Ladies and gentlemen, good day and welcome to the IndiGrid Infrastructure Trust Q1 FY 2022 Earnings Conference call, hosted by Edelweiss Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Swarnim Maheshwari from Edelweiss Securities Limited. Thank you, and over to you, sir. Thank you, Mallika, and good evening to everyone. I welcome you all on behalf of Edelweiss. From the IndiGrid management, we have with us today Mr. Harsh Shah, CEO, Mr. Jyoti Agarwal, CFO, Ms. Meghana Pandit, Chief Investment Officer, and Mr. Satish Talmale, who is the COO. I will hand over the call to Mr. Harsh for the opening remarks, post which we can open the Q&A session. Over to you, Harsh. Thank you. Thank you, Swarnim, welcome, everyone, on the quarter one financial year 2022 call of IndiGrid Infrastructure Trust. We will go through and refer to the presentation that we have uploaded in the exchanges. To start with, quickly on slide number three, this is our vision to become the most admired yield vehicle in Asia, and focused on focused business model, value accretive growth, predictable distribution, and following an optimal Cap structure. On slide number five is just a snapshot of what IndiGrid is today. IndiGrid today is India's first power transmission yield platform, with approximately INR 21,000 crore of AUM across 18 states and 1 UT in India. We own 4,040 lines, 11 substations, and two Sterlite Power plants, approximately 100 MW. In terms of another measure, we are about 11,550 towers. Overall metal, if one was to count, it comes to about 4,35,000 metric tons of steel and aluminum. On the right-hand side is just a depiction of our portfolio. As you can see, we are majorly present in central, northern, and eastern India. Coming to quarter one for our performance highlights for us, I think first is to start with financials. We had robust financial growth with our revenue and EBITDA growing by about 53%, largely on account of acquisitions that we have done during the financial year, rather during the last 12 months, since last year, quarter one. DPU has increased materially between quarter one of FY 2021 and quarter one of FY 2022. In two steps of increases, one that we did during the middle of the year last year, and one in quarter four. That has resulted into the first quarter distribution for 2022 at INR 3.19 a unit, which is about 6% higher year-on-year basis, which puts us at about INR 12.75 of annual DPU forecast. We remain well-capitalized on our balance sheet. Our net debt to AUM is just about 58%. Our ratings are affirmed by three important rating agencies in the country. We raised in quarter one, two important part of our cap structure. One is a rights issue, which we spoke about in the earlier call, which was a successful issue, and I would like to thank all our investors who participate in that. The second one was a public bond that we did, which also resulted into a tremendous success, and that really opened up long-term source of capital for IndiGrid on debt side. We acquired our first solar projects, called FRV in the quarter, at about INR 660 crores of PV, about 100 MW of plant. We continue to focus on asset management to ensure that we are mitigating any risk that emanates out of operations and continue to maintain a reliable portfolio. Our availability was at 99.7% for the quarter one. The important point for the quarter is that IndiGrid has now transitioned into in-house project management and asset management. This is an important point because historically, Solar Power operated as a project manager for IndiGrid and provided support in terms of operations. However, as we have discussed in several calls over the last two years, IndiGrid has built capabilities enough to continue to be project manager or operations and maintenance on its own. With that in mind, we have transitioned into internalizing these operations. On the policy front, there are many important outcomes that got achieved in Q1 of this year. First one being that SEBI has now approved the reduction of trading lot, which IndiGrid trades right now at 1,701 to one unit for all publicly listed units. We believe once this circular is notified, we will be speaking to exchanges and making our trading lot to one. We are confident that this is going to result in substantial amount of liquidity and access, both for IndiGrid as well as for investors who want to invest in IndiGrid. IRDAI, during the quarter, have enabled insurance company to invest in debt security of IndiGrid, and that's something which we have seen very well in our public NCD issue. PFRDA has done two important announcement where they've enabled NPS-backed pension funds to invest in debt securities of IndiGrid, just like insurance companies. In addition to that, they've also relaxed the sponsor rating requirement which was there for investment by NPS-backed pension funds into IndiGrid units, and this restriction is only kept for the IndiGrid itself, IndiGrid is well within those restrictions, as IndiGrid is strong credit rating. We believe that a lot of NPS-backed pension funds would look into IndiGrid as a favorable investment avenue. Going to the next slide, which is seven, quickly to capture the impact on COVID. We all saw wave two in quarter one of this year, just like the wave one in quarter one of last year. I think this quarter was far better in terms of collection. This quarter was about 69% collection versus 56% that happened in the last round a year earlier basis. This is largely to the fact that quarter four FY 2022 was 126% collection. That's something which is impact was rolled over into quarter one. On an average basis, we are doing fairly okay with DSO days just at about 60 days. Impact on demand is an important criteria, while power transmission tariffs are not linked to demand and are only linked to availability. We are clearly seeing power demand sharply the moment the lockdowns are opened again. On our quarter two itself, we have seen a substantial growth between of 16.6% versus last year. As you would have seen a lot of posts coming from the government themselves, India's peak demand has crossed 200 gigawatts in July and consistently making new highs. We are confident that the power consumption demand, which is the underlying factor in the sector, also remains pretty robust. Going to the next slide on operating performance. As you can see on the left-hand side, our assets are performing as they were expected, all of them resulting into maximizing our incentives. The assets which are not at the maximization of incentives, like NER, which is the asset that we acquired recently, is just going through the teething issue after the acquisition for the first few months. However, all these incentive loss is being indemnified by the sellers and being paid as well. For commercial and practical purposes, IndiGrid portfolio remains at 99.7% itself. In terms of some of the parameters, we have reduced number of trips per line, improved on unsafe conditions, improved on solar generation. All those factors which are important for the portfolio reliability, we are focusing on them to increase reliability and sustainability. On the digital asset management that we have been consistently speaking about, which is a partnership with IBM Maximo to launch and transform the way asset management operated for transmission sector in the country. We have gone live on two of our large assets, which puts about 20% of our portfolio is already live working on digital asset management. We are hoping that by the year-end, we would be converting the entire portfolio into DigiGrid, which would be one of its kind. On HSE, we have focused on 100% safe man-hours for the quarter one. In terms of COVID, we continue to be careful in terms of COVID appropriate behaviors and focusing on health and safety of our key stakeholders. I would now invite Jyoti, Chief Financial Officer, to take from slide 10 in terms of financial results and other details. Jyoti? Thanks, Harsh. I'm on slide 10, where we have put up the financial performance for the quarter. As Harsh has already explained, our revenues and EBITDA grew handsomely at 53%, backed by four of acquisitions that we did over the span of the last 12 months. Our NDCF was lower, about INR 50 crores, INR 52 crores to be exact. This was largely because we did a lower factoring of only about INR 50 crores this particular quarter, compared to a factoring amount of INR 140 crores in the corresponding quarter of the last year. Against a INR 90 crore lower factoring, the NDCF was lower by only about INR 50 crores. This is largely because we had a better collection this quarter of 69%, versus 56% collection in the corresponding quarter of the last year. DPU, as Harsh mentioned, the board has declared a DPU of INR 3.1875 or INR 3.19, which is in line with the increased guidance of INR 12.75 per year, which was up last quarter. This DPU comprises of primarily of interest, almost INR 3.04 out of the INR 3.19 comprises of interest, and about INR 0.15 of the DPU comprises of tax-free dividend, which is largely the dividend that we have got from PKTCL. This DPU of INR 3.19 on an expanded unit base of nearly 70 crore units post the rights issue translates into a gross distribution amount of INR 223 crores this quarter, which combined with the distributions that we have done since listing, will add up to nearly INR 2,300 crore of distribution, of nearly INR 49 of distribution per unit that we have done since we got listed. The NAV for Q1 FY 2022, or at the end of Q1 FY 2022 I should say, was INR 129 per unit. This was sequentially lower as we had guided in the Q4 of last year because of two primary reasons. One was an expanded capital base. We increased the number of units post rights from INR 58 crores to almost INR 70 crores, and that led to a dilution of the NAV. Also, we acquired the balance 26% equity of NER and we had to pay close to INR 500 crores because of that. That impacted the NAV for the rest. We are well on our way to deliver on the increased DPU guidance of 12.75 for FY 2022. I'll go to the next slide, which essentially provides a bridge from the EBITDA to the distribution amount. We did an EBITDA this particular quarter of a little higher than INR 500 crores. Nearly 50% or about INR 240 crore of this was taken away by finance costs, both at the SPV level as well as at the IGT level, primarily at the IGT level, of about INR 214 crore and about INR 27 crore at the SPV level. There was also a negative working capital movement. This was largely seasonal in nature, as we've seen first quarter is generally the weakest when it comes to collections. Against a 126% collection in Q4, this quarter was less than 70%. That led to a reduction in the working capital, related NDCF by almost INR 117 crore. There were some other minor items like CapEx and tax as well as debt repayments. We were also helped in this quarter by a release of about INR 49 crore of DSRA, this is the debt service reserve account. This is largely on account of some NCDs which got repaid for which we did not have set the DSRA. That got added to the NDCF. At the end of Q4, we had our total NDCF reserve of almost INR 170 crore. We dipped into that reserve to the extent of about INR 55 crore in this quarter to reach to the distribution amount of INR 223 crore. Even after this dipping into the reserve, we still have a balance reserve of INR 115 crore for the future, which is higher than the reserve that was there prior to Q4. I'll go to the next slide 12, which talks about the debt structure of IndiGrid. We raised an incremental debt of about INR 3,400 crore in this quarter, largely for refinancing and funding of acquisition. This debt was nearly 10 years in tenor and came at an average incremental borrowing cost of 7.57%. With an average cost of debt of about 7.94%, our marginal cost is significantly inside of the average cost, which should help reduce the overall average cost of debt as we go into the remainder of the year. We continue to remain AAA rated. We're carrying a good cash balance comprising of DSRAs, DPU as well as NDCF reserve. Our net debt to AUM is much inside of the 70% regulatory cap for IndiGrid. We have substantial part of our debt which is fixed rate. More than 70% of our debt is fixed rate debt. We've also been able to diversify our pool of investors. We're roughly 50/50 between NCDs and bank loans, a little bit higher on the NCD side. What is more important is that we've been able to diversify the nature of investors in both the NCD space as well as the bank loan space. We now have both public sector as well as private sector banks, as well as some NBFCs who have given us loans. On the NCD side, other than mutual funds and corporates and HNI, who are already a part of our debt book, this particular quarter we saw two new investor classes getting added up. One was the retail investor base, and post our public issue of NCDs. The second was insurance. We now have almost INR 400 crores of our total debt book held by insurance companies, both life and non-life. We've seen an increasing trend month-on-month of this investor base. Now with pension funds also being allowed by PFRDA, we feel that we have enough headroom to be able to further expand our investor base across this new class of investors. If you look at the bottom of the slide, we've also been able to smoothen our repayment profile over the years, something that we had guided the investors over the last few quarters. Other than FY 2023, now we have the amount of debt repayment in any year within our comfort zone of less than INR 1,500 crores. For FY 2023 also, we are taking proactive steps to ensure that we get an advance debt tied up significantly ahead of the repayment time. At the same time, we are also exploring whether there is any merit in prepaying some of this debt, which is coming in FY 2022, FY 2023, provided the cost benefit trade-off is optimal for us. For the next slide, I would like to invite Meghana to take us through the next slide, please. Sure. Thanks, Jyoti. I'm on slide 13, where we have compared ourselves on one hand with a pure-play debt product, which is the 10-year G-Sec bond. On the other hand, we have also looked at how pure-play equity and certain indices have performed. In the graph, it's a combination of total return, which is the distribution per unit, plus the change in the market price. As you can see, both on an absolute basis and on an annualized basis, IndiGrid has outperformed, not just on the debt side, but also on pure-play equity indices like Nifty 500, BSE Power, BSE Utilities. More importantly, along with this total return, what is important is on the volatility side, how has IndiGrid performed, which is reflected by the beta. On beta also, IndiGrid is amongst the lowest with 0.07, and this we have tracked since the time of listing till end of Q1, that is June 30th. On a risk-adjusted basis, IndiGrid continues to outperform the equity indices as well as on the debt side. Combined on the back of the acquisitions that we have done and the sustainable DPU that we have delivered. Moving on, I will request Harsh to give a perspective about FY 2022, the outlook that we are looking at. Thanks, Meghana. Yeah. Starting on the next slide, which talks about the outlook for 2022. We remain very positive about the power sector in general. There are a lot of new initiatives that are taken by government and regulatory agencies to come up with new technologies and several storage and several other pathbreaking initiatives on the overall grid side. What that eventually will result into for us, we are expecting a sizable pipeline of interstate projects, about INR 50,000 crores and INR 45,000 crores in the intrastate bids over the next three to four years, which would result into a healthy acquisition pipeline for IndiGrid eventually. This year itself, we are expecting about INR 15,000 odd crores of bids to come to fruition. In addition to interstate projects, we are also seeing a traction on the renewable energy side. We would look to target our select set of solar energy assets that we are targeting in the sector, which will be with strong counterparties like GUVNL, SECI or NTPC. On something which is already announced in concrete, the KTL which is one of the last framework assets with Solar Power. We believe that is at the last stage of completion. It is going to be completed in this financial year. We would look to acquire that in line with our framework agreement. Based on our current assets itself, we would continue to deliver the INR 12.75 guidance that we have forecasted. On the balance sheet side, partly as Jyoti Kumar Agarwal mentioned, our intention would be to reduce cost of debt, diversify our source of borrowing, and maintaining adequate liquidity to any uncertainty that may come up if the COVID wave continues to remain in the country. On the asset management side, our focus will remain to maintain high availability, focus on self-reliant O&M, and many other initiatives like digital asset management and predictive analysis. We will focus on that. We will continue to focus on world-class EHS and ESG practices on our portfolio. On the industry stewardship, I think we will look to implement as soon as the SEBI notifies the reduction of lot size, which will, we believe, result into increased liquidity in InvITs and IndiGrid as well. There are some other initiatives that we are recommending the government with respect to tax anomalies or further diversifying lending from FPI sources, et cetera, that we continue to push within the government. Overall, we are extremely happy with the portfolio that we have. We believe we are in the right sector at the right time with stable assets and a critical mass of assets. Our focus will be to continue to perform as we did in the past with respect to our assets, financing and acquisitions. With that, we believe we'll be able to deliver superior return with sustainable and increasing DPU for investors in the coming future. With that, I would conclude management part of the call and would like to open up for question answer. Thank you very much. Sorry. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from DAM Capital. Please go ahead. Hi. Good evening, sir, congratulations on good set of numbers. Two questions. First, on the business side, on the acquisition side, especially given the fact that we have only KTL left and most of the new transmission assets are being built either by the large players who may not be willing to part with. Does it mean that going forward, more and more renewables either will be the focus or do you still think that there is a chance that we'll have some transmission projects coming up for sale? That's the first question. Okay. No, thank you, Mohit. I think, right, we see the growth in three buckets. First, as you mentioned, on renewable energy side, we do see acquisition pipeline over there. As we have said, renewable energy would probably remain in the size of 20%-25% of our portfolio, we would not cross that. At this point in time, we are just about few percentage points out, about 3% of renewable assets in the portfolio. There is both sizable pipeline as well as sizable headroom for us to acquire this. Second, with respect to, I would say, predictable acquisitions, which are for already built assets. One of them, as you reported, is KTL. Second, there are already other assets available in the market which are completed and revenue generating. We would look to acquire them. However, it depends on when particular investors look at monetizing that, which includes Sterlite Power asset as well beyond KTL, which are sizable assets in itself, but also beyond Sterlite Power as well, there are assets which we are looking at within the transmission space. Third is with respect to the new bids. New bids, as we have done in the past, is to partner with the developer. Like we had partnered with Sterlite Power and provided framework agreements, which gives visibility to exit to investors. We are looking to several such partnerships which would result in further pipeline, even from the new build assets. We are pretty confident about that between these three, we have sizable visibility of growth. Are you open to acquiring intrastate transmission assets? Yes, we are open to acquire intrastate transmission assets. We already acquired 1 intrastate asset, which is in Haryana. However, that is case specific, because intrastate TSAs are different, and we need to dig into which kind of agreements are in place, what kind of counterparties are there. We are open, but it eventually depends on size of the risk as well as type of the counterparty. Secondly, on the working capital side, there has been large draw in this particular quarter, which we haven't seen in the earlier quarters, I think. Earlier quarters, more or less, they have a very small draw or listed a positive number from working capital. Do you think it's a cause of worry or do you think this will get addressed? Is the July collection far better than June in terms of your billing? The way to evaluate the quality of receivables and balance sheet is to look at days receivable outstanding. Today that number is at 60. On a balance sheet level, since COD, we are at 60 days outstanding, which is not certainly a cause of worry. That's the number to evaluate in terms of what is the outstanding. The rest is quarter-on-quarter. Last quarter, as Jyoti mentioned, we did 126% collection, which means that a lot of our, I would say, customers ended up paying in advance because they received liquidity from somewhere. The moment when you have a quarter like that where you have collected 125%, next quarter where people are going to take a breather. It is just a quarter-on-quarter adjustment is what we think at the moment that is playing out. In addition to that, we believe that this quarter is also unique from the point of view that this is the first quarter under which CTU is operating independently of Power Grid. As you would know, about two quarters back, CTU separation from Power Grid has taken place, and it's been operationalized in this quarter, which had resulted into operational, I would say, delays in raising invoices and coordinating because it's a completely new setup. We are seeing the clear change in July, and we have received in July over 90% of collections as the month. I think it is a temporary phenomenon, or not even a phenomenon, it is a quarter-on-quarter change. Quarter four was extremely high collections, which means quarter one is slightly low. We have seen the receivable trend increasing in quarter two already. One more question if I may squeeze in. On the lot sizes, just some clarification. Has the SEBI board approved the lot sizes to reduce for all InvITs, right? Once this meeting gets published or notification gets published, we can apply for it, right? How much time do you expect it to distinctly materialize once it is not notified? I think we should wait for the notification, but what we believe is that once the notification is made public, it is only a matter of us writing to exchanges and some operational changes at the back end that will take place with exchanges. It's just the exchange approval that will be remaining after that. Okay, understood. Maximum 10, 15 days max, right? That's right. Okay, understood. Thank you, sir. Thank you and best of luck. Thank you. Thank you. The next question is from the line of Abhilasha Satale from Dalal & Broacha. Please go ahead. Yeah. Thank you for taking my question. Sir, we have done the debt and we have raised equity and debt. At current base, how much AUM growth we can see over a period of time? What is the maximum AUM which we can reach on current capacities? Meghana, would you like to take the question? Sorry, Abhilasha, can you please repeat the question? I lost the last 10 seconds. Sorry. We have raised through NCDs and rights issue our capital base. I want to know that at current capital base, at current debt level, how much maximum AUM we can reach? Okay. See, today our net debt to AUM, we are close to about 58% of net debt to AUM. As you know, our statutory regulatory cap for leverage is up to 70%. With that cap, our AUM can easily may have headroom to grow to the extent of at least INR 5,000- INR 6,000 crore without the requirement of any further round of equity dilution. Yeah. Thanks. The second question is our interest cost, whatever the new debt we have raised, that being at a lower cost. The cost of debt has gone down to 7.94%. We have a large repayment next year. This year, over the medium term, what kind of interest cost of debt will be there, like average cost of debt we are seeing? Sure. On that one, Jyoti, you want to give a perspective? Thanks. We've already indicated that the marginal cost of debt this particular quarter has been in the range of about 7.5%, 7.6%. This is, by the way, our 10-year debt that we have raised in this quarter. The average maturity of the debt raised in this quarter is almost 10 years. At the margin, we do believe that the incremental debt cost for us may only get better as more and more investors are allowed to invest in our paper, pension funds being the latest addition. As the market sort of appreciates our strategy and our performance a bit better. We think we should be on our path to be able to continue to expand the average maturity and reduce the average debt cost by having more and more incremental debt in the 7.5%, maybe between 7.5% and 7.25%. Look, I mean, for the rest of the year, whatever refinancings that we will be doing would be in the seven to 10-year bucket, and I would hazard, notwithstanding any monetary policy surprises, us to be able to do it inside of 7.5%. Okay. Thank you and all the best. Thank you. The next question is from the line of Pradyumna Dalmia from Lansdowne Investments. Please go ahead. Hi, Harsh Shah, Meghana Pandit and Jyoti Agarwal. Excellent performance once again this quarter. My question, Jyoti Agarwal, was regarding the factoring, which was at INR 50 crores was very low this quarter compared to the last. I just want to understand what determines the amount of factoring that we do every quarter, and what is the sustainable level of factoring one should expect every quarter? Yeah. Good question, Pradyumna. Look, I mean, factoring or any sort of short-term debt can be driven by two or three factors. One is, of course, the need to be able to sustain the cash outflows for the operations, whether it's O&M cost, debt, or whatever. Second is also we are very particular about our DPU guidance to the market. This particular quarter, the amount of factoring that we determined was primarily to ensure that there are no negative surprises on the distribution front. As we realized end April that there is likely to be lesser collection, which is seasonal in nature. At the same time, there were two factors that Harsh talked about. One was the CTU migration, and the second was this terrible second wave of COVID that hit us around the middle of April and right up to the end of nearly June, right? Based on these two, we realized that the collections would not be as we had envisaged. We had envisaged around 85%-90% coming into the year. We modeled at about 65%-70% collections, and accordingly, we determined the amount of factoring that we would need to do to ensure that we are good in terms of distribution. Eventually, the collections came at 69%, which was very much in the ballpark, and the amount of factoring was good enough for us to be able to meet the distribution guidance. As such, we did not have any shortfall of cash to sustain our operations as the reason to do the factoring, but it allowed me to meet our Q2 guidance. As we speak, almost half of the factoring amount has already been prepaid because we saw collections normalizing, as Harsh was mentioning. In the month of July, we had 96% collection efficiency. We've seen collection normalize very quickly. To avoid unnecessary drag on the interest cost front, we've actually prepaid 50% of the factoring amount. We expect to prepay the balance very soon. Based on current outlook of the second quarter as well as for the year, we do not envisage any challenges of cash flow to be able to get into factoring again. Look, this is the strength of the model now that we do have various tools in our kit to be able to tide over any short-term imbalances that might be there. We have factoring. We also have an ability to raise short-term money from the commercial paper market. We are also trying to tie up a sort of a permanent working capital line with the bank. Hopefully all of these tools will not be needed that much, but should there be a need, then we can use these to our advantage. Factoring being one of them, which we have used successfully twice. Once was in the corresponding quarter of the last year, this COVID first phase, and second, much lesser factoring amount in this particular quarter. Okay, great. If I understand correctly, so factoring is going to be used as a tool if and when we see any liquidity crunch or shortfall, and the amount of factoring is likely to change every quarter, and there might be quarters where there is no factoring required at all. Yeah, you're right. I think factoring is an exception rather than the norm. I do not envisage factoring for the remaining part of the year. It seems to pan out the way we are envisaging. This particular quarter, we had to do it for reasons that we have just outlined. Factoring is not really a norm on a quarter-by-quarter basis, but more as an exception. Okay, understood. Thank you so much. Thanks. Thank you. The next question is from the line of Rushabh Shar from Pravin Ratilal Share and Stock Brokers. Please go ahead. Thanks for the opportunity. Just one question on the fact that do we as IndiGrid stand to benefit from the fact that now there are power exchanges like Indian Energy Exchange in the listed Power Grid. Do we as IndiGrid stand to benefit in any manner? Yeah, let me take that. I think as such, directly, we don't get benefit. What do I mean by that is that most of the transmission planning in the country happens on long-term open access agreements. What that means is that most amount of transmission lines are built when they know the buyer, they know the seller, they know the corridor, and therefore they build additional lines. That's been the historical way of planning. In that regard, it does not contribute directly whether there is an exchange or not. The rationale behind building a national grid is also to facilitate, I would say GNA or other open access without long wait periods. Therefore, if you want to buy power in Gujarat from Northeast, or you want to buy power in J.&K. from Rajasthan, you don't need to wait for two, three years to make a plan and PPA and build a line, and you should have access to be able to buy cheaper power from where you get it. In that scenario, exchange is a key catalyst. For example, while it is not concluded, but you would have read about allowing distribution companies to get out of the old PPAs with PSUs or thermals and get into the new PPAs, which could be cheaper for them. In that regard, they would need to be able to buy power from exchanges or buy new PPAs. New energy exchanges would play a vital role in that process, which would eventually result into healthy discoms and healthy sector. It is a contribution of these energy exchanges into overall healthy sector, which would help transmission line owners like IndiGrid, but no direct benefit per se. Okay. Thanks a lot. Thank you. The next question is from the line of Ravi Chandra, an individual investor. Please go ahead. Good evening, Mr. Harsh and the team. Congratulations once again for the excellent performance and continued growth. I have one query to Jyoti in the waterfall slide number 11. Reserve, what you are telling, maybe just I'm clarifying. Earlier it was shown in both SPV as well as at IGT level. Now we are showing as a combined balance, INR 1,150 million is available. Is it right? Yes, sir, you are absolutely right. The INR 170 crore that we had as a reserve was a combined reserve at the SPV as well as at IGT level. We have dipped about INR 54.8 crores, but we have dipped only in the reserve at the SPV level. Overall, the reserve between the SPV and IGT that we are carrying forward at the end of this quarter is about INR 115 crores. Okay. Yeah, fine. I'm fine with, I think only one question. Things are fine. Looking ahead for one unit, obviously, I think it will attract more retailers like me. Thanks a lot. Once again, Harsh, congratulations. Thank you. Thank you. Thank you. The next question is from the line of Hitesh Nayak Kumar, an individual investor. Please go ahead. Yes. Good evening to the team of IndiGrid. I just wanted to tell that I have joined IndiGrid as a member in the month of August 2020, and I was really impressed by the way things have been presented and the transparent way the data and information is shared. As an individual investor, I just have one concern that I want to understand what are the counterparty risks to the business. When the stock market crashed in the month of March 2020, the prices of this IndiGrid also fell down drastically. If such type of event happens, I just want to understand whether the counterparty risks are there or it is just a euphoria that has happened, and that is the best time to accumulate more units from the market. Okay. This is Harsh Shah. These two are different questions. The first question was on counterparty risk. As we have discussed in earlier calls, I would have repeated that counterparty risk is an important risk for IndiGrid because we are playing in a sector where our eventual customers are not financially healthy. This is an important risk to track. However, our contracts, our different security mechanisms are fairly strong. I would say that the last part that just because we are providing a monopolistic service as transmission at a very limited or a minor cost or a fraction cost, our customers who even are in a worse financial situation prefer to pay, because it's a kind of a lifeline to evacuate and import power. That's what has kept the sector or the transmission sector healthy even though the distribution sector haven't been healthy. having said so, just to go back to the quarter one of last year and entire financial year last year. Right. This is a test, actually. In last 20 years, at least I can say 15, 20 years, 2008, it didn't exist, this is one of the worst disasters that one could have expected for both country, financials, everything put together, right? In that as well, our collections did not fall materially. While the quarter one collections last year were 50%, that was not because people didn't want to pay, that was because people couldn't go to office for one and a half months, couldn't raise bill. The whole cycle administratively got impacted. After quarter one, quarter two, quarter three, quarter four, the collections kept on increasing. As a year whole, we collected a little bit more than 100% for the entire year. Now what does that say is that even in the most stressful scenario, at least in our lifetime, that we have seen operationally, financially, the contracts prevailed and the payments kept happening. I would say that the last year has been a testament of that. Yes, it is an important risk, but it remains, I would say, a minimal risk. On the other hand, price is something which so many factors are impacting the price, which is beyond control of the management to guide on, et cetera. I think if at all you look at the fall, you need to look at the fall in relative terms to other investment options as well. I think quarter one was an important fall, a large fall that happened everywhere. It is also linked to so many global events and domestic events that took place, and therefore one needs to compare relatively, it impacted us lesser. Yes, people who invested at that time, in general everywhere, they were rewarded eventually. That's very difficult for management to guide on that such fall will not happen because that's linked to the liquidity perceptions, euphoria or opposite of euphoria, whichever way. That's a difficult one for us to predict. On the collection side, I would say we have a strong contracts and minimal risk on that. Whenever such events happen, we should be ready with the ammunition. Okay. Thank you. Thank you. Thank you. The next question is from the line of Sunil, an individual investor. Please go ahead. Hi, Harsh. Hello. Yeah. Hi. Hi. Congratulations on completing three years. Being a long-term investor, I think this is one of my best investments. My question is regarding your acquisition pipeline, particularly given that PG InvIT doesn't have a RFO with the Power Grid, do you think it is a way of government saying that private sector can bid for it? If it is allowed, are you going to bid for it? Very interesting question, Sunil. This question came earlier and I did not speak about it, so I would certainly clarify our views on that. PG InvIT coming into the picture, I would say, is a good thing for IndiGrid in general, because more and more people are aware about transmission business and InvIT now. It's such a large player coming and monetizing and putting it into InvIT. However, our view is that it is not government's role to run monetized assets, right? Whichever way government choose to monetize such passive assets, their focus should be on maximizing value for those assets in selling them. Second, realizing maximum amount of liquidity that the government can get, either via Power Grid or whichever way. Third is time to market or what is transparent bidding process, right, which can be run. We believe that as a government, such a large monetization program, as and when happens, it should not be done on a bilateral basis. IPO is slightly different because IPO, you do the IPO and call for auction. By virtue of Power Grid owning only 15% in the InvIT, it is not a PSU anymore, right? Any sale that happens from Power Grid or any government body to another government body or to an InvIT, we believe should be done on a transparent basis via a global invitation of tenders instead of any bilateral way. However, we can only express our views, right? That is the transparent way the auction should run. If government decides to do a transparent auction where we have an ability to bid for these assets, we will certainly bid for them. Okay, great. Thank you. Thank you. We would like to remind participants that you may press star one to ask a question. The next question is from the line of Rushabh Dalal from Pravin Ratilal Share and Stock Brokers. Please go ahead. Yeah, thanks for the opportunity again. Just a question on the operational front. Since IndiGrid is a AAA listed InvIT, and we have lot of marquee investors now, even pension funds are investing. Just wanted to understand that the InvIT, they are not in the list of approved securities by exchanges and RBI. Is IndiGrid taking any steps to ensure that we as InvIT are in the approved list of securities soon? Okay. I'm not very aware of this point. Is your question towards can you pledge InvIT units as security? Is that the question? Yes, exactly. That's exactly the question. No, I don't know, maybe Jyoti or Meghana if you have a clue, but we're not aware about this term of approved list, but we are definitely aware that these securities can be pledged, and there is a specific policy which SEBI has made for sponsors to pledge these securities. I can tell, at least in IndiGrid case, we have made adequate disclosures. Sterlite Power, who was the sponsor who started IndiGrid, did pledge their shares or rather did pledge IndiGrid units to borrow, and so have other sponsors done for respective InvITs of their shareholding. I'm very sure that legally it is allowed to pledge, and we definitely know several cases where NBFCs and banks have lent against it and taken units as security. Exact provision of what prevents in RBI, I'm not very sure. This can certainly be used as a security for borrowing. I just brought up this question because of the fact that we as retail investors have been unable to pledge it for some odd reason. I just wanted to know if something that can be done on the IndiGrid side which can help retail investors to pledge the units and avail a loan. Sure. We would consult with lawyers and understand if this can be done. This is largely an RBI issue. We'll see what can be done out there. I think we from company, we don't necessarily recommend to pledge for investment, but that's a personal decision. Right. We would certainly check with lawyers and RBI to see if something can be done on this. Okay, thanks. That's very helpful. Very helpful. Thank you. The next question is from the line of Shobit Gupta from Exide Life Insurance. Please go ahead. Hello. Good afternoon, sir. I had a couple of questions. First was, this practice of using reserves to maintain the DPUs. As an investor, how do I look at in terms of, though it looks to me as a way of smoothening DPUs, but from a long-term perspective, equity market sometimes are unfavorable for you to raise. How should we look that in terms of discipline? Second question was, I think you spoke about the power exchanges. If that becomes a reality in a bigger way, does it limit your opportunities for growth in a certain way in future? One third question, if I can ask, is about the borrowing from the InvIT level and lending to SPVs. What I understand, there's a lot of arbitrage involved in that. I mean, you can borrow at 7.5%, 8% and lend at 14%, 15%. I'm not sure about the numbers, I'm just giving examples. How should that also to be looked at from an investor point of view? It is the right way to use that arbitrage to pay distributions, or it should be purely from the business perspective? Okay. Yeah. Cool. We would try to give answers on that front. I think the first one on the sector and second one that you asked first on the sector, I think increased power exchanges, increased liquidity in electricity units will require a far more robust grid. Okay. Which would eventually require a far more investment in transmission. This is going to require much more investment in transmission because you would need to keep certain grid idling because somebody somewhere will want to use that grid at the call of a button. Instead of focusing on the grid utilization, you would focus on keeping the grid ready so that you can buy the cheapest power from where you want to buy. The grid cost today is let's say about 6% of the total cost of generation in the country or cost of sale. Okay. Even if you double this grid cost, 6%-12%, if it reduces just by 10% reduction in your tariff, you are still NPV positive. As a sector, as a country, this is going to be rather contributing to more investment in transmission rather than reducing. That's the view that we have. On the reserve, I think what we are doing is extremely prudent. Let me give you an example. If we were distributing on an annual basis, the requirement of reserve may not have existed. Right. On an annual basis, you receive a particular cash flow, it will meet. However, we have decided to make a conscious choice and distribute on a quarterly basis so investors have a better yield. Now, what that does is that the entire cycle, starting from a revenue, cost, financing, and eventually distribution to investors becomes quarterly. Right. One can't predict possibly the quarter-on-quarter business operations, liquidity, seasonality, et cetera things. In general, as this happens in all sectors in India, quarter four economic activity is highest, and quarter one therefore is lowest in a sequential manner. Therefore, we are like any other part of the economy in India, we are, I would say, a saw. Quarter one goes low, quarter two is higher than quarter one, quarter three lows, quarter four is the highest. The cycle continues. Anybody who chooses to take quarterly distributions and want to maintain predictability should run with some reserves. Right. For example, last quarter, we had such a good collection that we accumulated INR 100 crore of reserve. We can use it next quarter or the subsequent quarter. This is a quarter on quarter adjustment which I think is healthy, prudent, and that should be followed if we decide to do. If we do annual, we don't need to do it. Right. To question on what you should look at for the health of the business. Health of the business, you should look at the balance sheet. You should look at our receivables outstanding. That gives you that as a balance sheet. Are we collecting our dues beyond this periodic up or low? Okay. That gives you a picture that we are operating the transmission line, within five years, our days outstanding is say 50 days only. That means business as a whole is doing okay. Quarter-on-quarter, 60 becomes 80 becomes 40. The quarter you are at 40, the next quarter is going to be 80. On an average, you will revolve around 60 days. Fair enough. There's a third question you asked, I guess. Third was about the loan from the InvIT level to SPV. Okay. I think, simple concept over there is, our whatever interest we recover from SPV by charging at higher interest or unsecured loan, we distribute to our investors in form of interest. Investors pay tax on it based on their jurisdictions. Therefore, from a government or a tax perspective, nobody's losing. You're charging SPV, you collected that, and you paid to investor, and investor paid tax. That way it is a transparent method. Even I would say POWERGRID InvIT is following that. The Government of India InvIT is doing that. There is no. Is this not a loophole that is giving us a higher distribution if it goes one day and we don't see that kind of growth coming back? That's not a risk we foresee. One is we don't see that kind of a risk, okay? The second conceptual clarity is that in InvITs, you get, PAT plus depreciation, both things to you. Correct. These are not manufacturing plants that you need to build in five years. These are perpetual assets. We need to provide for depreciation for accounting regulations. In reality, there is no depreciation of the asset. Right. How do we make this depreciation reach to investors in their bank account? That is why the InvITs are given as a trust structure that you can pass through. How do you distribute depreciation to investors? Because that is under a company that you cannot figure out another way. This method, when you charge 14%, it includes depreciation. PAT plus depreciation. Therefore, this eventually method is in favor of investors to suck out all the cash flows that can reach to the investors. Right. Thank you. Thank you. Thank you. The next question is from the line of Swarnim Maheshwari from Edelweiss Securities. Please go ahead. Yeah, sure. In one of the replies, you touched upon that for the future growth, you will be looking to partner with someone for the bids. Are we talking about participating through the equity mode wherein we will be investing, say, 2% or 3% of our AUM for the new bids? Okay. There are several types of partnerships, Swarnim. There is one partnership where there is a HoldCo that we give right of first offer or right of first refusal that we get. We don't invest anything in that. The second is type of framework agreements where we acquire the assets when they are completed. It is binding on both parties. Third is, let's say, taking minority interest via consortiums, right? We explore all of them. Again, depending on the project, size, risk, partner, it changes. The options are changing. We are evaluating all of them. I would not say 2%, 3%. The 2%, 3% of overall amount becomes fairly large, right? We are just looking at what all partnerships can be formed, including minority interest. That will be a much smaller amount. Yeah, I guess the regulations actually allows us to park money at about, say, 10%, right? 10% of the overall AUM under construction for this. Yeah. The regulations are 10%, which is a very high number. Yeah, I know. That's a very high number at about INR 2,000 odd crores. It will be very hard to get. Are we looking to go through the equity route at this point in time or not? No, we don't have anything concrete signed at this point in time. Otherwise, we would announce it. We are talking to several players to evaluate what is possible. Right. Got it. That is very clear to me. Thank you. Thank you so much, and all the best. Thank you. Thank you. We would like to remind participants that you may press star one to ask a question. Participants to ask a question, you may press star and one now. As there are no further questions, I would now like to hand the conference over to Mr. Swarnim Maheshwari from Edelweiss Securities Limited for closing comments. Thanks, Mallika. I would like to thank IndiGrid management for allowing us to host this call. Thanks, Harsh, for your detailed insights, and thanks to the IndiGrid team for your valuable suggestions and comments. Thank you so much. Harsh, any closing comments over here? Thank you, Swarnim, and pretty excited about the journey till now, and we are looking forward to continuously giving value accretive acquisitions and deliver superior distribution plus growth to our investors. Thank you. Thank you. On behalf of Edelweiss Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.