Ladies and gentlemen, good day, and welcome to the India Grid Trust Q3 FY23 earnings call hosted by Axis Capital 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 and then zero on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jiten Rushi from Axis Capital. Thank you, and over to you, sir. Yeah. Thank you, Inba. Good evening, ladies and gentlemen. On behalf of Axis Capital, I'm pleased to welcome you all for the India Grid Trust Q3 FY 2023 earnings conference call. We have with us the management team of India Grid Trust, which has been represented by Mr. Harsh Shah, CEO and Whole-time Director. Ms. Divya Bedi Verma, CFO. Ms. Meghana Pandit, CIO. Mr. Satish Talmale, COO. We thank their management for giving us this opportunity. We shall begin with the opening remarks from the management, followed by Q&A session. I would like to now hand over the call to the management for opening remarks. Thank you, and over to you, sir. Hi. Yeah. Hi, good evening, everyone, and thank you for joining the call today. Thank you Axis team to host us. To start with, as we have come, I would like to reiterate our vision on slide number three. You know what we have, we have set out to become the most admired grid vehicle in Asia. I think all the actions, decisions that we have taken is to keeping in mind to achieve this vision. We believe our strategy of focused business model, value accretive growth, predictable distribution, and optimal cap structure has contributed significantly on this vision over the last five years. We continue to strive to live up to that. Coming to the quarter, slide five, where I'll have a quarterly update regarding the highlights of the quarter. In this quarter particularly, it was an action-heavy quarter with two, three acquisitions of different types getting signed. At one point, we had signed around INR 1,500 crores of acquisition of APL from Sterlite Power, which is part of framework asset. On the other side, we have signed a framework agreement with GR Infra Limited for around INR 5,000 crores of assets. They will look to bid and eventually monetize the assets within the grid. Sorry to interrupt. Mr. Shah, we're unable to hear you very clearly. If you can just switch to handset mode and speak, probably we'll be able to hear you. Sure. Okay. Okay. Sorry, is that better? Yes, sir. Thank you very much. Great. The G R Infra one where I was talking about, we did a INR 5,000 crore, but they will bid for certain assets together. We also signed a bit, I would say term sheet and framework agreement for specific asset class and transition with G R Infraprojects. In the same quarter, we concluded the acquisition of Rajashree Solar Power Transmission Company Limited from three developers. We see this quarter as a very successful quarter with respect to the business acquisition. On the other side, on the financial performance, we have continued our robust performance where our net revenue both grew by 6% year-on-year. Collections have remained at 100% this quarter. DPU increase versus last year versus this year we are at a 3.5% growth, which we are confident to deliver this year and will pay the 3.0 DPU this quarter. Net debt for you remains at 58%. This is pre-acquisition of APL, but significantly below the 70% leverage cap as per SEBI, which provides us ability to grow debt-wise. On the operating performance side, our average availability remained at 8.76, which is what provides us maximum incentives. Close to achieve 2 million Safe Man-Hours achieved and still going on. On the BI platform which we have developed, which is utilizing the earlier digital investments, that is yielding a lot of results in terms of ability to optimize the cost and I would say, use even own technology to ensure that our long-term O&M cost remains lower. That's just three highlights of the performance. On the next slide number six is about the industry update. In general, the power sector remains strong, and it is one of the good high-frequency indicator of economic activity. In general, the demand growth has increased and it's continued to increase. To be honest, demand growth has surpassed the economy and what historically, you know, people have predicted. We do feel confident that the demand growth in India on electricity side will continue to grow on account of variety of short-term and long-term measures. Short-term may be linked to the economic activity. The longer run, like, electrification of transport, might add a substantially big boost in years to come. On the transmission side, again, we recently released a report which showcases about INR 250,000 crores of CapEx required to modernize and set up the country for 500 gigawatt of RE capacity and achieving energy transition. All in all, I would say that in general, the transmission network in IndiaWe are, we believe that we're going to expand substantially, on account of the general load growth, second India's efforts towards energy transition. We believe that there is gonna be substantial amount of CapEx, and we will have a reasonable amount of business out of that. With that outlook on quarter in the year, I would hand over the mic to my colleague, Satish Talmale, who is Chief Operating Officer, to take you through the operating performance for the quarter. Thank you, Harsh. Hi, everyone. Good afternoon. Happy to share part of the operational performance for IndiGrid portfolio of the assets. So again, we focused our objective on zero harm on EHS perspective. For the quarter, we had no major incident, no fatality, zero LTI, zero MTC, medical treatment cases, and zero first aid cases. As Harsh mentioned, we are really proud to achieve two mile safe maneuver milestone, and we will strive to continue that performance every quarter. On transmission availability performance, we have achieved portfolio-wide 99.76% availability. Typically, quarter three and quarter four are the quarters for performing all the annual shutdown activities. As you can see on the right-hand side, there are few assets where it is slightly below 99.76. That is attributable to the plant shutdown outages, which we have undertaken to improve the reliability of the asset. Majority of assets are on the track to achieve 99.75% target availability. On reliability, this quarter was one of the record quarters for us in IndiGrid history. We achieved 0.08 trips per line, which is, I think, best in industry at a peer comparison level. This is all due to all the hard work which ground teams are putting to make sure the assets are reliable and there are no defects in the system. Our digital asset management, as we updated previous quarter, all the assets on the portfolio are operating via IndiGrid platform. Now we are working on advanced analytics, which will help us to make better fact-based decisions to improve the performance on reliability, safety, as well as on the cost optimization. Happy to share that we completed our two solarization projects at Gondia and Dhule substations. Idea was to achieve net zero auxiliary power consumption via renewable energy sources, that we achieve our net zero objectives, which is part of our ESG framework. As far as ESG framework is concerned, biodiversity is a major initiative which we have undertaken, already action planning study has been initiated for all the critical portfolio assets. On the left-hand side chart, the focus on training continued in the quarter. As I said, there were no lost time incidents in the quarter. Unsafe condition reporting, there is a focus so that there is a culture to report all the unsafe conditions at sites. Near miss is something which helps us to prevent any future accidents, so that is also being continuously reported. Our solar utility, 100 MW power plant, has generated 46.32 million units for the quarter with a performance of 21.97% CUF with availability of 99.41%. This is one of the best performing plants in the entire solar park. We are trying to achieve our consistent track record to maintain superior availability. With that, I will hand over to Divya. Thank you, Satish. Greetings once again, everyone. We are on slide number eight. Good quarter with a stable performance. As compared to the previous quarter, previous year, we have clocked the revenue of 590 crores with a 4% growth, EBITDA at 536 crores. NDCF generated for the quarter is 294 crores. We are, as per our guidance, committed, and our board have approved the distribution of 3 rupees 30 paise a unit. Collections for the quarter were good at 100%. We collected 100% of the revenue. Although for the previous year, similar quarter, the collection percentage was at 103%, but collections have improved over previous quarter. In quarter two, we were at 96% of the collection. DSO days stands at 63 days, as on December 2022. That's month-on-month collection efficiency. For October, November, December, we have seen a good progress with a 200% collection for the quarter. Coming on the next slide, number nine. DPU is INR 3.30. It would be distributed in form of interest and capital repayment. Interest is INR 2.80, and capital repayment is approximately INR 0.50. Outstanding units as end of the quarter is around INR 70 crores, and the gross distribution to all the unitholders at INR 3.30 is coming to INR 231 crores. Record date for the distribution is 31st January, and tentative date by which the unitholder will receive the distribution is 9th of February. NAV as on December, so that's INR 133. For this quarter distribution, IndiGrid would have distributed INR 68.41 per unit, with a total distribution of around INR 3,646 crore distribution. On the right-hand side, we showcase the trend of distribution year-on-year basis, which is stable and scalable growth of 8%-4% year-on-year basis. We are on track to meet this year annual guidance of INR 13.20 per unit. Moving on the next slide, ten. I will showcase a waterfall from our EBITDA to the NCF generation. At an SPV level, we have a consolidated EBITDA of INR 530 crore. Net of the finance cost, working capital movements, CapEx, tax and SFE. NCF generated at SPV comes to around INR 543 crore. We net off the trust level expenses, interest cost and tax. We have generated NCF of INR 294 crores, which is well above our guidance requirement, which we'll be distributing INR 231 crores. This quarter again we are replenishing reserves. This gives us an upside of INR 63 crores of reserve. With this, the total reserve end of the quarter three at a consolidated trust level is around INR 217 crores. That's all. I hand over to Megha to take the subsequent slides. Thank you. Good evening, everyone. I'm on slide number eleven, giving a snapshot of the balance sheet, as on 31st of December. We remain AAA-rated by the 3 rating agencies, and our average cost of debt portfolio continues to be at around 7.5%. We ended the quarter with a cash balance of about INR 1,039 crores, which includes the distribution for this quarter and decimal and balance cash. The mix between the fixed rate borrowings and rate borrowings across the total gross borrowing of INR 13,000 odd crores, continues to be tilted towards the fixed rates of more than three-fourths of the book. Net debt to AUM as on 31st December continues to be at around 58%, leaving a significant headroom for acquisition. Interest coverage ratio remains at a healthy over 2.2x. The incremental cost of debt in line with the interest rate cycle in the market has for this quarter was slightly higher at around 7.8% for the 3rd quarter. The pie chart on the right-hand side provides a mix of the sources of borrowing which today stands on the bank loans side about 60 odd%, NCDs about 40%. NCDs being subscribed by various investors or pension funds, corporate, retail, HNI, insurance companies, and the banks also between private banks and PSU banks. The bottom chart provides the repayment refinancing schedule of the loan book over the next 10- 15 years. As you can see that, broadly, not more than 10%-12% of the overall loan book comes up for repayment, slash refinancing in a particular year. Ensuring that we have not, we are not going with a bunched up of any big maturity coming up in a single year. Moving on to slide number twelve. On the total returns chart, as on 31st of December, we continue to provide superior risk-adjusted returns. Annualized returns being about 14% and total return of 105. Breakup of the total returns between dividend and price change of 65% and 40%. This doesn't include the 3rd quarter distribution. A gain, beta continued to remain very close to zero, and both on the debt side as well as on the equity side, we have continued to outperform peers in the disk and infra stocks. Just to spend a couple of minutes on the next slide number thirteen on the framework agreement with G R Infraprojects Limited. This is an agreement to acquire Rajgarh Transmission Limited with G R Infraprojects Limited. This is an inter-state transmission, tariff-based, competitively bid transmission project. This deals with king for the establishment of Pachora HC-HFL and a substation of 400 transmission line as well. The scheduled COD for this project is expected to be by December 2023. It again is on a BOOM basis, awarded on a BOOM basis. Payment will be under the interstate transmission, POC mechanism by CTU. The levelized tariff for this project is about INR 41 crore, with a PSA tenure of 35 years. IndiGrid will be acquiring this project on its COD in the third quarter of next fiscal. In addition to this, we have also signed an MOU with G R Infraprojects to jointly build up to INR 5,000 crore of various transmission projects which are coming up. This is a jointly, bid, identified transmission project. Idea is, both GR as well as IndiGrid will be working jointly on this bid, and IGT will be acquiring these projects from G R Infraprojects. Going to slide number fourteen. This is, we signed a binding share purchase agreement with Sunlight Power, for acquisition of Khargone Transmission project. This is one of the framework assets, that we are acquiring. This constitutes of two generating elements. Again, an industry transmission project, part of the POC mechanism with CTU and BOOM project with 45 years. The balance re-life remaining for this project is about 32 years. This has become operational and remit and reaching since December 2021. The levelized capacity being about INR 15 crore odd. Size of the project from an acquisition perspective is close to about INR 1,500 crores. Likely to expect, likely to add about INR 85 odd crores to the net distributable cash flow for IndiGrid on a yearly basis. With the acquisition of this project, the AUM for IndiGrid will increase to about INR 22,700 odd crores and completely fits in the IndiGrid strategy of acquiring value accretive assets. Unique feature about this asset again is there is an existing synergy with one of our existing 765 kV networks in Bhopal relay transmission project. One transmission just terminate in the Bhilai substation, by which we are able to optimize on the operations and maintenance for Khargone Transmission post its acquisition. I will just request Harsh to take the next couple of slides on the business outlook over the next few quarters, please. Thanks, Mitra. Going on slide number fifteen. we have tried to capture a historical track record and what might happen in future. I think, some of you might have been investors since IPO or even have been present around that. We had showed this chart with patterns 5 years ago to showcase how the DPU chart would look like if there were only IPO assets, which is IPO assets as mentioned above. Then there was a set of assets which we targeted to acquire, which is in the dark blue acquisitions number one. We acquired other two big asset acquisitions made in 2019, which was ANIC, OGPK and RSS that is in green. Subsequently, we have been continuously doing that. Now, what this chart showcased is that the way InvIT and the yield can actually deliver predictability and predictable growth is by acquiring assets consistently at the right size and right growth, which would enable us to not only streamline our DPU predictability, but also increase it over a period of time. That's why this chart is showcased, because it is to showcase if you look at from FY23 and behind, it is the value accretive growth that has panned out, and year-on-year we've increased by 3%-4%. As we stand today in FY23, we not only have headroom to maintain what we are distributing for a long time, but also ability to grow by, you know, acquisitions as well as the acquisitions which we have done till now. Going on slide sixteen is the business outlook for us for the rest of the year in a few months. On the portfolio strategy, I think we would remain to continue to maintain our assets well and ensure that, you know, what we have committed and promised, it's delivered as a sustainable distribution to our investors. This year we would look to deliver the DPU guidance of INR 30.2, 9 months of which we already done. We continue to acquire assets. We have, you know, in all acquired about or signed to acquire about INR 2,000 crore over last quarter. The future outlay that we see in the transmission sector about INR 2.5 lakh crore is a sizable opportunity. In addition, as and when these three assets become monetizable, we believe that's going to be a large scale expansion as well. We are also practically looking for other power transmission bids as well as adjacent places like utility-scale battery storage that do provide sustainable cash flows. On balance sheet side, I think as we mentioned before, we like to remain in the mean, and when interest rates are falling too fast, we didn't fall too fast, and when interest rates were rising too much, our cost of debt at a portfolio average level, it's going to pretty much remain lesser than the growth that has taken place in the interest rate. We try to remain in the mean and to ensure that there is less variability in terms of our interest rate cost, and we can provide predictable distribution. On the asset management side, we continue to maintain maximum availability in our incentives. In a lot of our portfolio, we have done self-reliant O&M practices, which pretty much means that there is no contract, no MC. Our own team members at IndiGrid are maintaining those assets. In addition too, we are looking at more business intelligence platform which will further allow us to optimize the cost and increase reliability. We commit to and try to maintain the world-class EHS and ESG practices across our portfolio. On the next point, while many of them are linked, especially the first two, is with respect to certain amendments and the tax anomalies that we are seeing between IndiGrid taxation and others. I think it's, let's hope what the budget shows. If this is something which we do believe that will result into more liquidity and better liquidity for investors and InvITs and therefore attract more investors. I think that's where we kind of end the short presentation for the quarter. We can please open for question answer. 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 enter star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Any participant who has a question may enter star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Mohit Kumar from DAM Capital. Please go ahead. Hi. Good evening, sir. First question is on these framework agreement. Have you identified the projects, and are these projects going to get out in the next 3 months, or is it a very longer term in nature? Yes, we have identified the projects. There are specific projects that we are working on. I think the bid timelines are too specific, but they are the ones which are already announced by the AP. It'll be of one of those projects. Mm-hmm. Sir, what is the leverage post all these transactions, all the acquisitions, especially once you finish the, you know, KTL? How much extra limit you have to, you know, to borrow and acquire the assets? How will you raise the capital after 2024, yeah? Mohit, I think that's a math I can run as at a guess, but I think if you add in our EUF and debt, INR 1,700 crore will be adding between, I'm sure this will give that number. Meghna, do you have the specific number handy which you can share? Yeah. Mohit, today we are at 58%, which is after Rachu. After acquiring Khargone Transmission, it will go to somewhere between 66, close to 61% odd. That's the identified asset. After that, post-acquisition, of course, we will add it both, depending on the size of the acquisition, it will get added to the debt as well as to the bottom line. Even after acquiring Khargone, as you can see, there is still significant headroom that is available to us. Sir, last question. What is holding up the monetization of the Power Grid asset? Is there any thinking to bid the assets out? Is there something you heard of? Yeah. I don't know about the hearsay part, but I think, see, whether Power Grid monetizes or not, those assets, which are with Power Grid is G R. I would say from an investment manager of an IPA perspective, I would say that any public asset monetization, sale of asset or concession should go through a competitive bidding process. That will be the right thing to do, because at the end of the day, the assets are built with taxpayers' money. It's important that a right, transparent bid process takes place for any monetization, be it Power Grid or others. I think that's our view is whether Power Grid decides to monetize or not. Obviously, it's a listed company with a separate board. It's a choice and decision. I would have a say even state monetization. If you look at the OFS guidelines- Mm-hmm. they are very, very clearly identifying that it should be an auction. I hope that states come up with that process very soon, because that's where most amount of capital is also needed. Right. Okay, sir. Thank you. Thank you for answering. Thank you. Thank you. Our next question is from the line of Rahul Marathe from ICICI Prudential Pension Funds. Please go ahead. Thank you, sir. Thank you for sharing. If you would like to take me through this MOU that you have signed with G R Infra. Just wanted to get some clarity, like, are there any kind of greenfield risks that we would be exposing ourselves to in this joint bidding? Yeah. Thanks. I think I would say that the 2 MOU is more like an alignment, right? There are different projects under that. I would say that in the framework that we have signed for asset transmission, we are not taking any, we're not taking any greenfield risk. Projects where we may have synergies with, like, let's say an expansion or a, you know, connecting with our own substation or a small line, we don't mind taking that risk. We've already taken it in Kallam and that's going well. It is, both parties will need to agree to a particular project and what is, you know, at the end of the day, what is the maximum value that both parties bring to table. That's what one evaluates to win in a competitive process. As such, MOU allows us to talk freely and, you know, develop, explore different options. One of the options can be that in a project where IndiGrid feels there is more synergy and more value for IndiGrid, we might take under construction risk as well. What would be the total exposure of this kind of risk in our total AE? Like, you would have some risk management on that framework. I would say, look, we might have management risk management framework, but that's not public and we can't reveal. There is a clear guideline of SEBI that we will never be more than 10%. That is like a law for us, right. Not me, and we would not like to be even closer to that number. What exactly we do, within which percentage is more of risk management framework and management level. Okay. Yeah. Thank you. Thanks. Thank you. Our next question is from the line of Pratik Kothari from Unique Asset Management. Please go ahead. Hi, good evening. Congratulations for 2 potential acquisitions after a long time. I really appreciate you sharing the indicative DPU chart. First question regarding this MoU again. This seems to be a very interesting opportunity for us. I mean, we are the better to move forward. If you could just highlight any risk that we need to be aware of while getting to that agreement, that would be helpful. The MoU itself doesn't pose any risk, right? As I said, MoU is a memorandum of understanding, so we are working with a common understanding for certain set of projects. That itself will never pose a risk. But as I said, we will look to do different type of arrangements for bids which are more strategic or politically critical. There may be an under-construction project which we undertake, but then it's fully decided by many other parameters. That risk on today is not there. We may take it, but that'll be considering if we are getting substantial synergies over there or not. In such MoUs, isn't it that, say in this case, G R Infra would be the developer it in one cycle, then IndiGrid next month? What is this under-construction risk for me? Okay. One is described as a framework type of assets which we have done before, and that's what we are doing for that. When I say under-construction risk, for example, right now we have taken Kallam Transmission as a 100% under construction with IndiGrid, right? While it's going well, there are projects in which we might have synergies and the risks which are not suitable for IndiGrid. We might partner with somebody, and that could be with GR for one of the projects, right? It, it depends on where IndiGrid can add value. In those projects we might take under-construction risks, so as to say that we might bid for it. Mm. Fair. Fine. Just one small clarification. You've mentioned this term levelized tariff. Tariff of a particular project. Explain what does that mean? Any bid document have a number which gets compared that whomsoever is the lowest number will be declared a winner, and that number becomes public. The levelized tariff is that number. We quote for 35 numbers in the model in the bid. To compare with one number, the bid process coordinator may use a discount rate. It can be 10%, 12% different depending on what they have explicitly stated in the bid. This discount rate called the levelized tariff. When they announce that this bidder has won this project with this levelized tariff, and there's a public announcement. That is the number that this levelized tariff is referring to. Is it there on our side to compare what you're paying for this asset versus the levelized tariff for that underlying asset? Not for CapEx, yeah. One, there are two anomalies in that. The levelized tariff will change depending on what bid processor coordinator keeps the discount rate, right, which can be substantially different than the other. The mathematics may not play out very well. Second is, we don't pay for CapEx. We pay for acquisition value. Again, most of our assets have a tariff publicly available. You can use a particular discount rate and then compare that to the cost of acquisition that we are paying. Not CapEx, cost of acquisition. All right. Thank you. I understand. Thank you. Thank you. Our next question is from the line of Chandramouli M, an individual investor. Please go ahead. Sir, the INR 0.50 per unit which you are distributing as a capital repayment, is it a tax-free to the unitholder? Sorry, I could not hear you. Your line was not clear. Chandramouli, you're on a speakerphone. Can you switch to handset and talk, please? Hello, can you hear me? You can ask your question. You'll have to repeat your question. Hello? Is the INR 0.50 per unit which you are distributing this quarter as a capital repayment, is it tax-free to the unitholder? Okay. you know, there is a disclosure on one of our old on the website that changes. For any tax treatment, I think it is best to refer to that because taxes, you know, is not our area of expertise at how individuals will get taxed. We have taken a lot of advice and then the tax treatment, potential tax treatments. I think best is to refer to that to check the tax treatment of that. Okay. We can tell you we are not going to do anything on that because we are not required to. That's the view from the company. Okay. Hello. The next one is, you had mentioned that the new acquisition will add about INR 85 crores of NDCF from the coming years. If my understanding is correct, the NDCF will go up by another 8%-9% from the current level. Is it fair to assume that the distribution per unit will also increase in that way next year? Yeah. Hello, sir. Yes, please. Yeah. You had mentioned that the new acquisition will add about INR 85 crores of NDCF. Which means the NDCF will go up by another 8%-9% from the current level. Can we expect the same kind of incremental, I mean, distribution the coming years? I think the reason why we showcased that chart before was exactly that what can be done. However, whether, you know, the distribution is increased or not, we have historically taken a decision in the quarter four board meeting for the next annual year. We'll be able to guide on that only in the next quarter. However, if you look at last five years track record, we have consistently done it. We apply two parameters. One parameter is that when we increase distribution, we want to increase it in a way that at least for next five, six years, even if we don't acquire anything, our distribution still remains at that level, right? That is very important for our business model because we may not acquire assets in some years. We may not acquire assets every quarter. Our business should still provide the enough headway to provide distribution visibility to investors and us timing that when the market is right for acquisition, we acquire at the right price. We keep that flexibility there when we compare. Whenever there is an ability to increase distribution consistently, and it will remain stable for next five - six years, we look forward to increase that. That has been our strategy in that, historically we have done it. Whether it gets done this quarter or not, it, you know, it's the board's decision and we'll take it up in the next quarter meeting. Thank you, sir. That's all from me. Thank you. Thanks for the detail. Thank you. Before we take the next question, we'd like to remind participants, to ask a question, you may enter star and 1. Our next question is from the line of Vishal Doshi, an individual investor. Please go ahead. Sure. Thank you. I have a simple question. Presentation mentions the distribution per unit is% year-on-year, INR 1.19 quarter three FY 2022, so INR 3.30 quarter three FY 2023. If you see the breakdown of slide 9 of the presentation, it shows the distribution per unit INR 3.19 with a break-up of interest at INR 3.1137, dividend nil and capital repayment as INR 0.18. If you total to this INR 3.11 and INR 0.18, it comes to a total of INR 3.29 vis-a-vis INR 3.19. If you compare it with the payment of quarter three, which is INR 3.30, I think there is barely any year-on-year increase in the distribution per unit. Would you please clarify please on the same? Sorry. If I get your questions right, what you're saying is that because there is capital repayment, there is not enough increase. Is that what you're saying? Yes. That was my second question. My first question is that, is there any error in the reporting numbers? Like, if you see the distribution per unit is INR 3.19. Am I right? However, if you see the slide number nine, it shows that the interest has INR 3.11 and capital repayment has INR 0.18. If you total these two items, it becomes INR 3.29 rather than INR 3.19. No, no. I think first is that you're looking at quarter three FY22. You should have been looking at quarter three FY23. No. I'm comparing Q3 FY 2022 versus Q3 FY 2023. Suppose if my Q3 FY 2022 is not INR 3.19, if it is INR 3.29, if I compare it with INR 3.30, there is no 3.5% year-on-year increase in the distribution per unit. Sorry, sorry. The quarter three, you are saying quarter three FY22, 3.19, you're comparing with what number? Sorry. 3.3. quarter three FY 2023. Correct. 3.2 versus 3.3 is about 3.5% increase. Is that right? Yeah. That 3.2 is exactly 3.29. Is it possible for someone in the office to maybe open up the presentation and make and- No. Certainly. Certainly. No, Certainly. No, no. I can look at it. You're saying, because you're saying that 3.11 plus 0.1863. It should be 3.29. Understood. Understood. I can tell you that there seems to be an error here. INR 3.19 is sacrosanct because that's what we distributed as total. If you take. If you total these two items, then it is INR 3.29. I understand. I understand. That's why I'm saying there seems to be an error in FY 22 disclosure of 3.11 and 0.1863. Give us a minute. We have Divya with us. She'll just check in a second. Obviously you have correctly informed my second question. There is a rise in the capital repayment. I just wanted to understand, although we understand that there is some sort of an EMI schedule where the loan gets incurred, your interest component gets decreases. Although you are still maintaining the maybe same level of the distribution per unit, but in terms of the interest, just wanted to pick up your thoughts. Is there a possibility to have the higher interest income and maybe in a similar fashion, if you at the same time you want to have objective of maintaining the constant distribution per unit for next, maybe say three, four, five, six years as I've mentioned in the previous query? Good. As I've described that, in this there is direct conceptual inaccuracy. Point one, comparing the interest and principal versus an EMI is conceptually not a, I would say, correct assumption over here because 99% of our assets are permanent assets, right? The reason why the second is, normally this is not in our choice to decide what interest and principal. The income from InvIT, rather let's say income in the hands of InvIT are kept as a passthrough. With that, CBDT has required us to act the trust itself as a passthrough vehicle. Therefore, whatever form and manner the SPE can give up the cash, the InvIT, right, is the same manner in which InvIT needs to give it back to investors. Right? Now what happens? In some of the SPEs, let's say there is more EBITDA than the interest that you can charge, right? The residual EBITDA comes from SPV to InvIT in form of principal repayment. Therefore, the InvIT needs to also provide that as principal repayment to investors. Now, this is not a repayment of your capital. There's no face value over here. This is just the manner in which the money is being transferred to SPV to InvIT and InvIT to the investor, right? The whole reason to choose the trust as a vehicle was to provide this ability, because in companies, you cannot do this to give it to investors, right? You cannot take out the capital given over to owners of the business. That is the conceptual change. That's why you've chosen trust. One clarity that it is not in our hands. It depends on we have 14, 15 SPVs. Every SPV, the capital structure is different. Depending on that, they will give us some interest, some dividend, some principal. We just add it up with InvIT, make adjustments, and distribute. It's not in our ability to change that, right? That's one. Second is, conceptually, this is not really capital given asset value. Before the principal repayment was also the same. Today is also the same. It is just a mode in which the money is passed to the investor, because we have chosen trust as a platform, right? As a government has chosen trust as a legal entity. I think there is this is, first is we need to check this INR 3.1 billion plus debt. Certainly, we take that view. I think, you're right on that. We'll be discussing and get back on that. The second conceptually is that principal repayment is just a mode in which the money is passed on to unitholder, not a conceptual repayment of capital. Got it. Fair point. If I may allow maybe second question relating to the same thing. Should I go with the second question? Can I go with the second question, please? Yes. Okay. I also see that you have actually parked some INR 63 CR has not been, distribution and parking it reserve. The reserve balance has increased to INR 217 crores, thus, cumulative. I do understand that it could be for some future acquisitions or for some future planning or maybe payout or stability point of view. Yeah. When I, when I see the slide number fifteen. with respect to the same and see the chart, maybe you can just help us in understanding the same. FY 2024 and 2025 onwards, the DQU line is again here, 13.20. If you can maybe throw some light because you have the results of 217+ in the, as mentioned, as in the previous question, that you might have an extra EBITDA because of the acquisitions, right, to the tune of around INR 85 crore. How does that actually really pan out, which we are not able to see in the slide number fifteen. on pipeline or the framework for the distribution per unit? Okay. A very long analysis, but let me describe what I understood then when you say yes or no, and then I can answer. Sure. Sure. Sure. Sure. Sure. Your question is that you are earning X DPU today with a set of assets. If you increase, if you acquire these assets and earn Y DPU, which is higher than the X, and you might have to increase the DPU. In the slide number fifteen., there is a chart. According to them, there is FY 24 onwards, DPU is going up, it can go up. How does this tally with each other? Is that the question? Yeah. Just one missing point was that you have the surplus reserve of INR 217 crore which is yet to be distributed. Understood. Understood. Yep. All right. First question, let me answer on surplus, okay? Surplus has many uses. Surplus are used to stabilize, surplus are used to keep liquidity for acquisition. Surplus are used to, you know, fight against volatility sometimes. It's a variety of uses for the surplus that we have flexibility to use. We think that the surplus is extremely useful. We have seen that in two occasions, right? Rather many occasions for us. Let's say the first occasion is in the COVID first quarter, right? While our business was doing fine, we were confident on our collection. For that one quarter one of FY21, okay, there was a dip in collection because nobody went to office, right? What do you do? We could dip into our reserves and pay from that. In quarter two or three onwards, we recovered it, then there was no issue. It's an important tool for management to be able to provide predictability. That's one. It can be used in varieties. I would not include reserve in this analysis. Okay. What we do is in this analysis, now coming to slide number fifteen. we calculate that if we don't do anything and we just keep refinancing some of our liabilities and keep on operating the asset as is, with the number of assets that are in our hands, how does the DCF profile look for next five- ten years, right? Now, if you look at on FY23, where we have given 13.2, if we don't do anything, the red curve was continuing, right? If we don't acquire any assets also, 13.2 was fairly robust and, you know, ongoing, not an issue. We acquired, or rather, let's say, we signed to acquire right now is 3 assets, different point in time. At some point in time in FY 2024, 2025, there is gonna be sufficient incremental NDCF that might get generated, which we have to distribute to unitholder, right? When it happens, how much it happens, within the 10% criteria also, SEBI, we need to maintain that. It's a model that we run and we say, "Okay, if your NDCF is more than. Let's say 90% NDCF, you have to distribute. If we have sufficient cash that we have earned, sometimes we may have to increase DPU, right? It gets modeled every quarter post results, post cash and post NDCF. This is more for an indication, right, of how if somebody was to model our, you know, our entire tariff, which are published in valuation reports, someone might read similar analysis. Like, it's more a guideline. It's not an accurate prediction in which quarter and year the DPU will go up. Okay. Fair. Thanks for sharing that insights. Thank you. Congratulations once again. Thank you. Thank you. Our next question is from the line of Sunil Shah from Turtle Star. Please go ahead. Thank you for the opportunity. Welcome, Harsh. Always good to hear you, Meghnad, and everybody on the call. Thank you so much for this call and everything that you share. It's nice to have the slide fifteen. back in the presentation deck. Now, what I understand is slide fifteen. is indicating all the assets which are reasonably in place and which are more or less in the framework side as well, the lines of new three assets. The MOU which we are gonna sign off, those assets are completely gonna be future and is still not at all captured or initiated in the slide fifteen. Is my thinking clear on this? Yes. Your thinking is right, that's why we are not putting anything for which we have not signed agreements or a confirmed bid or things like that. This is Orange line is based on exactly the rights of Kallam and KTL. So. Yeah. That's completely visible to us, and so that's our focus. Okay. Right? Yeah. Okay. Yeah. Great. I guess all other questions have been asked by everybody else. They have asked everything. Thank you so much. We can move on to the next question. Thanks. Thank you. Our next question is from the line of Rajan Patharia, an individual investor. Please go ahead. Hello? Hello? Yeah, we can hear you. Um, first of all, congratulations. Uh, I am individual investor since many years. Uh, I would like to congratulate for your yield accretive, uh, acquisition. My question is, uh, the acquisition that we are going to do worth fifteen hundred crores for which, I mean, I have read the valuation report. Uh, we are acquiring at, uh, around eight point five percent, uh, ROI. And, uh, so what will be our cost of, uh, interest for that? Because, uh, if, if it, if there is a little increase in, uh, rate of interest, uh, it will not be that much yield accretive. Can you please, uh, some- Yes. Can you throw some light on this? Correct. I think it's a very important question and clarification. I'd like to answer this question. The 8.5% that you may be referring in the valuation report is WACC. That is not our rate of interest of the step which we are buying. What the valuation report does is calculates the WACC, takes the tax of 20% or 25%, whatever is applicable, and reduces the EBITDA of the project to come to the value. Therefore, the 8.5%, which is there as a WACC, becomes the cash flow after removing 20% tax from there. Whereas in reality, we don't pay 20% tax. If one was to calculate what is the rate of interest or the way you are trying to compare, you should just use discount rate to come to the FMV that is there without tax impact, and that number will be higher than 8.5% for FMV calculation. Coming to the interest side, I think, agree with your point. If I were to describe this, is it as a spread as a cost of debt versus at the rate at which we have discounted the cash flows? The spread between them is sizably higher the moment you look at it, from a EBITDA discount perspective. We will have a good amount of spread between our cost of debt and the rate of discounting at which we have purchased. I don't see it as an impact, coming on us substantially. Again, we are using the current cost of debt and capital, which is at a, I would say, I won't say peak, but at an elevated level of interest rates. Definitely not at bottom. Yeah. Yes. Definitely not at bottom. Correct. No. I think even at this rate, there is sufficient cushion, in terms of further variability which will be accretive on this acquisition. What will be our borrowing capacity left, after this acquisition? I think earlier somebody asked that question. There would be significant. I don't have the exact number, the one which is calculated. Anywhere from INR 2,000-3,000 crores is the record, so it's sizable amount. Thank you. Thank you. This was the last question for today. I now request the management team to add a few closing comments. Thank you. Thanks a lot for hosting us, and thanks all the investors who joined the call. We're really happy about the, you know, the questions that have come to us, very important one. I think I also recognized one of the questions which was about like errata in the DPU makeup for FY 2022. We'll correct that. Other than that, I think very important questions. We are glad that our investors understand our business so well. They understand the values by which we are living, the flexibility like, you know, keeping reserve with us and, you know, doing accretive acquisitions. All of it, that courage comes from the fact that our investors understand the business very well, and they do show confidence on, you know, how we are running the assets. Thank you. Look forward for the next call. Thank you. Ladies and gentlemen, on behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.