Q1 21/22

Aug 14, 2021

Ladies and gentlemen, good day and welcome to GMR Infrastructure Limited Conference Call to discuss Q1 FY 2022 results. 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. Please note that this conference is being recorded. We have with us today Mr. Saurabh Chawla, Executive Director, Finance and Strategy. Before we begin, I would like to state that some of the statements made in today's discussion may be forward looking in nature and may involve risks and uncertainties. Also, recording or transcribing of this call without prior permission of the management is strictly prohibited. I now hand over the conference to Mr. Saurabh Chawla for the opening remarks. Thank you, and over to you, sir. Thank you. Good afternoon, ladies and gentlemen. I welcome you all to the Q1 fiscal 'twenty two earnings call. I hope everyone on the call and their families are safe. As you know, India's economy, which was showing signs of early recovery until early 2021 after the first COVID-nineteen surge, was again hit by a second wave of the pandemic. Most economic activity indicators, which peaked in the month of March, took a hit again during April May. However, after peaking in mid May, the 2nd wave conditions have abated faster than we all anticipated. COVID daily cases are now significantly down from the 2nd wave peak of 4 lakh cases a day to under 40,000 cases a day to day. Given these conditions, our focus continues to be on, firstly, to ensure safety and welfare of our employees. We launched workplace vaccination centers in our offices for accelerated vaccination of all employees and immediate family members. We continue to operate a war room to assist employees and family members with hospitalization, especially at the time of shortage of hospital beds. Secondly, we ensured that adequate liquidity was always maintained in our operations. We completed offerings of non convertible debentures at Delhi Airport and raised about INR 3,257 crores. The proceeds of the NCDs were utilized to refinance the outstanding debt of about USD289 1,000,000 due in fiscal year 'twenty two and to partly finance the Phase 3A expansion. We completed the financial closure of CoA for a CapEx of the new greenfield airport, international airport, amounting to about INR 27,000,000,000 INR 26,000,000,000. We also completed divestment of the Kakinada Special Investment Region about INR10.27 crores is to be received in the next 2 to 3 years, which is contingent upon certain agreed milestones. As part of the agreement, 51% equity stake held in Kakinara SEZ through GMRic Z and Fort Holding Limited is divested to the Ourobindo Realty and Infrastructure Private Limited. Thirdly, we initiated cost saving measures, mainly through consolidation and reopening of terminals as per the demand supply dynamics. Due to second wave, we closed Terminal 2 in May of 2021, which was reopened in October 2020 post the 1st wave of the COVID pandemic. However, as we speak right now, it has again been reopened in July as the traffic has recovered substantially since the trough of month of May. Fourthly, our focus continues to be on the completion of CapEx as per schedule. In Delhi, Hyderabad and Goa airports, 47%, 62% and 35% of overall progress has been achieved, respectively, as on July 31, 2021. Lastly and very importantly, we've been taking proactive steps to expedite activities for completion of the demerger within fiscal year 'twenty two. In this regard, process for obtaining requisite approvals from the relevant stakeholders, especially the financial and operational creditors were initiated. I'm happy to announce the approvals for the demurrage from majority of the financial creditors are is now in place. We just await the judicial process to be concluded by the MCMT to formally record the approvals from the financial creditors and shareholders in our MCMT convened meeting. Coming to the business front, VMR's businesses, which have been impacted by the lockdown measures of the government due to the second surge of COVID, is on a recovery path. I want to talk first on the airport business. The 2nd wave of COVID significantly impacted traffic at our operation airports, bringing the domestic passenger numbers down to 20% of peak COVID level in this May from a level of 70%. However, traffic has now recovered and has reached near post 1st wave heights. To give you some perspective on airport's performance, let me speak on how Delhi Airport is performing. Since reopening in May 2020, Delhi Airport daily average passenger peaked in February of 2021 and domestic and international traffic reached 71% 31% of pre COVID service, respectively. In May 2021, domestic and international traffic passenger of passengers declined to 19% 11%. But as COVID cases subsided, domestic and international traffic has turned around and has reached a level of 67% 21% during the week ended August 8, 2021. Trend was similar for Hyderabad Airport as the domestic and international traffic peaked at 72% 29% of pre COVID level in February 2021 and declined to 18% 10% respectively in May 2021 and now has quickly increased back to 67% 19% during the week ended August 8, 2021. Indian airport traffic is supported mainly by the visiting friends and relatives, which contribute to almost 50% of total domestic passenger traffic, whereas leisure travel has contributed between 20% to 25%. The quick turnaround and surge in traffic is encouraging, considering Government of India imposed curb on the capacity of airlines at 50% from June 2021, which is later revised to 65% from July 5. And as on date, this has now gone up to 72.5%. Cargo business continues to be resilient and was not impacted much by the 2nd wave with the traffic at above 85% of pre COVID level for both Delhi and Hyderabad airports. We expect traffic to gain further momentum with the reducing trend in COVID cases, lifting of government restrictions and airline capacity and the increased pace of vaccination. India's very new COVID cases remain stable and low, while vaccination is picking up pace. About 52 crore vaccine doses have already been administered as on August 11, 2021 in India. Metro cities, which are core to our businesses, have recorded much higher vaccine coverage than the India average. Going forward, speed of vaccination is set to improve due to increased production of COVID-nineteen and COVAXIN vaccines. Additionally, rollout of Sputnik and Johnson and Johnson doses will further strengthen vaccination program. The Government of India is working on vaccinating all citizens by December end of 2021. And when I say vaccinating hospitals, I mean double doses wherever required. Globally too, countries have resorted to fast vaccination measures to unlock economy, which will provide further boost to international traffic. Globally, about 4 50 core vaccine doses have been administered so far. The effect of vaccination in other countries can also be seen from the fact that July 2021 was the busiest month for Britain's C4 report since March 2020 as the passenger numbers surged to about 1,200,000 as travel restrictions were eased. Only this morning, UK has increased flights from India to 34 a week. Air bubbles arrangement will continue for the next few months, aiding the recovery of international travel. Currently, air bubbles arrangements are with 28 nations, including USA, UK, Canada, Germany, France, etcetera. During COVID 2nd wave, most nations had banned entry of Indian travelers. Post moderation of the 2nd wave, various countries including Netherlands, United Arab Emirates, U. S, UK, Qatar, Germany, Lebanon, Maldives, France, Spain and Cambodia have lifted now ban on the Indian travelers. Additional driver for traffic is also expected to be fleet addition by major Indian airlines and entry of new airlines, including Jet Airways, which will aid expansion of the operating capacity. Media sources indicate that 4 entities SMB Aviation, Turbomog Mega Airways, JetFate Logistics and Spice Express and Logistics have applied for NOCs from the Ministry of Civil Aviation to start scheduled air passenger services and air cargo services. Market expansion from entry of new airlines suggests significantly higher potential for traffic growth in India. Based on all these key factors, we anticipate a return to pre COVID level of traffic in our Indian airports by end of fiscal year 2022, driven primarily by the domestic segment. Coming to other sources of revenues for our airport business, CPD. For example, even during the ongoing pandemic, we were successful in monetizing land at the Hyderabad airport. Boston Green, an incubation venture of Incor, signed definitive agreements with GMR Hyderabad to develop co living and service residences. As part of the agreement, GMR Hyderabad Hill City will lease land to Boston Living to develop 500,000 square feet space. During quarter 1 of this fiscal year, we also executed industrial partnership with Groupe ADP, our 49% shareholders in the airport platform, demonstrating our intent to cooperate with each other with a shared global vision for the airport sector. This marks a new significant step to build the world's largest airport alliance to welcome passengers and leverage both groups' expertise to continuously improve operations. This industrial partnership allow us to systematically explore and seize the opportunities to design the future of our industry with the ambition to set the highest standards in terms of performance, operations, hospitality and sustainability. I would like to highlight a notable development in the airport sector. Airports Economic Regulatory Authority of India Bill 2021 was recently passed in the Parliament. The bill amends the definition of major airport allowing tariff determination of group of airports. It would help encourage the development of smaller airports. This approach would help in the development of more airports through the PPP route, thus expanding the air connectivity to relatively remote and far flung areas. We expect the bid opportunities to gain momentum in India due to this bid. On the Energy business, power demand and coal supply are improving as the lockdown is easing up. In our power plant in Kamalanga, it clocked the best operational performance in Q1 fiscal year 2022 with a P and F of 83%. However, in July, the P and F was marginally down at 77%, basically impacted due to the maintenance of Unit 1. In the Varora plant, the PLF of 54% in quarter 1 was impacted by lower supply of linkage coal from mines, lower rates on the exchange and delayed realization from this comps. Our PLF in July 21 improved to 67% due to improvement in the rates on the exchange and greater availability of coal. On Kamalanga, we will receive the favorable order from Aptel. As per the Aptel order passed on August 6, 2021, all the amounts due and payable to Kamalanga that the heart is formed due to various changes in law events shall be paid along with the carrying costs in accordance with law within 6 weeks from 6th August 2021. Kamalanga is entitled to recover expenditure involved in the procurement of alternate coal due to shortfall in domestic coal supply corresponding to schedule generation pertaining to Bihar PPA, thereby restoring Kamalanga to some the same economic position as before as if there was no change in document that had occurred. BTGems, our investment in this Indonesian coal mining company, was able to showcase its strength despite COVID by reporting sales growth of 4% Y on Y and EBITDA margin of USD14.6 per tonne for Q1 fiscal year 'twenty two. This was primarily driven by 16% Y on Y increase in utilization. Per tonne costs reduced by 11% Y on Y to USD 26.5 per tonne in the quarter 1. This quarter has been significant due to the following. It is the best quarter in PTGem's history in terms of PBT. It generated about $129,000,000 highest coal production in a quarter since inception despite adverse weather conditions. Rubgas EBITDA margins of $136,000,000 which is almost $14.6 per tonne. And finally, a final dividend for calendar year 2020 from USD75 1,000,000 was declared in May 2021. Additionally, an interim dividend for calendar year 2021 of USD 75,000,000 was declared in April of this year. The market prices of coal continues to be bullish with increased demand from China, which is reflected by CTGM's profitability for the period. The market prices are expected to be in the current range for the next few months as the spat between China and Australia is not coming to any resolution as we speak. Thermal coal continues and remains to be an important source of fuel for developing countries in Asia and our business will remain well positioned to benefit from this growing demand in the emerging markets. On the highway business, Hyderabad, Vidyvada Expressway traffic increased by 61% year on year to 8,400,000 vehicles during April 31 to June 21. Our per day average volume decreased by 30 6% month on month in the month of May due to the lockdown, but bounced back by 30% month on month in June 21 and 24% in July 21 as the lockdowns were eased. Toll at Ambala Chandigar Expressway has been suspended since October 12 due to the farmer agitation. In this regard, Gmr Ambala Chandigarh Expressway has declared a force majeure event under this concession agreement and has notified NHAI. As per the concession agreement, Gmr Ambala Chandigarh Expressway is entitled to compensation for this force majeure given by way of extension in the concession period, reimbursement of O and M costs, etcetera. Claim for force majeure up to March 21 has been filed by us. On the status of arbitration award on Hyderabad's Ujjwadir project, an independent expert appointed by the sole arbitrator has submitted his report on the quantification of claims. Arguments will be made from September 22 for finalization of the claim amount. As for the management expectation based on external legal opinions and valuation performed by independent experts, the recoverable amounts are in excess of INR 19 hundred crores as at March 31, 2021. On the dedicated Freight Corridor project, the construction work is picking up pace. As you know, GMR, along with its partner, SEW Insha, have been executing an EPC contract to construct the path of the eastern freight corridor that is 181 kilometers of Mogulsaray to New Turkana in UP and 2 36 kilometers of New Turkana to Newbopur UP lines. Around 74% of Attach 201 and around 80% of Package 202 has been completed. I would also like to briefly touch on the best practices and recognitions received by GMR Group on the USG front. On the airports front, Delhi Airport received the platinum recognition in the green airports run by ACI Asia Pacific in over 25,000,000 passenger category. It has been at just the best regional airport in India and Central Asia for the 3rd consecutive year in 2021 by Skytrax. It is bestowed with COVID-nineteen Airport Excellence Award for providing exemplary safety protocols during the global pandemic, making it only the only airport in India to describe this category. Hyderabad Airport received ACI Asia Pacific Green Airports Gold Recognition in 2021 and unveiled the best regional airport in India and Central Asia by Skytrax. It also bagged the Crod rank of the cleanest airport in India and Central Asia category, 4th in the best airport staff in India and Central Asia and 6th line in the best regional airports in Asia category by Skytrax. Hyderabad Airport is also commissioning its 2nd 5 Megawatt solar power plant in July 2021. On the Energy business front, some of the safety performance highlights were Kamalanga's plant's lost time injury frequency rate, which is MTIFR and lost time injury severity rate, which is LTISR, of 0.00 in quarter 1 fiscal year 2022. The same was achieved at the Valora plant for this particular quarter. In BTGem's corporate social and environmental responsibility programs are constantly aligned with the 7 core subjects of ISO 26,000 and support the UN Sustainable Development Goals. BTGMs through its subsidiaries has won several awards certifications in the field of environmental management, which include green rating for proper to Priti Bornio Indovara from Ministry of Environment and Forestry for achievement and performance in the field of management and monitoring of mining environment of subsidiaries for period 2018 to 2020. Blue rating for proper to P. P. K. K. Hsingh N. P. Makumur from the Ministry of Environment and Forestry for the achievement of performance in the field of management and monitoring of mining environment of subsidiaries for the period 2018 to 2020. The presentation which we have sent to you with all the financial numbers are available with you. If not, you can download it from our IR section on our website. We are available to respond to your questions on this call and offline post the call. Now I would like to open the forum where my colleagues from the corporate and the businesses can answer your queries. Thank you so much. Thank you very much. We will now begin the question and answer The first question is from the line of Mohit Kumar from Dhan Capital. Please go ahead. Yes. Good evening, sir, and congratulations on raising money, especially your financial closure at Goa, raising ALCD that Delhi has put. Of course, a very tough and challenging environment for us. And my first question is, sir, on the the rephrasing of Polytech and Dial and Gael invasion into PPT. Sir, can you just let me know the new commissioning deadline for Dial and IAS? Yes. As far as the DIAL is concerned, we have originally planned in April 2022, which has been last year, since we have shifted to June 22. And because of the 2nd, that's 2023, 2nd wave, we expect to be by September 2023 as far as the dial is concerned. Hyderabad is getting closed by December 22. And Goa is August 2022. August 22? Yes. Okay. So, again, given that we are coming very close to the merger, is there a broad understanding between the financial creditors on the way our balance sheet will look like? And when do we when can we expect it to be made public in the sense that we as an analyst community could see it? Well, you're right, Arvind. There is an agreement in place and their understanding is much better. And based on that understanding, we have given their, in principle, approval for the demerger to go through. If you look at on our IR website, there is a kind of a pro form a balance sheets of both the demerged entity and the original entity available there. That's still a pro form a one. And as debt reduces, these numbers will continue to change. Any capital raise that happens, these numbers will subject to change. But there is a general pro form a guidance that is already given there. And lastly, on the corporate days, which are RMB45 1,000,000,000 at the end of June 21, You have received €17,000,000,000 from for Katina, Land Pass. So I'm guessing it's 4th June 21. So is this money has been used to reduce the corporate debt further? Is my understanding right? Yes. Some part of it has been used for reduction of corporate debt and some part has been used for investment in some of our projects, which are under development. For example, the Bajoliholi project, the hydro project required some further investment from the corporate. So it's just a multitude of end use that has been affected on the sale proceeds of Takeda. Understood, sir. Thank you and best of luck. Thank you. Thank you. The next question is from the line of Abhiram Iyar from Deutsche CIB Center. Please go ahead. Hello. Can you hear me? Yes, we can hear you. Yes. First of all, congratulations on the good set of results despite the pandemic. My question is a 3 fold and primarily related to the Delhi airport. One is, can you give a bit more details on the Bhati GT deal? How would it sort of progress from and we had the discussion last time around because I don't think there's been no specific update on moment since the last call? The second is, when would you expect the cash from the Bharti deal to then come in and sort of alleviate the balance sheet because cash has gone down for Delhi International Airport while repayments upcoming and CapEx requirements are obviously still on. Is there any specific funding plan for the Delhi Airport as well? Could you just elaborate on that? So I'll leave the detailing detail answer to be given by GFP level. But just generally, the deal with Bharti is on. There were certain delays because of certain approvals that were yet to be received, which have not been received. And the cash flow from Bharti is expected to begin imminently very, very soon. Yake, if you want to highlight any other aspect of it on the questions? So, Gautam, I think we are expecting RPA deals. And as far as the DIAL funding plan is concerned, the total project cost has already been tied up through debt what we have raised and also internal cash. And we have also had a lease financing. As of now, once the Barthe money also is a part of our expansion cash, once the Barthe money has received a lease financing side up, we may not need right now any further cash or expansion, but we are looking into further details because of the delay of the project by 1 year, 3 to 6 months. There may be an increase in interest during construction. To that extent, we may have to tie it up, but we are just right now we are not looking into that, but we may look at it up after about 6 months. Got it. Good to know. And just one last question. There was a hearing on the AI arbitration with respect to the fees due to the AI which we are obviously contesting on the force majeure. Has there been any update? And when would be the next hearing? The case was heard on 11th August. AI has raised its certain points, but the court has adjourned the case, the division benched to 17th September 21. And the single judge case is posted to 28th September 21. Got it. Thank you very much for the clarification. Thanks. Thank you. The next question is from the line of Atul Dewari from Citigroup. Please go ahead. Yes. Thanks a lot. Sir, just one more question on corporate loans, debt and other liabilities. So after the receipt of this funding from Kachiran Securities sale, how much is the corporate debt as of today? As far as the corporate debt is concerned, as of June, the corporate debt is close to INR45 100 crores, which if you look at the March was about INR46 100 crores. So there is a reduction of corporate debt. And that reduction was just now, Saurabh also mentioned was because we received some money from the Kapina ID, so that money was used to repay our corporate debt. So corporate debt as of June is INR4500 crores. Okay. So after your so this Cartirana money has come in after June, right? And that has reduced the corporate debt further, right? Yes. Okay. So like has there been a substantial reduction like from that INR17 1,000,000,000 that same or any idea about how much of that was used to pay down the corporate debt? So if you see this money was coming over a period of time, so we had received major portion by March itself. So in March, by March, major portion was utilized for debt payments and other activities, which was highlighted. So from March till June, in Q1, we received INR 1.30 crores. The total amount was used to repay our corporate debt. Okay, okay, okay. So after June, there has not been much of a reduction, right, like between June and August, right? I mean, it has broadly been the same year because I thought that a bunch of that money came like in August and July. But that's not right, right? So the number is as of June, not August. August. Okay. And the second very broad question, now that we are very close to the demerger, and if I look to notes to accounts, obviously, the holding company has given corporate guarantees for energy assets as well, some debt and some different shares, etcetera. So what is the total corporate guarantee? And what is the understanding with the creditors on that issue? Will that corporate guarantee be crystallized? Or how do you plan to take care of it? Or will going ahead the new airport entity continue to have that corporate guarantee on the balance sheet? Yes. So in some cases, there will be continuing guarantee, corporate guarantee. It is not going to crystallize because the agreement is already there in place. The underlying assets continue to service those debts, right? And as those debts come off, obviously, we will be working towards reducing those limited corporate guarantees that will continue. So that is the way forward. That has probably been agreed as a path with the lenders. And based on that is where the principal approval is going to place. Okay. But just for example, dual asset wares because of lack of fuel, like for example, Raja Nindi, etcetera, which are about 2,000 rupees of corporate guarantees. So if that corporate guarantee remains on the books of the airport entity, then what happens to that? Because is that asset as servicing debt? And if it will not, then what happens? Yes. Obviously, if we are unable to service the debt, the legal position will remain that the corporate, whichever is holding that guarantee, which is given that guarantee, will be liable to pay. But as I said, other than 1 or 2, which we just mentioned, Gazamonthi 1, which is not an operating asset as of now, that corporate guarantee is operating asset as of now, that corporate guarantee is continuing. But we expect that gas to start to flow. If you look at all the announcements, we have also gone to the courts that the gas should be now allocated to us. As soon as these gas plants start to generating energy, electricity, obviously, they will start to service their debt and there will be a dilution in the corporate guarantee going forward. Okay, got it. Thank you. Thank you. The next question is from the line of Prashanth Sheerdalal from Praveen Ratilal, Share and Stockbrokers. Please go ahead. Yes. The first question is on the annual fee front that we had to pay to Airport Authority of India. So this time around, we have not recorded them in our books of accounts. So if we were to record them in our books of accounts, what would that amount be? Do you have to give that? Yes. The amount that we have not recorded in the last in the current quarter is about INR 201 crore and the previous quarter is about INR 336 crore. Okay. So on an annual basis, would that would this amount be like INR 800 to INR 1,000 crores that we were to pay to AIs? Yes. It depends upon the total turnover of the company. Yes, the last year, the total amount was about INR 750 crores. But this year, the traffic goes up and the business is good. It could be around INR 800 crores. Okay. Okay. And the second question is on the Delhi airport front. So we have a lot of land parcel around the Delhi airport. And as a company, we also plan to utilize that land. So what how much land are we going to sell in this quarter to properly utilize it? So there is no plan to sell any land in Delhi airport during this quarter or this fiscal year. Last year itself or actually last last year, we had already through an auction mechanism monetized development FSI of about 10,000,000 square feet in 2 different phases, 5,000,000 in 1st phase and 5,000,000 in 2nd phase. And in that open auction, Bharti was the best bidder And we have the right at this stage to bring out commercial spaces in Delhi University. But during this year or going forward on an immediate basis, we have no plans to further monetize any of the land parcels in the Indian airport. So, Sourav, there may be one land parcel which is a silver resource which we have taken back in hospitality district. Yes, that's more of adjustment. You're right, please highlight. Yes, there is another 5 acres of the land which was taken back from the silver resource because they did not pay the fees to those process who have taken back that land parcel that is likely to come back to the market in this financial year. And maybe we are looking for another 4 or 5 years of monetization before the transfer. That is what as of today's plan. Okay. And one more question on the demodger plan. So we have admitted the scheme has been filed with MCLT on 5th March. But when is the next hearing date for MCLT? And why don't you announce such dates on your as your corporate announcements on DAP and NAP as a part of good corporate governance? Well, honestly speaking, the date has not been announced by NCLP. So how can I announce it on my on the NSE and Okay? No, but in your presentation, you do mention that you expect to even receive the order by the end of Q3 FY 'twenty two. So I'm sure that presently, we are in Q2 FY 'twenty two. So maybe we are expecting a date to come very soon or are we not? Yes. We are expecting a date to come very soon. And as soon as that date is announced, we will be informing the stock exchanges. There's no to go on about it. So we have to go as per the pleasure of a judicial court. I cannot predict. And please suppose what date we are going to announce. We are pursuing the matter. We have filed a petition with NCMT for an expeditious hearing. We have agreed to hear it on an expeditious basis. Hopefully, I think next week, there will be some movement on by the court to give us an appointed date. As soon as we get it, we will surely let the markets know. Okay, okay. Fair enough. And just one last question on the Kamalanga order that you received on the 6th August. So what is it exactly about? And what is the expected amount that we would receive from that? Ashish, Vasu, sir. Yes. Basically, this order is regarding coal cost pass through. As you would know, coal India had shortage in coal supply. There was a presidential directive long back saying if the shortage in supply is there and the power producers to meet the CPA requirement that buy coal from the market, the incremental coal cost will be passed through. So while in our case, there was this added aspect that we had the share of a captive coal mine, which also got canceled. So while we got an order, the cost of coal incurred to bridge the gap of this captive coal mine supply not coming was not cleared by CERC. The long interpretation of the NAFTA orders, Aptil has laid down the principle, CRC had intercepted the difficulties. The challenge is that and Aptil has upheld our challenge, which means that we would be able to get to reimburse the entire home cost differential, including the carrying cost. This has already been booked in revenues, but the impact would be on the cash flow. In terms of amount, while it will be reconciled, it will be INR 150 crores plus. Okay. So we do expect to receive INR 150 crores from this order. Is my understanding correct? That's very gross, INR150 crores plus. Okay. And just one last follow-up on the Delhi airport on the annual fee portion of the INR200 crores that you said that we have saved by not providing in the books of accounts. And you do mention on your Slide 18 of the investor presentation that we use the cash that's conserved for additional resources for the current operations. So where are where is this INR 200 crores being exactly used? If you can just highlight some points on that. The funds are being used. We have not kept anything separately on these funds. Whatever amount of collections that we have, the entire amount has been utilized for our operations only. So there is no specific head that has been used, but entire cash has been used for our operations. Okay. Thank you and all the best. Thank you. The next question is from the line of Apoorva Badur from Investec. Please go ahead. Hi, thank you for the opportunity. So I wanted to understand a couple of things. Firstly, I believe as part of our deal with ADP, we were supposed to receive RMB10 1,000,000,000 as earn outs on a clean EBITDA milestone. So based on this FY 2022 run rate so far, do we expect to meet this milestone for the year and receive the due amount? Yes. So we are expected to get about INR10.60 crores in totality as cash run out. And this is divided into 3 years. So we will not get the full 1060 close this year if we achieve those milestones. Every year, it will be tested with the EBITDA that is achieved for that respective year. And then that amount will be determined. As on date, we expect a part of that turnout to come based on the current trend lines that we have for this current fiscal year. Okay. And this trend line is existing for the amount which is under litigation for the AAICs. Am I correct? Again, if you can What I meant is in the unfortunate event if we do not get that AI litigation our way. So currently, we're not booking a part of the revenue share. And if you have to reverse that, even then, are we eligible for the allowance? We have to test it at that particular point of time. As on date, yes. As I said, even if we work with just that, we will exceed our run out. But we really cannot give a full guidance because there is always a possibility of a 3rd wave and some impact coming to play. So a little uncertainty over there. In our belief with respect to our litigation on the force measure, we are on a very strong footing. I would urge you to read the Yomda. Yomda very clearly states that it is at the election of the concession entity. It's not dependent upon an agreement that is to be agreed by the government or by the regulator or AI over here. It is a good selection. And from purely from any judicial stance, the defense that is being put up by airport authority great at law. So but yes, we can't decide for any arbitral authority or judicial authority. Rather than when that decision comes, it will be clear at a particular point of time. Right. So I just wanted to highlight that aspect also. That makes sense. And when during the year, is this cash expected to be accrued for all this cash earn out? It's typically, I believe, it will be at the end of the year, that's why you need to? Yes. It will be at the end of the fiscal year. The accounts will be gone up. EBITDA levels that have been agreed will be tested. And then the that earn out, which is a code for that particular idea, will be paid out. And it is also a range. So it's not that it's not digitally 0 and 1. So if it is within that range, and that's where you'll see 70% of within that range, then you get 70% of the cash that is supposed to be true to you. Okay. And currently, you're meeting the 100% requirement? Currently, we are, but let's keep our fingers crossed. And that we are meeting we are currently primarily meeting because of the MAP dispensation. Right. So on the AI fees front, how much is the total amount which is under mitigation? I believe INR 200 crores this quarter and INR 330 crores previous one and I think the product INR 400 crores. Hour? No. It is till June, it is about INR 537 crores. And July August all put together maybe around INR 700 crores. Okay. Fine. On this, so you mentioned that at Hyderabad, we have entered into a reality agreement with Boston Living. Can you share how much should be recurring income on this? It is a license fee concept where the import operator will get our money in upfront. The valuations, I don't have that number, we can retrieve them. Otherwise, on year on year basis, it will be a nominal income. Okay. So it will be an upside payment. Okay. Yes, yes. Fine. Sir, also I wanted to know on this KT gains doing quite well over there. Obviously, the ForeFlight support is very, very strong. We have roughly around $150,000,000 in dividends over the last year and this currently. How do we intend to use that cash and where can we use that cash? Can we bring it to India? I mean, the dividend tax is quite high if I'm not wrong? So the investment in PT Games was also a leverage investment. So we had taken an offshore loan or our subsidiary offshore had taken a loan to put that investment, it was almost $500,000,000 Today that number is down to about $250,000,000 Primarily, all the dividend proceeds that come are going towards servicing the interest and principal payments of that loan. That's the current usage. But we expect given the trend lines that we see and the agreement with our majority partner, there is to maximize dividend flows to both the shareholders. We expect that actually surplus cash to start accruing to us next 2 to 2.5 years. We are also working towards actually refinancing that loan to see if we can term out that liability through an international bond issuance that we are trying to evaluate. Nothing concrete right now, but that is something that given the current momentum in the debt capital markets all over the world, can we do something at that time that is also under evaluation. So if we succeed in that, then there'll be a decent flow of dividend coming back to the corporate. But it's a very valuable asset, PT James, as an investment and we feel quite good. We have been patient for its performance to start flourishing. And as you've seen over the last 12 to 18 months, so we can see very good trend lines. And these trend lines are, honestly speaking, will continue to improve given the demand that we have from China and other emerging markets, developing markets and also the spat between China and Australia, where China is not procuring its contracted supplies from Australia. So given these trend lines, there is buoyancy as well as this business is concerned. Right. So if I'm not wrong, we are looking to monetize this in last quarter. So any progress on that? No progress as of now. We always are open to any suggestions, any offers, but nothing concrete has been always so far. Okay. Got it. So one last question, if I may, and this is on the government's cap on air capacity. So if there were to be no cap, how do you see the recovery emerging? It will be much faster. It will be much faster. There is no cap on capacity and there is no cap on pricing. You see that will allow more aircrafts to fly. ATMs will go up. Dynamic pricing, people will, of course, seek the best price. People who plan well in advance will pay a reasonable amount and people who are last minute travelers would pay a higher amount. So I think while the government has opened up capacity, bringing it up to about, whatever, 72.5%, I think personally, Ajei, that they should remove the cap on the capacity. Okay. Right. Thank you so much. All right. Thank you. The next question is from the line of Shri Charni from Shri Capital. Please go ahead. Yes. Am I clearly audible? Yes. Yes. Yes. Thanks for giving this opportunity. So this question is regarding progress in Owa airport. As per earlier communication, you mentioned that the Owa airport is ready to be scheduled by August 2022. But as per your data presentation, there is only 1% progress each month from late to June and then to July. That is from 33% to 34% and then to 35%. So still 65% is silent. Are we in class to complete it in the next 12 months? Do you want to highlight about the monsoons in Can you repeat? So yes, I hope you know that the intensity of monsoons in Goa is quite big, quite high. Yes, high. Yes. So during this period of time, usually you do not have much progression on the construction activity. But as soon as the monsoon starts to subside, then the construction activity will pick up. Yes. Thanks for this clarification. My second question is we have approximately RMB 1700 of land in Hyderabad and Delhi airport. And if I'm not wrong, we're operating these airports from around 10 to 15 years. You mean to say that this land is vacant for 15 years without utilizing and then the land lease is going to expire by 2,068, means we will take 15 years of time, is my understanding right? No. Your understanding is absolutely wrong. You're absolutely right from the time aspect of it. We have another 50, 55 years to monetize the NAND and earn these rentals from it. But real estate is not a commodity business. Real estate is a business where you have to work hard to make the land mature before you start to monetize. And it takes time to create a mature passage of land. That's why these are very long cycle businesses. Investors who really make big money in real estate are not public market investors because they are very short. They are on the very short end of it. They look at only next few quarters of earnings. But when the asset matures, then it makes great sense for them. Private investors make much more money because they have patient capital to look at 4 to 5 years tenure on any real estate development. So as we speak now, our strategy was more as a landlord in Delhi. We leased out the land and earned lease rentals out of it. Now that land has matured and hence in the next round of monetization, we're seeing much compelling values coming to the airport. So to Hyderabad airport, although Hyderabad airport is still behind the curve as far as creating a mature bank pass over there, but there is slightly ahead. In next 10 years' time, you will see most of these bank passes being fully developed. And that's where the next trend line of your earning of these rentals will be reciting in large quantities. Okay. Thanks for this. And my first question is during GMR and ADP deal, if I'm not correct, in one of our investors' presentation, you mentioned that ADP has an access of getting loans at a rate of 1% and subsequently, they will also get access to cheaper funds. Why are we still raising capital at high interest rates? And I'm sure you also know that NBP is also an airport operating entity, correct? And their airports, especially their main airports in France, have also shut down during the current pandemic. In these circumstances, no management will give out loans when their whole house is burning. So first, they will stabilize their own businesses and then look at expanding or allocating more capital to their other businesses or subsidiaries or joint ventures. So as on date, if you look at last whole year of ADP, they were at a much worse position. They also had to raise substantial amounts of capital in the debt capital markets. I think if my memory corrects me is right, We have raised almost €500,000,000 from international capital markets just to maintain their own liquidity levels and shut down airports, right? But as a management, they give out a loan when when still the need of liquidity? No. But yes, in normal circumstances, that was an agreement, and they stand by that agreement. If tomorrow, the COVID conditions are baked and traffic is rolled out in normal circumstances, our strategic relationship, these agreements that we have with them will be surely met. Okay. Thanks a lot. Thank you. Ladies and gentlemen, please limit your questions The next question is from the line of Mohit Kumar from Dham Capital. Please go ahead. Thanks for the opportunity. So only one clarification. What is the status of Goa tariff order sorry, Hyderabad tariff order? Hello? B. Balaji:] This is the operator. Mr. Bantu, please go ahead. Am I audible? Yes, sir. You are audible. Yes. Okay. So as far as Hyderabad is concerned, the consultation paper has already come out. So the all stakeholders have given their views. So we are expecting by end of this month to be final tariff order of the Hyderabad. Understood. Thank you. Thank you. The next question is from the line of Atul Dewari from Citigroup. Please go ahead. Yes. So thanks a lot again for the opportunity to ask the question. Just again, the second part of the question about the corporate guarantee that I wanted to find out was I did see the pro form a balance sheet on your website. Is this a good idea about the shape of the balance sheet of the airport entity? But any idea about how much what is the size of corporate guarantee that the airport entity will have given to the net from the non airport entity? And out of that corporate guarantee, how much is for the assets which are operational and how much is for the assets which are not operational as of today? I think the right time for that question will be once you have the demerger order after the court has given full consideration to the petition made by all the financial creditors. I've given some insight into that there will be some guarantees that will be continuing like Raja and V1. But majority of them will not continue. And then we have to wait for that period of time for me to give you a much accurate and firm answer on that. Okay. Thank you. Thank you. The next question is from the line of Apurva Mahathur from Investec. Please go ahead. So thank you for the opportunity again. And just continuing with the previous question, I'm sorry if I'm harping on this corporate guarantee thing, but just wanted to know this Raja Bhandari, one guarantee, will this be at the DMR airport level or will it be at DIN level? So again, there will be 2 entities that will be formed in the demerger. 1 will be GIL and other will be GPUIL. You will see it on our website and also in our presentation with the 2 entities that will emerge. Both entities will be given the corporate guarantee for any loan that are residing into GPIL if it is to be given, okay? At a point of time, the guarantee from GIL level, which is the airport entity, that will fall off. And that is where we are continuously working with our vendors so that as the levels of debt comes down, they are able to remove that contingent liability on the airport side of it. But with respect to Raja Moli, which is what I highlighted earlier, currently, it is a plant which is mothball, right? It's not an operating plant. But as soon as it starts to operate and starts to generate its own cash and reaches a good level of operations, automatically, we guarantee, not automatically, but we are in dialogue with the banks from a principal perspective that that guarantee will then get dropped off and the GPY guarantee will continue. So these are very early days to talk about specifics. Let the scheme get notified. I can't predict and give you a wrong trend line. I'm just giving you an insight into it. Right. Sure, sir. Very, very useful. Thanks a lot. Thank you. Ladies and gentlemen, we will take the last question from the line of Rupesh Chopra from Praveen Ratilal, Share and Stockbrokers. Please go ahead. Yes. Thanks for the opportunity again. Just one clarification from correct me if my understanding is wrong, but you said that the as far as the case regarding the annual fee to AI that is pending in Delhi, I quote, is concerned, you said that the 11th August hearing is adjourned and now it is on the 21st September. Is my understanding correct? That's correct. Your understanding is correct. Actually the Delhi High Court in single digit actually have given on 5th January 2021 a stay order from payment of annual fee. On that Airport of Heart of India has gone to the division bench for our fee. That is what the hearing is postponed to be 17 September 2021. Okay. And just one more question again on the annual fee front only. So you said that the amount that is under litigation is roughly close to INR 500 crores. And as far as our payment that if an outgo comes, then it will be close to INR 800 crores, INR 2,000 crores. So is it fair to assume that the remaining part of that INR 800 crores, so that is like INR 250 crores to INR 300 crores that will come in our books of account at a later part of the financial year? See, the annual fee is payable on month on month basis basing on our turnover, that is 45.99%. So what we mentioned was, in the last quarter, the amount not paid was about INR 3.36. The current quarter June quarter is about INR 201 crore. So because of this pay that we are having it, we continue not to pay, so the amount continue to accumulate. So what will be the final amount depends upon when the case will get closed. But estimate is by March, it could be including the last quarter of the last financial year, this can be around INR 1,000 to INR 1,000 crores. So entire amount will be under litigation only, right. So if we were allowed to pay, then we'll have to pay full amount. And if we don't have to pay, then we don't have to pay a single rupee. Now is the understanding correct? That's correct. If the case is disposed off, the thing is now Delhi High Court role is limited to SK order only. But there is a simultaneously, there is a tribunal which has already been constituted because it is a dispute that AI has right. When we said as Saurabh has already explained that under post merger clause, either of the parties to the agreement is entitled, the word is entitled to seek waiver of their obligation in case of post merger. So we have stopped the waiver, but AI has agreed that there is a post merger, but they say we will not agree for a waiver, we will say only deferment. That's where dispute has passed. That dispute has already been roughly a tribunal, tribunal has already been constituted with the 3 member retired Supreme Court judges. We have started hearing already a case where we have already filed our statement of claim and statement of defense already inside the AI. That is what they will decide final case, whether we are entitled for the waiver or we are entitled for the deferral. Okay. So I guess the amount of INR 500 crores is coming from the fact that in the last quarter it was roughly INR 300 crores and this quarter it is INR 200 crores. So under litigation at present it is INR 500 crores, right? Yes. Okay. Thank you. Thank you very much. Thank you. Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to Mr. Saurabh Chawla for closing comments. Thank you. Thank you so much everybody for joining our quarter one call. We are available offline. You have the contact details available with you to reach out to Amit and his team. And any questions that you may have, we can answer them offline. Thank you so much. Be safe. Stay healthy. Thank you. Thank you. Ladies and gentlemen, on behalf of GMR Infrastructure Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.