Good morning, everybody. Thank you for joining us for the Q1 FY 'twenty two post result virtual meeting of Powergrid Corporation of India Limited. On behalf of ICICI Securities, we would like to welcome the Powergrid Senior Management led by Mr. Kees Rekhaal, CMD. Thank you, sir, for sparing your time.
From the management, along with CMD, sir, we've got Mrs. Seema Gupta, Director Operations Mr. V Keshavik, Director of Investor Relations Officer and Personnel Mr. Taj Mukherjee, Director of Finance and CFO and Mr. Amit Chaudhry, Direct Projects.
I would like to hand over the floor to TMD, sir, who will give a detailed presentation, post which we will have a Q and A session. Thank you and over to you, sir.
Thank you. Very good morning. I'll just start with a brief presentation on the Q1 results for FY 'twenty Ruth, is the presentation visible? Yes, sir.
You can
see it. Yes, sir.
Thank you. We'll be covering over the comments, highlight, works in hand. As of 30th June, BarGrid has grown to have 1,000,000 48,457 72 nanometer, 1310,400 4,400,310 MVA, transformation capacity at 259 substations. The inter regional transfer capacity has grown to 90,090 megawatts, roughly 85% of India's inter regional capacity. Team.
Market cap has grown to 1,000,000, which are the 3rd largest CPSC interest cost block. Briefly, in terms of the project execution, this quarter, we have done CapEx So more than INR 1100 crores and capitalization of INR 5,642 crores on a consolidated basis. Some of the key projects which got completed: transmission lines, 1716, circular kilometers Ajmir Faghi, this is a TVCB project completed. Zigmeling Alipurzwar, this is a cross border interconnection with Bhutan of evacuation of Mandeju Hydropower. This has been completed at Vata Aurangabad, long standing line.
This is the first 1200 KV line, which is, of course, charged initially at 400 KV. Sithamani Motihari, Sithamani Durbangar, 2 lines under our power grid Mizilanshale TBCB project, these have been completed. Barheemkorn Veramara, Circuit 3 of 2nd double circuit plan. This is the lead to Bangladesh. And, Kovilur Trishur SVODC, the monoclonal 1 has been completed with this entire VSE system of 2,000 megawatt has been completed.
We added 1 substation, 4 in the Q1 FY 'twenty two post result. Under the Mizuhanchal and various ICTs have been added across the country for about 9,400 MBN. Coming to the operational performance, availability has been 99.77% in this quarter, About the 99.2% threshold. Tripping is flat. We had faced a couple of cyclones in this period, both on the East Post as well as the West Fork and announced unstacked.
There has been significant improvement in our preparedness for these cyclones. And also, we have developed the app In house for the off patrolling. So far, we have been using a third party app. Now the app has been developed in house. It will provide greater inputs and also facilitate data analytics going forward.
Coming to the financial performance, I'm sure you have seen the results and made an analysis completely. Income has grown by about 9% on a consolidated basis to INR10,392 crores, up from INR9817 crores. Our PAT is INR5,998 crores. This includes the profit we have made on Invit, which is shown on the slide next. And the excluding the exceptional item, that is the primarily the Invict in the current year and the rebate which we gave last year.
So if we do exclude these 2 exceptional items On a comparable basis, profits are up to INR 3,341 crores from INR 2,935 crores on a consolidated basis. This is a snapshot of the financials of the Envit as far as Far Grid is concerned. We have sold 74 percent equity holding in 5 SPVs. These SPVs were having 3,000 698 circuit kilometers and 600,630 MVA in 3 substations. Gross block was INR7,239 crores.
Equity The trust was valued INR 9,100 crores for the 74 percent equity. It had a component of fresh issue INR 4,993 crores. This is primarily the debt provided by Power Grid to the STBs. And then for the equity, we transferred 74%. We received INR4107 crores, partly by way of units and partly by way of cash.
15% of the post listed units, that is about INR 13.50 crores. We had INR 65 crores, INR 13.65 crores of units we retained. The rest we offloaded. The 74% stake was about INR8.98 crores, expenses of about INR 40 crores. So we recognized a profit of INR 3,170 crores this quarter.
These are the financials revenue up 9%. We see a telecom dip of 42% in this. This is primarily because of a settlement we made with the BSNL. We had contracts which were not renewed since 2018, 2019. So 2018, 2019, 2019, 2019, 2020 2021.
These 3 years, we had to agree on pricing and enter into a settlement. That resulted in a rebate being offered about INR86 crores. So that is the reason for this dip in the telecom revenue. Other income reduction is mainly on account of surcharge. Operating expenses Commensurate with the revenue growth and reduction in interest because of debt repayment and reduction in the working capital borrowings as well.
The exceptional item is shown. This is primarily this year on account of the profit from the Invit. And last year, it is from the rebate we offer to the customers. Our consolidated results also are on the same lines. There is nothing different here.
Gross block is today on a consolidated basis, INR 2,47,000 INR421. Capital worth to progress INR21,000 crores. INR1,040,000 debt on the books, INR70 101.39 net worth. EPS is INR8.60. This includes the one time in which profit.
And book value per share is €109,000,000 Return on net worth is again inclusive of the profit from share is the Invit. Some of the inputs you, Inves, asked. We tried to put it such as, as you can see, has come down from INR 265 last year to INR255 crores. On the back of payments as well as the reduction in the rate of surcharge, incentive income is more or less flat. Income from subsidiaries INR231 crores.
Dividend, there is nothing significant in terms of Receivables, we have INR 7,619 gross IFRS upgrade slide on receivables, which we will be talking about. The other two segments we said is transmission, telecom income was INR97 crores, as I mentioned INR86 crores. We had to offer rebate to BSNL for the past 3 years to settle the outstandings and the issues with them. Network availability, 99.99 percent. We received the CRC approval for formation of telecom as a separate subsidiary.
We are going to do it in the current quarter. Consultancy income has picked up a bit on the back of our Northeast contract, which we are doing for the government for its net shift projects. The telecom network, I'm very happy to Share that we have added roughly 6,300 kilometers of OPGW from DVC as well as West Bengal. So this adds to our network and provides us greater access in the eastern states of West Bengal and Jharkhand. Commercial performance, last year, we had at the end of June INR 8,243 crores.
We were facing the issue of lockdown and COVID, and therefore, the outstandings were much higher this year. In March, we because of our partner labor model as well as the March collection BNC, Receivables came down to INR 3,583 crores. But end of June 'twenty one. We have again gone up to INR 7,080 crores. We had the 2nd year, therefore, collections were much Lower in the month of April May, June, they have picked up, and July, we expect again to pick up.
We are taking action in terms of notices for resignation, persuance. We hope to see settlement, Particularly from Uttar Pradesh and J&K, where we have large and they are expecting some loans from PSC REC and this is expected to be cleared shortly. Works in hand today, there are about INR 35,000 crores. Normal, our RTM projects are about INR 18,000 and TVCB 16,800. Interstate transmission networks which are coming up, INR 9,300 in the intrastate INR1500 crores, primarily in the state of UP.
There are a few projects in the intrastate. Besides these, I would also like to talk about the recent distributed distribution package reform package, which has been announced by the government, Where an outlay of INR 3 lakh crores INR 3 lakh 3,000 crores is expected. In that, the GBS support is of the order of INR 96,000 or so. So there is an opportunity for the investment of INR 2 lakh crores to come from either the state utilities or the private sector or the CPSUs. This has distribution infrastructure augmentation, roughly $1,000,000 fifty thousand crores and Smart metering about another 1.5 lakhs.
So we are looking at opportunities in this segment. We have Identified a few areas where we can participate along with the DISCOMS or the state utilities in strengthening their infrastructure or augmenting the meters work and take it up with them. So this The quarter we are going to approach several of these state utilities and offer our services to Support them in making the investment also in the consultancy or project implementation, but our focus will be to Support them through our low cost funding options. And finally, Happy to share that this year, we have been ranked 68 among the India's top 100 Best Companies to Work by the Great Place to Work Institute. Last year, our rank was outside of this 100 and very happy to share that this year we have improved by more than 30 positions.
And we are also recognized as one of the best employers among nation builders. So I conclude the presentation here and would be happy to take up your questions. Thank you.
Thank you, sir, for the detailed presentation. We will now begin the Q and A session. Dhivya from ICICI will be coordinating along with us. Thank you, Dhivya, and over to you.
Thank you, Rahul. We take first question from the line of Mohit Kumar from Down Capital. Please go ahead.
Good morning, sir. Am I audible?
Yes, yes. Yes. Please go ahead.
Thank you for the detailed presentation and congratulations on both of our numbers.
So my first question is,
sir, on the P and L, The tax impact of gains booked on yield rate is around 20% of the rupee $32,000,000,000 which isn't booked Roughly SEK8 1,000,000,000. Is that number right?
The tax impact is only on the units which have been sold and we have provided about INR 350 crores on account of tax for this.
RMB 3,500,000,000 is the tax impact, am I right?
No, no.
Yes, RMB 3,500,000,000 Yes.
On account of the
inbuilt, yes.
I said the income from the inbuilt will could get booked as other income. Is that understanding right? And we haven't booked anything in the Q1, but as we go forward in Q4, It will become as a part of under income. Is the understanding right?
So we have booked everything in Q1. We have disclosed it as extraordinary item in the P and L.
No, no, no. I'm trying to I'm asking that, yes, as we go forward, The dividend from Invit, will that get booked as part of the underwritten or the Invit the implied income of the Invit will be Booked as an associate income in our P and L.
No, it will be booked as other income as and when the dividend is received.
Yes.
Understood. So last one, the TV CV bidding has been on the lower side in the last, I think, the past 12 months, Except for some bidding which happened in the March or let's say Jan and Feb, how do you see going forward in the next 12 months and 8 months, all the activity right now?
As I have shown about INR 9,000 crores of Projects are currently under close to bidding. A few schemes have been notified by the government recently. Depending upon the progress in the RE, this will be taken up.
Is there something on the infrastate which will happen or do you believe there is some momentum?
In the infrastate, there is a momentum. There is a scheme for Mohanlal Gang's transmission network of UP. I think UP is the one where we are seeing some movement.
Understood, sir. Thank you.
Thank you. Our next question is from the line of Sita Ramanath from Spark Capital. Please go ahead.
Yes, you are not audible, sir.
Hello, sir. Is it audible now?
Yes.
Okay. On the TBCB pipeline that you mentioned, which is close to 9,300 crores, Can you give the details of the projects, please?
These are mainly for the Adi projects in Rajasthan and Gujarat.
Okay. And on the image sale, the sale of 5 assets, We see that the dentist that out of the entire enterprise value of INR9,000 crores, Close to INR5,000 crores is debt and close to INR4,000 crores is the equity part of it. So what was the book value of this particular equity, the set of Pi assets that you sold?
The equity deployed was about INR400 crores, but the 74% it was INR897 crores.
Thank you.
The next question is from the line of Akhilesh Bhandari from Ipro MF. Akhilesh, please go ahead.
Any particular timeline for further monetization of the TBCB subsidiaries which you have in mind.
We have no Plan to monetize any further in the current financial year. Next financial year, again, as similar, the Asset value is likely to be monetized. Depending the monetization will also take into account The DSA conditions and completion of assets. So in fiscal 20 22, 2023, we can do maybe There are INR 7,000, INR 7,500 crores of monetization. Overall, So we are targeting, say, about 7,500 next fiscal and then 15,000 for the next 2 years each year.
Okay. So,
you mentioned that the collection rate has been improving So any numbers which you can put for June July? What was the collection against the billing?
June July. July, let me just 130%. 130%. That is 100%. July 30%.
Room was close to 92%. Thank you. Okay.
Sir, any update on the Leh Ladakh project? Last quarter, your presentation had a slide on it, but this quarter, there's no slide on it. So Any further updates on that?
No, I thought I'll give the slide when it is allotted to us, because right now, I can only show a 5 moment. The DPR has been submitted and it is in the consideration of the Ministry. And the preliminary thoughts are veering towards giving it to Power Grid under the RTM route. Those discussions are still long.
Got it.
There is no slide, does not mean it is out of consideration. It is still there very much.
Yes. Sir, on the system strengthening scheme, so any further Thoughts on you mentioned a couple of things about helping the DISCOMS on a consultancy basis as well. So would you be looking to operate the smart metering Assets also or that is something which is not under consideration?
It is under consideration. We are Because in smart metering, there is a requirement of big investment. The Government is going to provide 7.5%, 15% depending on the state subsidy for the smart metering infrastructure. And balance is supposed to be through kind of Dotex model where the developer of the utility brings the money. So that is where one option we are looking at it.
So that is really under consideration for investment increasing our investment program.
Good. Thank you, sir. Thanks.
Thank you. Next question is from the line of Sumit Kishore. Please go ahead.
Good morning, sir. Thanks a lot for the opportunity. My first question is the INR50 1,000,000,000 of cash that was received in lieu of the debt, which was associated with the 5 TBCB assets. I mean, that is sitting on your books because I see that debt has not been paid down as I had expected. So what do you intend to do with the cash?
Can you basically also help us give us a sense of The time line for the special dividend that will come from the overall gain on the Invit and the capital freed up. And you had made it clear that you will not keep any extra cash. That is my first question.
Yes, you're right. The funds will be replaced for the current year's CapEx. And definitely, we will make dividend payout. The dividend payout, we will do one final dividend after the AGM. And last year, we did 2 interim dividends, similar plan we have for the current year as well.
Dividend will be paid in 2 phases, 2 parts.
2 interim dividends, last year we did. I expect similar to This year as well, yes.
Okay. Okay. So the second question is interesting that you mentioned and the INR3 1,000,000,000,000 package and the opportunity for Power Grid. But it is very, very important to understand that incremental capital allocation for Power Grid We'll make similar returns that you make in your RTM or the TVCB IRRs that you expect. So could you Put some throw some light, you mentioned you will give loans to states to execute this better.
I want to clearly understand what is the return on in the business model. We would not appreciate any dilution of returns.
Yes. 1, we do not intend to provide loans. We intend to provide investment either as equity or maybe depending on the Structuring, it can be a kind of a leasing model, in which case it will be similar to a loan, you may say so. That is 1. Number 2, we will look for similar returns, but I'm very sure that the RTM returns Which we are getting, whether we will get we can get only on the equity component.
We cannot get on the entire investment into these assets. Because if we say that we will take on a rough estimate, about 40% of the funds, the state utilities will have to on their own. And if we say the entire money will be given as equity at 15.5%, nobody will come to us. They will find Alternate funding much, much cheaper. So we have to give them something which is attractive and which also makes sense to us in terms of the equity
deployed. So in short, you're saying what will be the return on equity? So what is the threshold for deploying capital? Equity capital. Equity
capital, I think anything above 14% should be fine.
Yes, 14% is fine. And finally, my last question is, you mentioned the share of subsidiary profits for the quarter. Just wanted to understand, given 5 significant TBCB subsidiaries are now getting not getting consolidated for 74% stake at least for half the quarter. The extent of decline in the TBCB profit that I was expecting on a quarter on quarter basis was not visible. So I mean, what are we missing here?
Or have the other TBCB subsidiaries, which are operational, contributed a very large portion of profit?
Okay. 1 of the subsidiaries, which was in loss has turned around. We did some financial restructuring there. It has come out to be profitable.
What is the extent of the swing?
About 20, 25, 22, 23 crores.
Of profit versus loss of how much earlier?
No, no, I'm seeing the net impact.
Net debt. Which is the subsidiary, sir?
This is Power and Grid NMM Transmission Limited. Then we commissioned the Singapore Jirad system, which added to the profit methylanchal, it added a little bit. Then Jawarupur Firozawa Transmission System, the first interest rate, it added. Then JP, which was Our Power Grid Himachal Transmission Limited, which was a joint venture, is now a subsidiary, so it added to the consolidated profits. Okay.
Sorry, please continue.
There are additions to the companies as well as turnaround of some of the companies also.
Got it. Just a bookkeeping point, I mean, what is the total annual levelized transmission charge for all the operational TBCV subsidiaries on Power Grids books now, excluding the 5 which have been transferred.
I'll just give you 100. It must be around 1300.
Okay. Thank you so much, sir. Wish you all the best.
Thank you. The next question is from the line of Ajinkya Bhatt. Ajinkya, please go ahead.
Hi, good morning, sir. Thanks for the opportunity. So two questions on P and L part. The sequential increase in interest Spence, is that on account of ForEx, considering that you have roughly, I think, about INR 43,000 of ForEx debt On the books, is that what is leading to the sequential increase?
Sequential increase.
Yes. I'll come back to the March quarter, the interest expense has gone up.
March quarter, interest expense Primarily because of our exchange rate variation.
Yes, yes. Okay. So Farx impact. Second question, the other income on a sequential basis has gone down. Is it predominantly because of the transfer of TVCB subsidiaries to the Innovate?
Because if I remember correctly in 4Q Conference call, you had mentioned that you had collected about 95% of PAT of those TBCB subsidiaries as dividend in FY 2021.
It has nothing to do with the invades. It is because of reduction in surcharge, Primarily because of reduction in surcharge.
Okay. But sir, dividend income in 4Q, What is the dividend income from subsidiary in 4Q versus 3Q quarter?
You're right. Last quarter, Okay. March quarter, we received INR 133 crores more on account of dividend, which is not there, plus INR86 crores reduction in such a big are the 2 major process of production in other income sequentially.
Yes. Understood. Understood. Thank you so much, sir. That's it from my side.
Thank you. We would request participants who have asked their questions and have no further questions So that we can manage the question queue better. Next question is from the line of Puneet Gulati. Please go ahead.
Yes. Thank you so much. My first question is on the new support
that you're likely to give to distribution companies. Would you
need to build any further capabilities that to team or processes for that? Or is the company prepared to
give this sort of support to this launch?
We have been working in the distribution space in constructing the distribution infrastructure. So we have a team and the project execution capabilities in terms of distribution and financials. We also have A team which has been designing and providing consultancy in the smart metering and smart grid systems. We are now restructuring ourselves to organize all this into one single package and provide the services to the distribution entities. So I really other than actual implementation of these systems, the Marvell systems, In any case, we have to buy, integrate and provide them.
We have the capabilities required for the services of the augmentation of network and we said in the new distribution scheme.
There might also be a need for credit assessment here.
Is that also right? The credit assessment has to be done by us in terms of where to put the money because It is very paradoxical. The funds are mostly required by the utilities which are not that healthy financially. Opportunity is there, so we have to choose among them the ones which are better and have some kind of a payment security mechanism
And will your tripartite work there as well in these?
If it is on the balance sheet of Power Grid, perhaps it will work because it talks of outstanding view. So it may work. It is not tested.
Okay, understood. My second The second question is on the balance 26% stake that
you still hold in some of the TV CDs
that you spent into Ingrid. What is the time line for transfer for
January 2024. Sorry, February 2022 January 24, progressively, the 5 assets will be filed off. Okay. Because there are 5 companies with and TSA conditions and the lock in period.
Okay, understood. That's all. Thank you, everyone.
Thank you. Next question is from the line of Apoorva Bahadur from Investec. Apoorva, please go ahead.
Hi, sir. Thank you, sir. Hi.
So I
wanted to understand for the smart rating fees, Do you intend to also provide the back end and the O and M services here or just the capital support?
So we will provide the investment for the entire back end as well as the infrastructure. The day to day operations will be mostly carried out by the utility or sometimes By the service provider, this contractor, because they do the AIM support.
Okay. And sir, the IT needs to be created on the back end of data collection and analytics basically?
Yes.
That will be done by us?
I think we'll be only doing the system design, the actual implementation we have to catch hold of the IT service providers. You may like that, Ma?
Actually, we are working on various models.
And as we said that our main contribution would be designing, then Facilitating those implementation to the contractors.
Okay. Got it. Got it, Ma'am. Sir, secondly, wanted to understand, a lot of tenders have been floated around power storage solutions on utility scale. So do we see some opportunity for power grid over there as well that we can deploy capital?
Definitely. For example, We have tweaked the DPR of the lay system to include a battery component there, a storage component, which will increase the utilization of the transmission line and Also provide more round the clock kind of FR. So that is one of the things which has been incorporated into the DPA. And depending on the progress of the RE addition and progress of this network, The storage system can be taken up few years down the line. And we are also now Putting more focus on the storage solutions, internally, we are creating a team to look at the storage Because going forward, there will be fungibility between transmission and storage, and that is an opportunity Power Grids should be in a position to capitalize.
Sir, just wanted to understand on this LAY DPR front. So for example, what sort of capital cost can we In store, let's say, for 1 megawatt hour.
Capital cost in the first phase, Transmission system for 5 gigawatts will be of the order of INR21000 INR22000 INR22000
INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000
INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22000 INR22 Okay. And this is not having any storage component, Okay. There will be a significant subsidy or a grant component in this Because otherwise, the tariffs will not be viable. So On top of it, there is a plan to develop storage, a big storage, which can Cataract was another 8 gigawatts of installed capacity. It will be hybrid, wind and solar.
So idea is to increase the utilization of this transmission system and provide more continuous or a stable power play over the response.
Makes sense. So just one last question, if I may ask, and please pardon my ignorance, but Why exactly are we forming the telecom subsidiary? What's the requirement for this?
Okay. There is no specific requirement, but then we want to insulate ourselves from another kind of demand, which happened last time. So where our all income was considered as part of the revenue and there were demands and then there was a lot of offhail. We want to avoid that and give it more focus and make it a bigger push because this is an area we see significant opportunity to increase our non transmission revenue. Because going forward, there will be more digital digitization.
There will be need for more network services, and that is what we want to capitalize through. So right now, it is around, say, INR 700, INR 800, maybe this year we will target around INR 900, INR2,000 crores of revenue from telecom, but we want to push it up because that is one possibility which we see
growth. No immediate plans for monetizing this.
No immediate plans to monetize it? Not immediately, no.
Okay, great, sir. Thank you. Thanks a lot. I'll leave it, guys.
Thank you. Next question is from the line of Aniket Mitthul from Motilal Oswal. Aniket, please go ahead. Yes.
So just on this investment in the distribution part or for distribution entities, I think you mentioned that largely this would just involve providing and designing consultancy. So what would be the capital investment that you're looking over the next, let's say, couple of years?
As I mentioned in my initial remarks, the scheme envisages an outlay of INR 3,000 INR 3,000 crores. The GBS, that is the funds to be provided by the government are INR 95,000 or INR 93,000 crores. So roughly, there is a gap of about INR 2 lakhs crores, you can say INR 2 lakhs, 10,000. That is the opportunity set which is available. And we want to go there and put money even if we get, say, 10%, 15%, it is still a big number, 20% to 30% of investment potential that is there.
So that is what we are going to target. And in the next 2, 3 months, our endeavor will be to Meet the potential discounts and engage with them and see what can come out of this.
So largely, we're still engaging with them. But just to understand, you mentioned that apart from the consultancy work, is going
to look
to add in some other services and package that to the Just to get more clarity, what would these other services be apart from consultancy?
No, no, not a consultancy. You see, if We can offer consultancy, but that will be very small and not sustainable. It is 1 kind of revenue. The project is executed, finished. We are looking because see the investment requirement being 2 lakh crore, where will the discounts get this money?
Either they have to get money from the REC, PFC or other financial institutions, their own accruals are not that much. So We are going to provide them the technical solution as well as the investment support so that there is a win win opportunity for them as well as for us as an alternate investment avenue. By doing this, we will be conscious of the kind of returns as one of the earlier personnel has made and also the credit quality of the consumer, what kind of payment security. So these are to be addressed as a package. And we have the therewithal, we have the capability to deliver systems to strengthen the distribution infrastructure to provide them the smart metering solutions.
Okay. My next question is actually on the execution front. And just to understand, I think there's been there's obviously been the issue of the grading in Vasa that's been an overhang. And I think recently CRC has also called up Some of your projects in the Rajasthan scheme that you won recently. Just wanted your color on that.
Do you see any execution risk now for some of the projects That Q1 on TBCB and in terms of timeline, do you see those can possibly be extended now?
What did you say about CRC? That bit, I could not understand.
So I think there was
a hearing in the CRC. They have called out, I think, 3 of your projects which you won in Rajasthan last year. If I'm not mistaken, I think those would be Fategad Bhadla, the Aligarh one And the Zika one as well. So with respect to the Great Indian Bustard being a big issue with that, Satish?
Let me
address this retinium mustard issue. There are about 150 of the GIB endangered specie. There are in the Supreme Court, The issue was about undergrounding of low voltage lines. So in that hearing, the Supreme Court said transmission lines, low voltage transmission lines in the priority and potential barriers have to be underground wherever technically feasible. Low voltage has to be done at high voltage if technically feasible.
Now There is no unanimity on what is a low voltage. There is unanimity that 400 kV and 765 kV are high voltage and extra high voltage. There is no doubt about that. And These voltages levels, you cannot underground the transmission lines. Technically, it is not feasible.
So as far as our projects are concerned, we have about 6 hard lines of the 400 kV and few more in the 765 kV. So as far as our system is concerned, there is no issue with reference with respect to this JIB. 2nd, all our lines and substations are in the potential area, not in the priority area. And if we talk of the priority and potential areas, the size is humongous. It is about 22,000 acres
in the
priority and another 80,000 acres in the potential. So these are huge tracts of land or areas we are talking about. If the issue is more, as I understand, with the solar developers, because for them to bring the power from their plant. To the fooding station, undergrounding could be an issue and there is an impact financially. There are discussions around this and the government is contemplating to take up with the Supreme Court appropriately to resolve this.
And there is also a deliberation that 33 kV or even lower voltage, which will be the threshold for undergrounding.
Okay, Okay. So in terms of our under construction TBC collection, particularly in the adjacent, there is no execution risk in terms of timing this one.
There is no execution risk because even if we read the Supreme Court order, it says that where In case of high voltage lines, it is not technically feasible. There is a committee to which reference has to be made and the committee has to be trial and they will permit your undergrounding. Nowhere in the world a 765 kilobytes line is underground and 400 kilobytes also only for short distances beyond which it is not feasible. So It is not possible for us to build those lines. So we don't see any issue as such.
Another matter is that these lines are to cater to the solar generation, right? So if the solar generators are delayed or if there is any issue there, we also need to defer our investment and match ourselves with that. So all in all, there is activity at the government level to resolve this issue and we hope to come out of this for the entire RE sector and the transmission sector sooner than later for this.
Sure. Maybe one last question, if I may. Last question is on the quarterly numbers. If I have a look, the numbers that you'll see reported for adjusted
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] We reported for adjusted patent as almost a €4,000,000,000 increase on our YY business.
And that is despite a lower surgical income And the TBCU profits going on for us. So I'm just trying to understand, I mean, the growth on a pat line seems extremely high despite the lower late payment surcharge. So am I missing out something over here? Is there something additional that's come in?
There's nothing to miss out. There is a we have received many orders And there is an increase on account of differential interest between finance tariff and provisional tariff. That is about INR230 crores, which is a plus. So that can be a one off question about.
But then these things come
up every quarter. So in the entire cycle of our regulatory business something or other crops. But this quarter, this is the number which is there.
So around INR 2.30 crores of additional income that's
coming from me. Yes, INR 2.30 crores of
income to INR 2.30
Yes, INR 2,000,000 of income from interest on the tariff differential, yes.
And this number, would this be continued in nature? Would some portion of this will continue to gain in the next quarters as well?
No, no. Next Got it. Another set of assets may give similar number, they may not give. But this is not I cannot say that this is a continuous number. Whenever a true up happens, this comes.
Got it. Understood. Yes. Thank you.
Thank you. In interest of time, I would request participants to restrict their questions to Max If you have any further questions, you can get back in queue. And if time permits, we'll take your questions. Next question is from the line of Dhruv Mutschal from HDFC Mutual Fund. Please go ahead.
So my question was related to what Aniket asked. So this INR 250 crores is over and above INR 141 crores that you have disclosed in the notes to accounts, which is the prior period item, is it?
This is interest on account of the interest differential. Yes,
yes. So if you can please, in the PPT, you have started disclosing a lot of If you can even give us this number because this number can be a bit volatile on a quarterly basis. So this will help us Okay.
We'll take it up from next quarter onwards.
Sure. Thank you so much, sir. And sir, one question was on the metering thing. So if I understand correctly, what you're saying is you will be a system You will be building the centers with probably the government calls for smart meters. You will provide the capital for deployment of these smart meters.
And the implementation of this probably you will hire IT consultants, probably the executioners And recover the amount on a monthly basis through the OpEx scheme. Is it? Is that the plan, what you're thinking of?
Yes, broadly, you are right.
Got it. So basically, you would be participating in upcoming smart meter tenders?
No, no, no, no. Yes. Okay. You can say we can participate there. But our idea is to more partner with the DISCOMs and engage with them maybe through a joint venture or through kind of Some other arrangement which is acceptable to them.
Okay. So in that case, they will do all the building all the tendering. And once The meter lock is covered. You will implement the referral process transfer to you. You will implement them.
You will get the IT and everything done and fund for the capital cost And recover your capital through the annuity payments that you get from the DISCOM.
Yes. Broadly, it is that we will invest and get annuity payments. How much will be involved in design? How much, that's all to be discussed and panelist.
Sure, sir. Thank you so much. Thank you.
Thank you. Next question is from the line of Anuj Gopadhyay from HDFC
Okay. Thanks for the opportunity, sir. So a few questions. One is on the key projects which we expect to commission in the current fiscal and the project cost, if you can mention the same.
Yes. The key projects which we complete are the balance one pole of the HVDC rider tubular system in that 1 AC line and 1 pole are pending, 1500 megawatts plus one line. So the poll is almost here. It is ready. Only that line has to be ready.
So the line we are having now in single digit streaming work. Hopefully, we should be able to do in this quarter and commission this whole system. This is number 1. Then few transmission systems in Rajasthan, Badla Pathegad II system, Hetri system, of which in Gujarat. These are major methanolgela transmission, which has only now One more substation to be commissioned, so that is there.
In Jirat, we have a substation, a 765 Jaini substation and a line, 0, Subhash, guram, line. And these are the major ones which we expect besides the various strengthening systems. Overall capitalization in the current financial year, we are targeting something of the region of, say, 15,000 plus.
So we
are looking for some cycles.
Okay. So you mentioned about the 9,300 stores upcoming. Any time line when you have extended INR 9,300 crores of upcoming opportunity in TV CV projects. Any time line?
Yes, yes. Some of them have already been announced. For example, the Gujarat 1 is under bidding And then Rajasthan, once they're all expected, we have to submit the bids
Broadly over next 6 months of this thing should come on.
In the next 6 months, a decision will be made about that.
Got it, sir. And if I just brought my current What kind of opportunity do we expect coming up in the transmission line through the TPA route, sir? Depending upon the current pace, at least the visible products are getting
Let me put it this way, whether TBCB or not TBCB, The opportunity set which is there and which is under serious consideration or which is potential is, 1, the lay transmission system to the Havdalah transmission system where a 27 gigawatt of RE capacity is expected to be added, A 20 gigawatt of RE in Rajasthan, these are the 3 key systems where there will be significant investment in the transmission. This is the opportunity set which will crop up in the next, say, 2, 3 years.
Can you quantify, sir, the product cost or the total opportunity in value terms?
It can be around INR 40,000 crores roughly. But again, this is A matter of debate because if there is more storage, then there will be less transmission. So all these permutation Combinations are evolving. So but if we look at it as a few transmission plays, then maybe plus INR 40,000 crores. Interest rate is a totally different segment.
Interest rate is one where we have another point I would like to share is that There has been a review or there has been a study on the intrastate transmission systems. And one of the recommendations which has been accepted by the government is that the 33 kV system, Yes, which is currently as part of the distribution segment. We made a part of the transmission segment So that it is given more attention and strengthening can be made. And there, the government is looking to power it to support the utilities through joint ventures so that their transmission network is augmented and efficiencies are brought in. So this is another opportunity set which we are working on.
Okay. Any Sarkis that we have got?
DISCOM on this front or
its Pretty nice. This is very, very early stages. The report has been accepted only last month. So communications are going from the ministry to the utilities to follow this practice. So it is too early.
But since you are talking of a time horizon of, say, next 2, 3 years, I thought this is another point which has a potential.
Thank you, sir. And lastly, on the distribution
of our business. I think
we will just
come back in queue.
Okay, fine.
Thanks, sir. Thank you. Next question is from the line of Swarnam Maheshwari from Edelweiss. Swarnam, please go ahead.
Yes. Hi. Thanks for the opportunity. Good morning, Seth. My first question is on NMM Transmission.
Now if you look at it, there were some cost overruns. And in this quarter, you mentioned that there is a financial kind of a turnaround where you have reported INR 25 crores. So what is it? Is it just related to financial restructuring? Because it is not that big a project where a financial restructuring could completely change it.
Or have you received the tariff order on that for the cost orders?
No, the tariff order is not there. We are still engaged with the CRC. The petition is before them. I think it is listed for hearing shortly it will be. So that will give the true benefit of our additional cost.
What we have done is mostly to do with financial restructuring because due to high leverage, it was getting into losses And all that. So that has been addressed. Plus, now both elements are in operation. So the issue of part element not getting tariff is also addressed. But the bigger question which you have raised, The cost overrun, whether it has been compensated?
No, it is not yet. That position is yet to be disposed.
And when do we expect that, sir? Because it's pending for a long time here.
This financial year.
Okay. Fair enough. Sir, my second question is on the TBCB projects that we intend to monetize in FY In FY 2023, 2024, 2025. Now what is the mode of the monetization? Is it going to be A normal transfer from PGCEL to PGC Ingrid because I really doubt if that is feasible, you'll be being A CPSC company.
So will there be some sort of a bidding? Or how is it going to be some color on that?
That is to be yet decided. And then there is another chance now that the asset transfer, I think, May not happen. That is the like for example, in the first set, we have transferred the entire holding there for the life. But here, maybe for a part of the period, we may transfer only the revenue. So these are all things which have had to be evolved based on the there is a national monetization pipeline, which is expected to come out.
That will provide some guidance. And that's why I said in the current fiscal, we don't expect to do anymore. It will be the next fiscal, so we have enough time to address all these questions.
Okay, sir. Got it. Thank you so much. And on the basis, okay.
Thank you.
So we've got 2 more questions in there. A couple of questions on chat, if you allow us 10 more minutes, is it okay?
Yes, please go ahead.
Okay. So, sir, the next question is from Bharni from Spark Capital. Bharni, you can go ahead, please.
Right. Thank you. So I
have just one question. So the 5 TBCB assets transferred to the Inlet, can you give us or give me the final construction cost of these projects?
Around INR 7,300 crores was the gross loss.
Okay. So why I'm asking this is, if I calculate the equity which you mentioned earlier as INR1200 crores inputted in these assets. Over RMB 7,300 comes at 16% of the overall cost. So is that right?
Yes, that is fine.
Okay. Just wanted to clarify because we usually infuse around 30%, So just wanted to check that.
These are our TBCB assets.
Correct. Just wanted to check that. Thank you so much.
Thank you, Barni. The next question is from Sudip Mitra from JM Financial.
Yes. Thank you for the opportunity. So my question is with regard to
the Elazar project, as
you mentioned that it's As you mentioned that you are looking at the possibility of that nomination and coming on a nomination Sorry, yes, voice is not clear. Am I audible now? Yes. Yes.
So on the latest,
You mentioned that there is a chance that it might come on nomination basis to BDC ahead. Yes, go ahead.
Yes. So what is the expected cost of this project? If it comes to BG Cell, how much addition do you see to your work in hand?
The project is expected in the first 5 gigawatts transmission system, roughly INR21,000 crores. And there will be a component of strength in it. So until it is A lot to us, it will be difficult to put a number. Okay, understood. Thank you.
The next question is from Girish Achifalia from Morgan Stanley. Girish, you can go ahead please.
Sir, while things are on drawn doors, just wanted to understand being that this marketing Project that you would probably enter into some kind of contracts with the scales.
The total capital employed deployed, it will be high.
And secondly, in terms of tariff recognition, would it be fair to assume that this would be Recovered over a 10 year period on your participation in these kind of projects?
Yes. The assets, they can have a life of around, say, 7 to 10 years. That will be more appropriate. If you reduce it too much, the per month tariffs will go up. So we can expect 7 to 10 year kind of a time horizon for this investment to recover the costs.
And what kind of capital employed can you I mean, any ballpark number here that you can think of your balance sheet that you are willing to invest both as equity and debt?
See, there is no constraint as far as we are concerned. It is the opportunity set which is the constraint. How many DISCOMs We are reasonably good paymasters, are willing to accept our offer and get into it. So From our side, there is no constraint in terms of how much we can allocate, but it is from the recipient side, I see the difficulty.
Sir, thank you so much. So we've got a couple of questions on the chat, so I'll just ask them. So the first question asked is that can you give us CapEx and capitalization guidance for FY 2022 and FY2023, please?
FY 2022, we our CapEx is INR7500 crores. We expect to cross that. The capitalization, as I mentioned, will be around INR 15,000 crores. INR 23,000,000 we can take 23 CapEx will be around similar number, dollars 7,500 to $10,000 we are yet to finalize it. Capitalization will also be around, say INR 12000 to INR 15000 crores.
Sure, sir. Sir, the second question is the level of competitive intensity in the TBCB bids as we've seen many new entrants coming in. So can you elaborate something on the market share you are targeting?
No, no, there is nothing to tell. Every project we target to win, it depends on the competition and How far we are willing to pitch? Competitive intensity is more or less same. I don't see it has increased in any significant But there have not been many bids in the recent past, so it is difficult to say. The next set of bids will determine how the market is moving.
Sure, sir. Sir, any upcoming cross border projects that you you're looking at?
One project which is there in discussions is, It is not exactly a cross border. It is the Pattihar to Bornagar via Bangladesh. So this is one project which has been given to us. It has about INR3500 crores kind of investment and it is to be taken up. Other is the link with Nepal, new Butwell for F4.
So that is another line that is going to come up. These are the 2 transmission lines Which are there, where there is more visibility.
Sir, are these a part of the INR 35,000 crores of work in hand?
Fatihap Parvuthi Nagar is a part of it, but not the other one.
So one of the questions is, can Africa or global projects revised CapEx for PGCL's international business?
We are looking at with Africa 50, an opportunity for investment in Kenya.
Okay, any size that
The total investment of that project will be about $150,000,000 to $200,000,000 So of that, how much will be the debt and equity and all those are yet to be decided. But These are 2 transmission lines and some substations in Kenya.
Sir, one of the question is that what is your dividend outlook given that you elaborated asset monetization schedule. So any thoughts on that?
Yes, dividend will be better than last year and it will be flow in the there were 2 interim dividends last year. So we would definitely maintain that kind of a cash flow. And final dividend, which anyway we will pay after this
Right, sir. So the last question I would like to take from the chart is what is Power Grids' addressable share for distribution CapEx of INR 3 lakh crores and any update on the Lesh Srinagar project?
To answer both the questions, Rahul.
Yes. I think We are through with all the questions. Mohit, do you have any last question? Your hand is still up. Then we can take your questions.
Mohit Kumar from DM Capital. I think, sir, he's not responding. So
I think we lost Rahul's audio, sir. I'll take over. Thank you so much for your time and detailed presentation and patiently answering all the questions. We would like to thank all the participants as well for attending the call today. Sir, any last comments that you would like to give?
No, nothing. Thank you so much. We look forward to your support. Thank you.
Thank you so much.
Thank you, sir. We will
now disconnect the call. Thank you.
Thank you.