll surely come. On the next question you had on NAV, unfortunately, there is no one simple answer, and because as the time passes, some of the assets lose value, right? For example, limited life assets like solar may reduce value, so there's dual impact.
Also, cost of capital does not have a direct impact on NAV. There is in between a beta. So the formula is public. You can look at the valuation report, but for us to give a sensitivity table won't be accurate. But all the ingredients are there, right? How the WAC is calculated, how the beta is calculated, is there in the report. I would suggest to build a model and, and maybe bounce off, and that works well. But for us to give sensitivity, how the NAV will move won't be, won't be fair, right? Sorry, I'm not able to help you, but all the data is available for somebody to construct. But that guidance coming from company that got 27 months to impact won't be, won't be appropriate. So that's why kind of we are refraining.
But the data is there for you to create that.
Understood. Just to follow up on the second question, which was related to the benchmarking of the solar assets. So, you know, obviously, we started this only meaningfully, maybe couple of years back itself, right? So when we started, then we would have envisaged a certain delivery in terms of operational and financial performance coming out of this segment. And we would have envisaged as a, at a portfolio level, because in a way, you are a portfolio manager as well, right?
In terms of financial, operational performance. So till now, have you been able to get something which is better than what we thought we would get a couple of years back, or we've, we are at par, or we are getting, you know, at a overall level, something which is lower than what we had expected?
Yeah.
So this, just to get a sense of.
Yeah, I think that answers it. We are getting better than what we had expected, broadly. Right? Including the FRV acquisitions, which we first did in 2019. The plants have performed very well, better than our expectations, both at a unit generation level, degradation level, and also, I would say, collection rate. So across parameters of technical and commercial, they have done very well. I won't say it is only to our credit, because the overall industry has also improved, collections have improved for all. There are many factors, but we are happy with the plants that we acquired and pretty good with the performance.
Understood. Thank you, and all the best.
Thank you. The next question is from the line of Vivek Ramakrishnan from DSP Mutual Fund. Please go ahead.
Hi. Just, going on to the first, question, set of questions on solar assets. You know, especially in context of your triple A rating, your transmission assets are stable, and they provide take or pay as long as you have availability, whereas solar assets have this, issue of revenues depending on radiation patterns, et cetera. So to maintain earning stability, would you restrict solar assets to a certain percentage of total assets or these variable income assets to a certain percentage of total assets? That's my only question. Thanks.
Yes. Yes. We plan to do, plan to restrict approximately 25%, to solar. That's, that's the plan.
Okay, great. Thanks. So, I guess that's, that is in line with maintaining a triple-A rating, right? I mean-
Yes. I mean, it's a linking with rating, commercial security that we all put together, right? I mean, there are variety of purpose, but yes, I think... Yes, rating plus it's not, I mean, we are not working for rating, we are working for stable cash flows.
Right.
So it's a mix of both, right? Rating might indicate that it is stable, but the underlying is that, yes, we do want to maintain a stable business. Having said so, to be honest, over the last three years, solar industry has seen substantial amount of improvement in both predictable generation as well as collections. But let's see how it pans out in the next few years. And eventually, we do believe that overall credit of central counterparties will improve. But for now, we are focusing on not more than 25%.
Fair enough. All the best.
Thank you.
Thank you. The next question is from the line of Saurabh from Avendus. Please go ahead.
Hi, thank you for the opportunity. Just one question. Recently, you have signed an SPA with ReNew Solar Power, which is for the acquisition enterprise value of INR 1,550. So how this funding would be planned, through debt or equity? And also, is there any other pending commitment from the past acquisition which needs to be made?
So, to answer, it will be both. ReNew acquisition has ECB, which can only be refinanced at SPV level, at a fully hedged basis, which can only be refinanced in one year from now for regulatory reasons. So good part of the INR 1,550 will remain same debt and is continuing. And we would be looking to fund it between our internal accruals and additional debt. We already have raised capital, as I mentioned earlier, so between these three sources, we'll be looking to close ReNew. On the past acquisition, if you look at our balance sheet, there is an item of CapEx payable , which is largely around, you know, certain earn-out or certain holdbacks of different acquisitions.
That number comes to give or take around 150 to 200-odd crores across portfolio, based on different deals, and most of the time it is passed back-to-back. So if we receive cash on certain upside terms, we have to pass it on to the sellers. Or in some cases, we have held back the money, which will be paid to the sellers when certain conditions are met, like, completed. So yeah, that number would be in the range of INR 150-INR 200 crores.
Thank you. This, what is the breakup of INR 1,150? How much is debt, and how much you would have to fund it?
Sorry, 1,150?
The ReNew Solar Power, enterprise value is INR 1,550. So how much you need to fund to it?
Yeah. Meghana, would you be able to answer how much is the ECB amount that-
Yeah. Yeah, the ECB is around INR 1,000-odd crores, and balance would be for liquidity consideration.
Okay. Thank you. All the best.
Thank you. A reminder to all the participants, you may press star and one to ask a question. As there are no further questions, I would now like to hand the conference over to management for closing comments. Over to you.
Thank you, and thank you all the unitholders for joining this quarterly call. It's been an exciting quarter, and we are looking forward to the year-end and providing the guidance for the next year DPU. And as the positive moments continue, we'll continue to update you on the projects and further acquisitions that we do. So looking forward for your support. Thank you.
On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us.