Ladies and gentlemen, good day and welcome to the IndiGrid Infrastructure Trust Q1 FY23 results conference call hosted by Edelweiss Securities Limited. As a reminder, all participant lines will be in 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 touchtone telephone. I now hand the conference over to Mr. Swarnim Maheshwari from Edelweiss Securities. Thank you, and over to you, sir. Thank you, Kirti, and thanks for dialing in call. I welcome you all on IndiGrid Infrastructure Trust Q1 FY 2023 results con call. From the management today we have with us, Mr. Jyoti Kumar Agarwal, CEO and Whole-time Director, Ms. Divya Bedi Verma, CFO, Ms. Meghana Pandit, Chief Investment Officer, and Mr. Satish Talmale, Chief Operating Officer. I would like to hand over the call to Mr. Jyoti Kumar Agarwal for his opening remarks, post which we will have a detailed tour there. Thank you, and over to you, sir. Thank you, Swarnim, and good afternoon to all the investors on the call. I'm sure by now you would have gone through the presentation that we have shared yesterday. I'll quickly take you through some portion of the presentation, and then the rest of the leadership team will take you through the rest of it, and then we'll throw it open for questions and answers. If you go to the Slide four of the presentation, it's an overview of the overall quarter and highlights. At an organizational level, the first and foremost thing that I want to talk about is the transition in the leadership. We've seen Harsh moving on to you know, newer pastures. Given the systems and processes that have been in place, we've seen a seamless transition in both the CEO role as well as the CFO role. We've also seen one more leadership change, Swapnil Patil, who has been the company secretary for a long period of time with us, ever since inception. Due to personal reasons, you know, at his family level, he had to move on. The deputy company secretary, Urmil Shah, has been appointed by the board in his place effective August 1. We have completed five years, and over the five years, we've grown tremendously through value-accretive acquisition, superior asset management framework, and best-in-class corporate governance practices, while ensuring continued stability and predictability in the platform. We thank all the stakeholders, including unitholders, for their trust and confidence in us. On the financial performance update this year, the revenues and EBITDA have been more or less steady, a marginal growth of about 1% or 2%. This marginal increase was largely due to robust asset management framework, where we could get some cost synergies and additional incentives despite no major acquisitions during the period. Our collections this quarter are better than the corresponding quarter last year, although still short of the pre-COVID level. We've seen you know much better traction in terms of collections in the last couple of quarters. In line with our DPU guidance, the board of directors approved DPU of INR 3.30 for Q1. We are on track to achieve the DPU target of INR 13.20 per unit by FY 2023. Our AUM was relatively unchanged at about INR 21,000 crore, leading to a net debt to AUM of about 58%, leaving enough headroom for growth before we hit the statutory cap of 70%. On the operational performance side, we were impacted by unprecedented rains and floods in one of the regions where we have a large asset, which is the Northeast region, which did impact availability. Nevertheless, we were still able to manage you know sort of a handsome average availability of 99% in quarter one. We've been able to implement DigiGrid across the entire portfolio. Satish will talk later on in the presentation in terms of what that entails for us. If you move to the next slide, on the industry update, we're seeing, you know, a robust coming back of power demand. We're seeing a peak power demand of an all-time high of 213 gigawatts in April. Again, for the quarter, it was very high at about 210 gigawatts. This is largely due to the post-pandemic economic activity coming back, also helped by heat wave in northwest India. We have crossed 400 gigawatts of installed capacity in June, and it's nice to know that we're inching towards 30% share of renewable. In terms of the regulatory developments or industry developments, we see a very, very robust announcement in terms of the spend estimates on transmission over the next five years, almost as high as INR 1.2 trillion. You know, as high as 32,000 circuit kilometers of transmission lines, and nearly more than 200,000 megavolt-ampere of transformation capacity. Now, all this would mean that there would be a lot of bidding in the ISTS space, and many of those assets would come through for you know the market of corporate control in the secondary market, and we would be very actively looking at it. Apart from this, I think the NMP, the National Monetization Pipeline, is also gaining traction, and we do expect some of the assets in the transmission space to be coming in the market over the course of this financial year. We'll be actively looking at this space for opportunity. We've seen investments in interregional transmission capacity, largely for the evacuation of the new generation centers to the grid, mostly renewable. We've seen one of our assets that we have bid out in Khargone also being a part of that. We're seeing a lot of action, regulatory and otherwise, on the battery energy storage space, which we are also proactively watching to see how do we leverage on this as a resilient play to our current portfolio. I'll now hand it over to Satish to take it over the next slide, please. Thank you, Jyoti. The update on the quarter one operational performance. Again, from EHS perspective, we had a zero event quarter. No injuries, no incident. The proactive reporting culture and lot of measures around developing EHS culture has helped to maintain consistently zero harm status. On availability, quarter one average availability was at 91%. If you look at the bar chart, I think you'll find two assets which are lower than the target availability. One is RTCL. There is no practical impact on IndiGrid because this was an identified event. It was a road and highway diversion project which got recovered from MSHR., both from revenue loss perspective as well as from cost perspective. On NER, as Jyoti mentioned, we had an unprecedented situation in Assam, and due to flash floods, one of the tower got collapsed. Happy to share that we could able to restore that tower and lines are already charged. We are highly confident that we will measure claim passed through. On reliability, I think happy to share that in quarter one, we have achieved lower trips per line compared to last year. Typically, quarter one has increased trips per line because of changing weather condition, but the performance was better than the previous year quarter. Digital asset management, glad to share that all our assets are on digital platform. That means that every field activity which is performed are getting monitored and clearly captured on the digital platform. This will definitely help IndiGrid to create a platform which will be highly sustainable to enhance our lifecycle risk and improve our cost efficiency as well. At the same time, we have integrated digital platform with our SAP system, so that activity is also completed. Emergency preparedness. We do have emergency restoration system which has really helped us during this unfortunate incident in Northeast. We were able to restore it. Of course, the investment in climate forecasting technology has helped us managing our outages and mitigating any potential risk which gets encountered due to adverse conditions. Glad to share that we are now certified with ISO 27001, which is a cybersecurity certification. All of our risk mitigation measures are largely completed on cybersecurity front. On the right-hand side, there are few indicators which spoke about trips per line. The focus on EHS trainings continued. Lost time incidents are zero. There is a good track record of reporting culture, which is reflecting in the numbers compared to last year, you can see that. On utility solar, we generated total 57.52 million units with CU of 19.08%, with the plant availability exceeding our targets. It is slightly lower compared to last year because of the cyclone which happened in the month of May, which impacted the solar radiation. That's why it's slightly lower. Otherwise, availability, reliability, performance is meeting expectations. Thank you. Will hand over to Divya. Hi. Thank you, Satish. I'm on Slide seven. Quarter one financial performance. For this quarter, we have gotten a revenue of around INR 561 crores and EBITDA of INR 512 crores. As against the previous year quarter, there's a margin growth of 1% and 2% respectively in revenue and EBITDA. NDCF generated for the quarter stands at INR 115 crores. As compared to the previous year quarter, we see a downfall. For comparison purpose, I will exclude one-off items like last year quarter we have done tax waiver of around INR 50 crores. Like to like basis, we are almost there on the same numbers, a stable revenue and a stable NDCF. The DPU for the quarter as approved by the board and after our guidance is INR 3.30 as compared to the previous year quarter which was INR 0.19, EBITDA growth of 4%. The platform is showcasing stable, sustainable growth and value creation commenting on DPU. Commenting on the collection for the quarter stood at 77% as compared to the previous year quarter collection was at 70%. We have seen during last two years in COVID, the collection in quarter one have been largely impacted because of COVID. In financial year 2021, we've seen a quarter one collection stood at 56%, last year 70%, and this quarter at 77%. We are catching up with the collection, which is a trend of catching up with the collection. Just to update, on the first of July, we plugged in another additional day. Otherwise the collection percentage for quarter one would have been around 80%+. The DSO days stood at 65 days for this quarter. Coming on Slide number eight. As approved by the board, the distribution of INR 3.30 would be in the form of interest, INR 3.06 and a capital repayment of INR 0.24. For approx. 70 crore units this quarter we will be distributing INR 201 crores. With this distribution of INR 231 crores, total distribution since inception of IPO is around INR 2,200 crores across 400 crore units, equivalent of INR 61.82 which have been distributed till date. The record date of this distribution will be August 1, 2022, and the tentative distribution will be happening via KDPP. The graph on the right-hand side which showcases 3%-4% year-on-year growth on our quarterly distribution trend. Coming on the next slide, number nine, which is the showcase of our EBITDA to NDCF ratio. Consensus is INR 510 crore at EBITDA level with adjustments of various finance costs, working capital, maintenance CapEx. We have generated NDCF of INR 118 crore in this quarter. As we started with a healthy reserve of INR 221 crore. This quarter without doing any factoring or any other measure, we have dipped into a reserve of INR 116 crore, and our closing reserve stands at INR 105 crore. With this we will be achieving our distribution of INR 231 crore as per our guidance. Now I'll hand over to Meghana to take up the next slide. Thanks, Divya. Coming on to Slide number 10. This which continues to remain robust, with AAA rating by all three rating agencies. In Q1 FY 2023, out of the overall refinancing of FY 2022 is about INR 3,400 crore. Happy to share that we have refinanced or raised, 88% of that term. Other than INR 300-odd crore, we have refinanced, the entire requirement of refinancing for, this fiscal. That has happened at an average borrowing of about 0.94 for this quarter, which is substantially better than the overall average cost of debt, which stands at around 7.51. This is again lower if you look at Q4 of FY 2022, this stood at about 7.76. With this refinancing we're getting done, the average cost of debt today stands at 7.51. So we are almost 76% of overall borrowings being fixed rate. We are geared up to face the headwinds of the interest rate environment that we are seeing. We have a very healthy net debt to EBITDA of about 58%, leaving significant headroom for future acquisitions. Our cash balance again stood at a healthy level of INR 880 crores. This includes about INR 230 crores for distribution and leaves about INR 260 crores of debt swap and rest as free cash. If you look at the right-hand side pie, shows the diversified book of the total gross borrowing of INR 12,700-odd crores, which is between NCD of 40% and bank loans of 60%. Even within the NCDs and bank loans, you can see a very diversified mix of investors across mutual funds, corporate, retail, public entity holders, private as well as public sector banks put together. Coming to the refinancing schedule on the slide. We can see that it is very well spread overall, ranging between about 10%-12% of the gross borrowings. There isn't any particular year in which there has been a bunching up of maturities which we had seen for FY 2023, which now stands largely refinanced. Moving on to the next slide, which talks about our return. We continue to perform on a total return basis. Total return being represented by the distribution and price change. On the distribution part, we have delivered about 59% and price change is about 0.2. Aggregating that to the total return of 101%. Annualized return being 15% compared to a broad debt product of 10-year, 30-year G-Sec. We have outperformed that. On the right-hand side as you can see with pure play equity indices as well as other indices, we have outperformed those. More importantly, on a risk-adjusted basis, which is depicted by the beta stood at the lowest levels of 0.08%. We have been consistently outperforming the comparables for this quarter as well. Here we hand it over to Jyoti to cover a bit about the business outlook for this year. Jyoti. Thanks, Meghana. Going forward, we will continue to focus on maintaining stable operations for predictable and sustainable distribution while looking for value accretive acquisitions. I think on the portfolio side, with the implementation of DigiGrid across the entire portfolio, we are very confident that it will enable us to strengthen our operational capabilities through predictive, preventive and risk-based maintenance practices, which is very important given the diversity of the portfolio and the terrain that it operates. We will continue to play a stewardship role in advocating policy initiatives for industry, including index inclusion and tax reform, and remain very optimistic about the growth potential of the power sector on the back of supportive regulatory policies and growing investments. We believe we are well-positioned because, you know, steady cash flows and low cost of debt to tap into the opportunities in transmission, solar, and other related adjacencies in the country. That brings us to the end of our quarterly update. I would request the moderator to open it up for Q&A, please. Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to give their name while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. The first question is from the line of Mohit Kumar from DAM Capital. Please go ahead. Hi. Good evening, sir, and congratulations on another steady quarter. Of course, we have gone through the entire acquisition, you know, the last few years. How do you see the pipeline, let's say third-party assets pipeline, especially for transmission? Looking at this point of time, do you think there are sizable opportunities available or it's too low, and we need to look for the different kind of assets to grow our business? Are we looking to acquire something in this fiscal year? Yeah, Mohit, a good question. I'll let Meghana address it in detail, but I'll share my perspective. I think if you look at our business, the core is transmission and we have a reasonable outlook in terms of pipeline in this space. Now, obviously, M&A you know happens in spurts. There's also some bunching up of bidding that has happened over the last you know few years, where some of the assets will, in our opinion, come through in the market for corporate control over the next 12-18 months. We are proactively scouting those opportunities as we speak. We'll be very actively looking at those assets as and when they come into the market. I don't see there being a dearth of opportunities, but yet we will have to be selective in terms of what opportunities one plays with, given you know, our whole value proposition of ensuring that these are value accretive to InvIT at the end of the day. There would be obviously opportunities from the NMP process. We would like to believe for a fair price discovery, the PGCIL assets as part of NMP should be auctioned. In my opinion, they will be auctioned, and we'll be actively looking for those opportunities as well. There are opportunities. Of course, we cannot talk about some of the assets specifically where we are working on, and I would hesitate to give you guidance in terms of whether we'll do asset acquisitions this financial year or not. When there is the moment where, you know, there is development on the M&A front, we'll obviously come to the market and announce. I can tell you that there are opportunities and the M&A team is actively scouting for those. Maybe Meghana can provide more details please. Sure, yeah. Adding on to what Jyoti said there, Mohit, if you look at from an acquisitions perspective, you remember that the Framework assets, Framework agreement that we have entered into with Sterlite, there is one asset which achieved COD in December 2021. That is one of the assets that we are looking to acquire. As and when you know we complete the process, we will of course announce to the market. Other than that, I would say a couple other on the operational transmission side also remains you know that we are looking at. The third bucket that I would categorize acquisition opportunities would be, you know, the solar projects that we had said we will be very selectively looking at, specifically with long-term PPAs with SECI NTPC and from counterparties such as those. I think JP also mentioned that we are very closely watching and monitoring the battery energy storage systems utility-scale ones, where we believe a lot of our, you know, operational efficiencies will come to play plus as a transmission player, we already have these leverages which we can work towards. This is an adjacent space that we are closely looking at in addition to the NMP, which I think Joyit spoke about. These are the ones, you know, from an acquisition perspective, that we are closely looking at, as we speak, yeah. Where does fit the clarity on the power grid National Monetization Pipeline, the second tranche? Any sense of, you know, anything you are hearing from the government on the timelines? I think power is due. I think there are some structural nuances which we are trying to iron out, given the intent is to try and not sell the assets while selling the rights and, you know, the availability associated with those assets. That's, you know, an engineering problem which for power sector in particular, given the highly regulated space, it is taking some time to sort out. We believe, you know, towards the second half of this financial year, some assets in the transmission space will come through and there will be a market-determined process. If we are actively looking for those assets to come in the market, then we'll be bidding for them for sure. After the cash flow side, I think that there's an increase in working capital in this particular quarter. Is this temporary, or do you think this is going to reverse, or is this going to be permanent? I said the first quarter generally is the weakest of the quarters when it comes to collection. That has been the historical trend. While this quarter we were better than last corresponding quarter of the last year, but at 77% much lower than the average for the year. This is a usual trend of working capital because of collections being lower, it tends to go up and then normalizes over the remaining quarters. Understood. Thank you, sir. Best of luck. Thank you. Thank you. The next question is from the line of Ritesh Parikh from Reliance Nippon Life Insurance. Please go ahead. Hello? Hello, am I audible? Hello. Yes, ma'am. You are audible. Please go on with your question. Yeah. Congratulations on the good set of numbers, and thank you for taking my question. I just have one main question, I mean, that is pertaining to the availability of the transmission lines, like for two projects. For two lines, we've seen that it has gone below the requirement as such. The reasons are actually provided. We wanted to understand, with respect to this, is there any P&L impact to this? And if yes, how much? And also like, going forward, any corrective actions or steps which we may have taken with respect to the same. That's my first question. Second is the follow-up question on the working capital is majorly that, you know, this time because of the high working capital, I understand that this is a quarterly seasonal phenomena that way that usually when the collections are lower and hence the working capital is kind of really high. We've seen a little dip in the reserve. So, I mean, if you could just throw some light with respect to the building of the reserve in the remaining quarters would be helpful. Yeah. Thank you. Yeah, thanks. Yeah, I'll probably take the question on reserve and then, Satish maybe can address your questions on lower availability in those two assets that we spoke about. If you look at our reserve build up, generally in the first quarter, you know, of the year, there is a dip in the reserve because of, lower collections, right? Of course, if you look at the last two years because of the COVID impact there, the dip in the reserves was quite steep. Now we have been doing factoring in the first quarter, to meet our commitments on DPU, which sort of gets normalized in the next quarter. If you look at the quarter one of FY 2022, there was a factoring of INR 50 crore that was done. If you adjust for that, the actual collections are comparable at about INR 180 odd crores in last year first quarter and about INR 115 odd crores of NDCF in this quarter, right? It's all comparable. There was a one day anomaly where about INR 20 odd crores of collections were supposed to come on the thirtieth of June spilled over to the first of July. If you add that then like to like, I think it's comparable compared to last year. We did not do factoring because one, there was a very healthy reserve of almost one quarter of DPU. We had a bumper collection in March quarter, and so we thought that instead of having a negative carry where your cash is earning at 3%-3.5% and you pay, you know, much higher rate on the factoring, we decided to dip into the reserve. We don't see this to be a worrying thing. We will see a catch up of the reserve in the ensuing quarters, you know, to levels which are more normal. I don't think, you know, we as management are that much worried about it. We will see a gradual sort of normalization of reserves in the coming quarters. Maybe Satish you can address the lower availability in RTCL and ENCIL. Sure. Thanks, Jyot. On these two assets, the number one RTCL is basically a road line diversion work, where all the commercial losses are recovered. It's basically a contractual arrangement wherein we perform our obligation to correct the line and NHAI, you know, provides for recovery for the cost as well as for revenue loss. That's pretty simple. On Eraniel, as it's a force majeure event, definitely it's qualified as a force majeure and we will get the grid availability certificate. On the corrective action, those are on two fronts. One is on temporary restoration, so the line is already charged. Which caters for immediate power requirement in that particular region. The permanent restoration will take some more time because we have to rebuild the foundation and then monsoons are also there. Looking at that, once we complete this job then definitely we will get the availability certificate. This will bring us back to our original availability targets. I hope that helps. Yeah. Is there any P&L impact because of any hours? Yeah. Divya, you want to take this question on P&L? Or do you want to address that? Yes. Okay. For the current quarter, we have considered a P&L impact of negative INR 12 crore, but which is temporary in nature. As we have a confirmation of post measure, and we are expected to receive this certificate by August, we will reverse. This will get INR 2 lakh in the subsequent quarter when we achieve the certificate. Understood. Very helpful. Thank you so much for answering my question. Thank you. The next question is from the line of Vivek Ramakrishnan from DSP Mutual Fund. Please go ahead. Hi. Good evening. I'm sorry to be like a stuck record on this collections bit. But I was just trying to get the rhythm of your collections because it you know it changes the working capital cycle. Is there any predictability to it or is it you know do we need to see it quarter on quarter in terms of how it grows and eventually hope that because of rarity you will get your collections? The second question related is is there any errant counterparties in the overall collection pool that is causing this delay which which can you know easily get righted in another quarter? Those are my questions. Thank you. Yeah. Those are good questions. I think, you know, the second question is related. I mean, there are no, like, specific counterparty risks in the collections. We got the advantage of being a part of the IFSCG tool. So, you know, whatever risks are there are generic to the entire, you know, transmission service providers and not specific to us. In terms of the patterns of collections, I think this is pretty much the normal pattern of collection that we've seen across the last five-six years. Just that the first quarter collections, despite being the lowest, are a little bit higher than what we've seen this quarter. Normally they are in the range of 90%, but they are the lowest for the year. There's some bit of, you know, post-COVID catch-up which is supposed to happen. Also, you must be mindful that there was a little bit of a frontloading of collections in the March quarter. We saw a tremendous uptick in the collections in the month of March, for example. That has also led to a little bit of lower collections in this particular quarter. But I don't think there is any aberration here. You know, this will normalize over the next couple of quarters, as you will see. Given this is an IFSCG tool, this is sort of not specific to us. We are not getting any priority over others. It's just that this is the overall systemic collection at the CTU IL and distributed proportionately to all the transmission service providers. This is endemic to the entire transmission industry as far as ISTS is concerned. We don't get any one way or the other. We are not higher than anybody else and not lower than anybody else. Yeah? Yes. Thank you. Yes, got it. Wish you luck with your team. Thank you. The next question is from the line of Rahul Marathe from ICICI Prudential Pension Funds. Please go ahead. Yeah. Thank you, sir, for taking my question, and congratulations on good set of numbers. Just wanted to know on two things. On the BESS side, you said that you are looking at various opportunities. If you could just quantify some of the upcoming opportunity or anything on that side. Secondly, on the factoring that you had mentioned, what are the costs that are being incurring on the factoring in terms of annual percentage? Rahul, we have not done any factoring this quarter. We had done it in corresponding quarter of the last year. There's no factoring costs that we have paid in this particular quarter. In terms of BESS, yeah. Yeah. For the previous year, what was the rate that you paid? I wanted to understand the rate. I think that is generally a 2%-2.5% negative carry. I think if my memory serves me right, we were at about 5.5%-6% versus a cash yield of about 6%-6.5%, right? There is a negative carry which we decided given the such a healthy reserve, we don't want to do that in this particular quarter. Yeah. Yeah. On the- Yeah. On your question on BESS, I'll let Meghana address the specific details, but the way we are looking at this opportunity is that this is very, very adjacent to the transmission business, given that many of our substations have a lot of extra land and you don't need that much extra land for setting up a battery energy storage station. What you need is connectivity to the grid, and we are the grid. This is also asset, no moving parts and availability-based revenue mechanism. We see a lot of adjacency as far as BESS is concerned with our transmission footprint. That's where the similarities end and the differences start. Technology-wise, this is an evolving space. A lot of moving parts there and the regulatory and the commercial construct is also evolving globally and so in India. We are looking at it very, very closely. We see this is a very attractive space to sort of foray into in due course. Some certain things will have to fall in place, especially the regulatory and the commercial certainty for it to sort of fit very well with our overall value proposition of predictable and savory cash flows, right? We're watching it very closely. We're into the whole bidding process, giving our suggestions to the regulators, the authorities, and keeping ourselves abreast with the developments with the ecosystem. That once it sort of fits the right box, we can play a meaningful role here. In terms of the specific opportunity, maybe Meghana can elaborate about this. Yeah. Rahul, typically from a size perspective, it varies on, you know, what the bid specifications are. It can like, you know, it can range from 200 MW to 500 MW-600 MW. It's very bid specific per se, and we are seeing that, you know, this market is evolving. To be honest, you know, we'll not be able to mention a particular number, because it's a range. I think what is important is this adjacency is something that we are closely monitoring as well. As and when, you know, we participate in it, we'll be able to throw more light on it from a quantum perspective, what it is that we are targeting. Yeah. Okay, thank you. Thank you. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead. Before I ask the question, just a clarification. You mentioned the revenue loss of INR 20 crore for the NER, right? INR 12 crores. INR 12 crore, okay. Two questions. First of all, you know, now that we have shown a YoY growth of almost 12%, it means almost five quarters we haven't been able to, you know, add any assets or AUM, largely. This is despite, you know, many of the sellers might be anticipating an increase in the rates. Despite that, we haven't been able to do anything on the AUM front. Also it is more surprising because you added two more dimensions to it. One was solar and second was battery that we have been talking about. Despite all of this, you know, five quarters gone, no asset addition, very, very surprising. You know, if there is any specific information that you want to share, why that hasn't been done, especially in a, you know, rising interest rate scenario because the sellers would know that asset prices will go lower and many people would have anticipated that. That is number one. The second is, again, you know, we have been looking at this big refinancing chart for FY 2023 for a very long time of INR 2,300 odd crores. Ultimately we did it in the June quarter of this year, where we would have got a much higher rate compared to what we would have got earlier. I think a lot of people have been giving this feedback for a long time that if possible we should have done refinancing earlier, then why did we wait all the way for the rates to increase? Any covenants or specific information that you can share why it had to be done in one Q and not earlier when so much of feedback was given around that? Sarvesh, first of all, you know, you may be surprised, but frankly we are not surprised that, you know, we've not grown the AUM because that's not really our core value proposition. It's important that we understand our core value proposition is that we grow the AUM, but we grow it in a manner which is fitting with the business model, with the strategy of the platform, that it has to be value accretive, and it has to generate NDCF, which provides predictable DPU. If you look at the market for transmission, I don't think there have been too many secondary transactions. In fact, hardly I can recognize or remember, standalone transmission assets, being available in the market. We're patient and, that's the right thing to do. When the opportunity comes, which fits into the model, we will buy it. We don't have to grow for the sake of growth, and definitely not at the cost of predictable distribution. That's an important thing which I thought I'll address. In terms of, you know, the second question, maybe Meghana you can address that. Yeah, sure. Sarvesh, you know, if you look at the cost of borrowing, which we have already refinanced, it is I would say substantially lower than 8% or our average cost, which has been there. More importantly, in line with the low-cost interest rate environment that we work in. We have taken advantage of, you know, the interest rates which have been there. More than the covenants, you know, we had lined up refinancing and we had lined up a line of financing specifically for this refinancing. When the opportunity was there, we had refinanced it through August. Not very sure, you know, there was no point in refinancing it and paying any specific prepayment or breakage cost. However, idea was to preempt that we tie up in advance and that, when the opportunity, you know, got provided. Okay. First follow-up on the first question is, so solar was also that we added, right? I understand transmission, you know, very little has been done on the deal side. But what about solar, which was at a higher IRR, compared to our average assets? And that's where we added because we were seeing, sort of a dry run on the transmission side. You know, are we not seeing any opportunities, which will suit us in the solar side? Because that hasn't grown, that book also hasn't grown much. Secondly, on this refinancing side, so let's say, you know, six months back, what was the rate at which we were raising and what is the rate at which we have refinanced this INR 2,000-odd crores, if you can tell me that. Thank you. Sarvesh, the short answer to your first question is that, yes, there are no opportunities in solar that we have been able to look which fit into the model. Otherwise, you can rest assured that, you know, we would have announced something, right? That's the short answer. In terms of the refinancing, it's there on the Slide 10. We refinanced this particular large chunk at sub 70%, so it's brought down our average borrowing cost almost 25 basis points. We did that preemptively ahead of the hardening of the rates. Like to like, I think a year back, this particular financing would have cost us upwards of 7.5. We've been about 50 basis, 50 - 60 basis lower this year. We did this proactively to the extent we could, where it made commercial sense, so we preemptively borrowed at attractive rates and refinanced it. There's been a significant benefit on the refinancing because of the assets or the loans which are coming off. They're coming off a very high water mark of 9%, and that's what led to the lowering of the average book by almost 25 basis points. Going ahead, there are a couple of refinancings which are coming up, not a large chunk now. I think over the next one year there will be about INR 550-INR 600 crores of refinancing. So these are also coming off a high water mark of almost 8.5, 8.60%. We are already in discussion in terms of proactively sort of refinancing these at the right time. We do expect despite the hardening cycle there to be a net value accretion to the bottom line because the refinancing rates will be lower than the regular EPC liabilities are coming off. Understood. Thank you and all the best for the coming quarters. Thank you. The next question is from the line of K.U. Rashid from PNB MetLife. Please go ahead. Yeah. Thank you for this opportunity. I just had a quick follow-up question on NER. The deemed availability certificate application that you mentioned, so that is a protection for the revenue loss or capital or both? I would assume that we'd be incurring some capital cost also for the restoration. If you could throw some light on that. Yeah, good question. Maybe I can address it and, Satish, you can chip in. There are two impacts. Let me capture it for you. There are two impacts. One is, of course, there's an availability loss because this is a tower collapse, and that you get protection under the force majeure clause through the deemed availability. Obviously there is a cost of restoration as well. We anticipate, and let's see what the final design and engineering solution to the permanent restoration comes in. We do anticipate anywhere between, let's say, INR 8 crore-INR 12 crore under restoration between now and September-October. Our entire system is fully insured including NER, and this we get recovered through the insurance. That's how we get protection in terms of the capital cost of restoration as well as the availability through the force majeure deemed availability route. K.U., do you want to add anything? Understood. We have protection, let's say, on both the revenue. Yeah. Yeah. That will be recovered. Yeah. Just one more question. I think Meghana mentioned about one of the projects which has achieved COD in December 2021, that we might potentially acquire. Can you give us a broad range in terms of the size of the transaction? Meghana, you want to- I mean, the asset is under due diligence, but from a lease perspective will be somewhere about, let's say, INR 1,200 crore-INR 1,500 crore is what I can mention at this point in time. Understood. Sure. Yeah. Thanks. Thank you. The next question is from the line of Rashesh Shah from Edelweiss Tokio Life Insurance. Please go ahead. Hi. Congratulations on a good quarter. One question I had is in terms of eventually all these contracts that we have, the BOOM contracts, the revenues taper down. How are we planning to maintain the DPU? Like, what kind of leverage are we targeting at the final end? Are we ever going to take it up to 70%, or how does that work? How are we planning to maintain the DPU over time? Yeah. Very good question, Rashesh. First, in terms of our DPU strategy, we do have a plan in place to ensure that the DPU trajectory, we have a visible sort of runway for five to seven years at a minimum, including the potential accretions to DPU that we've been doing over the last four to five years. Based on the current transmission revenue trajectory, by the way, it's not necessary that it's a linear decline. I mean, sometimes it goes up for a few years, then comes down. It's a sort of flattish trajectory at least over the next seven to eight years, and then there's some decline. Based on the current portfolio, we do have a runway up to seven to eight years easily to be able to manage the DPU expectation. That becomes the reason why any growth in the AUM has to be DPU accretive, because the idea behind growth is not for the sake of growth. It's to sort of extend, keep on extending this DPU trajectory so that the runway continues to remain seven, eight years, right, on a rolling basis. That's the, you know, logic behind ensuring that acquisitions are DPU accretive. Yeah. Your other question, if you can just repeat that, Rashesh. No, sir. That was my first piece. Like, it's more around the how, like the acquisitions, right? In terms of, we've for a while now, broadly. Do we intend to ever go to 65%-70% or- Yes. Yes. 70 is a theoretical sort of, you know, it's a regulatory cap, and we don't want to go to, like, that kind of a level. I think, you know, once we hit, let's say somewhere around 62%-63%, we would be looking to sort of create headroom for further growth through an equity raise. There is some headroom right now. We are at 57%-58%. But yes, you know, internally, we don't want to be at a zone where we don't have a, an equity plan, and we are above 65%. We start thinking about it, let's say 60%-61%, make sure that somewhere around 62%-65% we do have a concrete plan in place. The idea is to sort of not be above 65%, you know, at any point of time. Correct. Another question that I had was around the National Monetization Pipeline. From what I understand, the government has now kind of encouraged against transfer of full transmission assets or, you know, assets directly to private or, you know, non-government counterparties, and it's more of revenue transfer that they're looking at under the National Monetization Pipeline. Is my understanding correct? And like, is that what we'll be bidding for? That is the, we discussed this a little bit earlier, but that is the idea or the intent of the government. While some other infrastructure classes are more amenable to that kind of a construct, power is a bit difficult. You know, they're looking at how they can achieve the monetization in a way whereby they can, you know, live within the regulatory framework. At the same time, you know, have the asset coming back at the end of the, you know, transmission, you know, license period, right? We don't have full visibility around what the final outcome will be, but they're working on finding a path where the assets are made available to private participants. There's a mechanism whereby the asset comes back or is available to the government at the end of the concession period. We will wait and see what construct comes, because in power, if you have a concession devoid of the asset, then that just doesn't really work from a regulatory construct. There are other complications with GST, et cetera. It's taking a little bit long to stitch it together. They're working very proactively, and we are hopeful that we should see some transmission-related monetizations in this financial year. Oh, perfect. Thank you. Thank you. The next question is from the line of Ankit Patel from L&T Mutual Fund. Please go ahead. Hello? Am I audible? Yes, Ankit Patel. Please go ahead. You're on. Yeah. Hi. Thanks. Thank you. My question was around the last quarter there was a discussion of certain under construction you know projects also being looked at in a strategic way. Just wanted to understand what is the thought process. Does it remain the same? Also if an update is there on the KTL asset. Yeah. Ankit, I presume when you say KTL, you're talking about the Khargone transmission asset, which we had bid and won. Yes. Great. That is the under construction asset that we had bid and won last calendar. It's a small, around INR 200 crore asset in Osmanabad in Maharashtra, and it's sort of a very simple terrain, a smallish 35 acre-40 acre, no forest approvals, you know, plain terrain. We've been able to progress well on that particular asset. We've got the regulatory approvals. We've bought the land. We've also sort of awarded the EPC to KEC. We do expect the asset to be up and running middle of the next year. We are doing well in terms of our initiative in that direction. The idea behind doing this is that we do have a 10% regulatory headroom to do under construction, but then we are very mindful of the under construction related challenges, infrastructure developmental risks. Use this sort of easy project to build scale capabilities, to be very proactively, you know, looking at the feedback loop and learn from this and decide whether we want to do more of such projects at the margins from an AUM growth point of view. So far the feedback is very, very encouraging. We managed to acquire the land using the administration in a short time. KEC is a marquee, you know, contractor, so and things are looking pretty much on track. We will obviously evaluate, continue to evaluate this and then update the broader market and the investors in terms of the next step, if there is any feedback loop which enables us to do more of such projects in the future. Right now we want to stick to it. It's early days still. If the land is there, we look to start the construction. But it's been an encouraging progress as far as the first under construction project is concerned. Okay. Thank you. I think, then this would still be less than 1% of AUM, but would you have any targets or set any targets in terms of what kind of percentage you would like to go to? Look, I mean, there is a regulatory cap of 10%, Ankit, and you know, so it's not that we can do beyond 10% based on- Within that 10%, yeah. No, I'll answer your question. Based on how confident we feel and based on the asset opportunity which are there specific to our stable distribution, you know, predictable platform strategy, we'll look at, you know, how do we play this. We are also cognizant that another way to play this could be more Framework route, right? Where we sort of taking the whole asset space from day zero, we enter into a credible partnership with an EPC player, with some skin in the game if required, some equity skin in the game, and take over the asset once the asset is ready. Sort of de-risk ourselves from the project risk part of it. There are multiple, you know, models here. Right now I wanna tell the investors that this is the only project that we're doing and, you know, there's some time to go before we feel that there's enough feedback from this initiative to us for us to sort of take a, you know, firm decision forward. We'll obviously be updating the market as and when there is any development in this respect, yeah. Okay. Thank you. That's from my side. Thank you. The next question is on the line of Sarvesh from Maximal Capital. Please go ahead. Hello? Hi. Hello. Am I audible? Yes, yes, you are audible. Okay. So I have just two questions. One is related to the NHAI impact that was there. Has that already been realized in this quarter, the recovered loans? The second was, can we assume that the NER availability will be around 94% for the next two quarters or so? I had another question around last quarter, you all spoke about, you know, speaking with SEBI regarding inclusion of InvITs in the index. Is there any update or any follow-through on that part? Yeah. On the RTCL and NER, maybe Divya, you can update on that, and Divya, you can update on the index inclusion efforts, please. Sure. For NHAI, yes, we have realized the loss of revenue completely. We've got an advance payment from them. On NER availability for quarter one, as I mentioned, we had a committee meeting and we are very confident of getting a court order. We will get 100% revenue for quarter one. For upcoming quarter, as we have already done our restoration through ERS, subject to the restoration, we will get the availability for the project. Yeah. The market will update that. Yeah. On the index inclusion, you know, the efforts are invested in with all the regulators including, you know, SEBI and the exchanges. We understand that they are considering it very seriously and we are hoping that it gets done in the coming quarters. Having said that, right now it doesn't mean it's gonna be done. That's not the case. We are working with the regulators to get index entries included in index very soon. Okay. You know, if I may ask, I mean, have they communicated any concerns around that to you as to what is the biggest, you know, so what's stopping them from having InvITs included? Not really, Sarvesh. It's not like any concern, but it's a process which involves two, three regulators, including the exchanges, SEBI plus, you know, largely the mutual funds, various funds also get impacted because of this. They are just figuring out if any of the, you know, specific debt or equity funds, how will it impact, per se. As such, not a specific concern per se, but it's a process and, it's being looked at. Okay, great. Thank you so much. Thank you. The next question is from the line of Swarnim Maheshwari from Edelweiss Securities. Please go ahead. Yeah, thanks. The first question is on Khargone. I believe Sterlite Power has commissioned the asset in January. It's been about more than six months. What's taking her so long to really acquire the asset? Is the due diligence still on? Yeah. I mean, yes, the due diligence process is currently underway. You know, while the COD was achieved, it is, as you know, COD also. Of course the COD from all the approvals and from revenue recognition, et cetera, getting inducted into the CoC per se, it takes some time. The process is underway per se, from a diligence perspective and we are moving, you know, at the right pace. When can we expect this? Next quarter, can we expect this in Q2? I think, Swarnim, forward-looking guidance, I don't think we are targeting that. Once, you know, definitive agreement with the seller is done, we will announce it. I mean, just to understand normally whenever the asset were constructed earlier also for the Framework asset, it normally hasn't taken, you know, this long. So just wanted to understand is there some issue? What is it exactly? No, I mean, there is no issue. Yeah, Meghana, I mean, let me address. There's no issue as such. As Meghana alluded to, you know, when the transfer happens, there are a few loose ends around, you know, revenues which are contingent on certain regulatory decisions, right? I think from a seller's point of view, you want to optimize valuation when you sell. If there is a line of sight which you will get, you know, 100% certainty on some revenue stream based on regulatory process, then you'd rather wait a little bit here and there. It's largely that, but the difference is fully on, and we don't want to sort of give a guidance because M&A gets tricky, right? If you ask me, Swarnim, I feel this financial year transaction is not the calendar year. We'll, of course, guide the market at the right time, when the developments are, you know, good enough to come with a formal disclosure. Correct. The second thing is on RAPP. In Q1, you know, we had a lower availability due to NHAI, and you had mentioned that everything is recovered from NHAI. Have we also recovered the incentive income from NHAI? Because, you know, if not for that, we would have also achieved the incentive income. Is that also taken care of? Maybe it could be a small item. Yeah, I mean, a very good question. Look, I mean, there is a small item, Divya can correct me, about INR 1.5 crore of non-recognition of revenue because of this. This is only a deferment because we have full availability for this particular asset. As the availability accrues towards the end of the year, then this is a protected revenue which we'll recognize, my guess, is sometime in the third quarter and the fourth quarter for sure. It is a small timing gap of recognition of revenue. I think it's 1.5 years, Divya can correct me. Beyond that, there is no real financial impact. Yeah. Understanding. Got it. Finally on this, you know, DigiGrid, we have rolled it out across all the assets. How is it performing, and have we been able to see some tangible benefits? If possible, if you can quantify, for this period and for the coming period, what would be the tangible benefits in terms of the cost savings or something from DigiGrid? Satish, you want to take a stab at it? Sure, yeah. Thanks for the question. Tangible benefits will certainly take some time because the platform has been just launched and implemented. What it enables us to, you know, improve the transparency on all the field operating activities that we do every day. Earlier we were heavily dependent on the people to capture all this in a manual mode, but now these are getting entered through all the, you know, iPads and tabs. It's coming, and it's consistent across the portfolio. That's the biggest advantage. With our partners coming in the system, the analytics will help us to make better informed decision in terms of prioritizing the high-risk defects, focusing on the right things on the portfolio, and that will drive the tangible benefits in terms of better productivity, retention of manpower and other resources. Give me a couple of quarters. I am sure we'll be able to quantify this and then present in this meeting. Got it, Satish. Sure. Yeah. Sunny, if I may just add, I mean, there are two aspects of DigiGrid. One is with what Satish mentioned. It does enable, you know, entire sort of new capabilities for, you know, preventive, predictive maintenance, and very good from a risk management point of view. It's also well integrated into the SAP's financial accounting system. In terms of some of the investments that we would have had to otherwise make in, let's say, you know, procurement, and other financial related, you know, capabilities, that is sort of obviated. The most important benefit of DigiGrid is that, you know, it helps us sort of beat the O&M increase on a year-on-year basis. You know, making it agnostic to people and some of the other aspects of inflationary, you know, elements of O&M. It is an investment which will reap benefits over a period of time. So far, you know, it seems to be stabilizing very well. It is also about culture and habit change, right? That was a concern that we had, but thankfully the team has really risen to the occasion and people are sort of taking it up quite well. Yeah. We're very happy with the decision and the benefits will, as Satish said, come through over a period of time. What is the cost of this rollout, by the way? I mean, is it a big cost? If you can just tell us what is the cost of this rollout? Divya, you want to address that? Yes. It's kind of an annual fee model. We spend around INR 2 crore a year in that range. Okay. Complete range. Okay. Annual fee. Fair enough. I think all my questions are answered. Just one last nitpicking question. What was the incentive income in this quarter? Divya? Yeah. It is around INR 5 crores. 5. How much again? INR 5 crore. INR 5 crore. Okay. Because, I think, on a quarterly basis, we used to kind of book about INR 10-11 crore. This quarter is substantially. Is it to do with NER? Yes. We did not book any incentive in NER timing. Okay. Okay. It was INR 5.9 crores. That's around INR 6 crores. Sorry. Yeah. Okay. Got it. Thanks. That's it from my side. Thank you so much, and wish you all the best. Thank you. Ladies and gentlemen, this was the last question for today. I now hand the conference over to the management for their closing comments. Thank you, everybody, for being on the call and for your questions, and your support and trust in IndiGrid. We look forward to your continued support and wish you happy health. Stay safe. Thank you.