Ladies and gentlemen, good day, and welcome to IndiGrid Q1 FY 2025 conference call, hosted by Nuvama Institutional Equities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Subhadip Mitra. Thank you, and over to you, sir. Thank you. Good evening, friends. On behalf of Nuvama Institutional Equities, welcoming you all to the first quarter FY 25 results conference call of India Grid Trust. We are joined today by the top management of the company, represented by Mr. Harsh Shah, CEO and whole-time director, Mr. Naveen Sharma, Chief Financial Officer, Ms. Meghana Pandit, Chief Investment Officer, and Mr. Satish Talmale, Chief Operating Officer. I would now like to hand over the call to Harsh for his opening comments. Over to you. Thank you, and thank you, everyone, for joining the first call for financial year 2025. I will follow the slide numbers, and then refer and open the call, and I'll then subsequently have the management team talk about the business. I'm on slide number three. To reiterate, our vision is to become the most admired yield vehicle in Asia, focused on focusing on the business model, value-accretive growth, predictable distribution, and optimal capital structure. On slide number four, based on these four pillars, we have built a large portfolio which has been spread across India. Put together, INR 29,300 crore of AUM on 49 lines and 8,700 circuit km, 13 substations encompassing 22,500 MVA, more than 1 gigawatt peak capacity in solar and 400 MWh of battery storage projects that we recently won. Our portfolio is unique. The transmission assets offering perpetual contracts, on solar side, still having a residual life of around 19 years and sizable amount of lithium that we own in the portfolio. On slide number six, where I'll take you through the quarter 2024 and 2025 highlights. The first one, on the portfolio side, we have signed the battery energy storage purchase agreement for 180 MW, 360 MWh BESS project awarded by GUVNL in quarter four 2024. This is significant because this is going to, this signifies that the project is going to be built, and the customer is ready to support that, and the agreements are signed for it after the build. On the financial side, this is the quarter in which, we're seeing the full impact of acquisitions of VRET and, RSTCL, which we did last year, and therefore, on a quarter-on-quarter comparison, versus last year to this year, we've delivered a growth of 32.7% on revenue and 35.2% on EBITDA. On the AUM side, our AUM stands at INR 29,300 crore with a net debt to AUM at 61.3%, which leaves a sizable amount of headroom for us to grow. On the collection, we had a very good quarter. Typically, the quarter one is relatively weaker, but in transmission, we had 94% collection, and in solar, we have 104% collection, which has resulted into a sizable amount of NDCF for this quarter as well. On the DPU, we have distributed the first, three point seven five rupees a unit DPU, which was as per our guidance of fifteen rupees a unit for this financial year, which is almost 78% higher than the quarter one of last year. There is a significant amount of DPU growth that has been delivered for this year based on our acquisitions and growth for last year. On operating side, our average quarterly availability is at 99.4, and solar's CUF is maintained at 25.6%. On the next slide, I'll take you through Indian transmission sector opportunity landscape. We are very uniquely placed in the entire energy transition journey. Energy transition is absolutely critical and imperative for India, considering, one, the climate goals that the country has undertaken, and also energy security, which allows India to be energy independent if the energy transition is done rightly by [2030]. The goal of 500 GW, which the government has put in by 2030, is certainly steep, but on the path of that goal, there are significant amount of investment that is taking place in the areas in which we focus, which is solar, transmission lines, which will enable the next energy transition, and battery energy storage, which will ensure that renewable energy can be deployed in non-natural resource available hours. With that, as you see on the slide, there is a rapid increase in power demand that is... we are witnessing as a country, which the country is responding by putting in greater capacity addition... which will result in into sizable amount of investment opportunity for us for transmission networks as well. Also, on the renewable energy side, the battery energy storage becoming, reaching grid parity levels is really putting a lot of wind in the, in the wind, in the wings to ensure that more and more utilities are coming with battery and storage proposals, and we do see this as a significant part of our transmission growth. On the slide number 8, as you can look at it, based on the tailwinds that we're seeing in the sector, there is approximately INR 96,000 crore of transmission and subsector bid alone that we are witnessing over next year or two. And this is, to put things into perspective, is, I would say, one of the highest level of bidding activity that we have seen in last 10 years. To just put in context, in last 10 years, pretty much total project size that was bidded out was in the range of INR 100,000-INR 125,000 crore. So we are seeing that kind of activity coming to market in next couple of years, so that's a significant opportunity for players like us to find great opportunities. I would, I would just take a pause at the summary, and I will take you through, I'll take my team through the, quarterly performance. I will invite Satish, our Chief Operating Officer, to take you through our operating performance. Yeah. Thanks, Ash, and good afternoon, everyone. I'm on slide nine. I'm glad to share the operational performance for quarter one. So we had 0 incident quarter in terms of safety. And as we continue our path on zero harm objective which matters. On performance, we achieved 99.4% as overall portfolio level availability. As you can see on the right side of the chart, there are three assets which contribute this slight dip. I think two of which, like JKTPL and Parbati, those are commercially indemnified because of force majeure event and line diversion event, respectively. On ENICL, we had a conductor snap, and because of that, the availability is down, but I'm confident that over the year, we will get back to our target of 99.75%. On solar generation, we achieved 472.6 million unit, which is almost close to our plan, at a 25.6% CUF. On reliability, typically because of the change in climatic patterns, the natural events like lightning, thunderstorm increases, and this pattern we are seeing for last couple of years and it's changing. And because of that, the number of trips has little gone up high, but we will kind of match up to our annual target of 0.18 throughout the year. Substation-wise, I think it's pretty much lower compared to the benchmark that we have in the industry. On cybersecurity, I'd like to share that for all our solar assets, which was recently acquired, we completed certification process for cybersecurity risk mitigation measures. Okay. That's it from my side, and I would hand over to Mr. Naveen. Yeah. Thank you, Satish, and good evening, everyone. We are on slide number 10. Another strong quarter with consistent performance. We have recorded a revenue and EBITDA of INR 835 crores and INR 767 crores respectively, which translates into 33% and 35% YoY growth. NDCF generated for the quarter was INR 313 crores, and board has approved distribution of INR 3.75 per unit, which translates into DPU growth of 9% on YoY basis. Coming on to collections for the quarter, it stood at 94% and 104% respectively for transmission and solar business. For trailing twelve months, collection performance at entity level stood at more than 100%, with both business, business segment having similar collection performance. The DSO as of 30th June stood at 51 and 45 days respectively for transmission and solar business. This reflects substantial improvement in DSO in both the business segments on year-over-year basis. Coming on to next slide, number 11. DPU for the quarter is INR 3.75 per unit. It will be distributed in form of interest, dividend and capital repayment, which is INR 3.19, 0.21, and 0.35 respectively. The outstanding units at the end of the quarter is INR 78.37 crore, and the gross distribution to all the unit holders comes to INR 294 crore. Record date for the distribution is July 30th, and tentative date by which the unitholders will receive their distribution is August 8th. NAV as of June thirtieth stood at INR 143.998 per unit. During the quarter, as part of the standard process, the independent valuer reviewed comparative benchmarks for the valuation of transmission and solar business. To widen the index, they included PowerGrid InvIT in the group of companies used for benchmarking. Consequently, the beta was reduced, leading to a lower weighted average cost of capital and therefore a higher value of AUM. This has contributed to the increase in AUM and NAV during the quarter. For the quarter distribution, IndiGrid would have distributed INR 89.78 per unit, with a total distribution of around INR 5,240 crore.... On the right-hand side, we showcase the trend of distribution, year-on-year basis, which is stable and scalable growth of 6% over the years. We are on next slide, number 12. This showcase of waterfall from our EBITDA to the NDCF generation and distribution. At an SPV level, we have a consolidated EBITDA of INR 770 crores, net of the finance income, working capital movement, CapEx, and tax at SPV level. NDCF generated at SPV comes to INR 725 crores. The net of the trust level expenses, finance cost, DSRA, working capital movement, tax and debt repayment, we have generated NDCF of INR 313 crores. In Q1 FY 2025, we have added INR 19 crores to our reserve, and closing reserve stands at to be 483 crores, which is in excess of one quarter DPU, which is current guidance. So that's all from my side. I hand over to Meghana to take you through the next slides. Over to you, Meghana. Thanks, Naveen. Hi, good evening, everyone. I'm on slide number 13, which reflects the position on the balance sheet. We continue to remain AAA rated by all the three rating agencies. Our average cost of debt for the quarter ended was about 7.74%. The cash balance was at around INR 25.54 billion. Of this, almost INR 10 billion of debt was raised in June, and which was already utilized for debt repayment in July, which, because of which you are seeing slightly higher number on the cash balance. The fixed rate borrowings continue to be almost three-fourths of the borrowing book. The leverage ratio, reflected through net debt to AUM is about 61%, and a very healthy EBITDA to interest coverage of 2.03 times. The gross borrowing is about INR 203 billion, which is split 50/50 between NCDs and bank loans. Both sets of NCDs and bank loans are diversified through various investors, including mutual funds, insurance companies, PSU, plus private sector banks. At the bottom of the slide, you can see the repayment schedule, which again, we have ensured that there is no bunching up of maturities happening. In no single year is the refinancing going above 12%-13% of the gross borrowing, which is what we have been communicating all throughout. Overall, a well-diversified and turned out borrowing profile, which continues for the quarter as well. Going to slide 14, in terms of our total returns, reflected from the distribution, which is the dark blue part and the price change. So the total returns on an absolute basis clocked is about 125% since the time we got listed in 2017, as reflected in an annualized return of about 12%. Compared to all pure play debt instruments and pure play equity, if I look at the risk-adjusted total return, risk being reflected by beta, and IndiGrid beta being very close to 0.08, you can see that IndiGrid continues to outperform all the other indices, on a risk-adjusted basis. Coming to slide number 15, in terms of the business outlook, that we are looking at. From a portfolio strategy perspective, we continue to focus on ensuring that the operations remain stable, and we are able to provide for predictable and sustainable distribution, and at the same time, looking at value accretive acquisitions, which we have been doing. On the greenfield side, as you all know, we have 13 transmission projects, plus certain augmentation works in our existing projects, so a smooth execution on those projects continue to be our focus. In addition to that, the two battery energy storage projects, which also we have won in the last quarter, those remain on stream and in the right, we are looking to execute that. Finally, we are also exploring partnership opportunities for these greenfield projects to ensure how we will be able to minimize risk and at the same time achieve scale. Of course, participating in other greenfield bidding opportunities, which we have seen in terms of the tremendous transmission bids coming up, continues to be an area of focus, both on the debt side as well as transmission side. Also look at delivering DPU guidance of INR 15 for FY 2025. On the balance sheet side, like always, we will focus on ensuring that as and when there are refinancing opportunities or opportunities for acquisition, how we are able to optimize the interest cost and elongate tenure. And at the same time, consciously manage the leverage ratio to ensure that enough headroom is available for growth purposes. Asset management continues to be a very important area by ensuring we maintain 99.5% availability across the portfolio. Looking at self-reliant oriented practices, which we have imbibed across the portfolio, and continue to optimize on the digital tools, which will help us on analytics and decision making. EHS, ESG again, goes hand in hand with the asset management practices, and we are increasing our focus areas on this. Industry stewardship again remains an area of focus in terms of figuring out what more private sector participation can happen in the electricity sector, both on the greenfield side as well as on the national monetization pipeline. Parallelly, specifically for InvIT, how do we increase awareness and investor education again, remains an area of focus. Moving on to slide number 16. This basically showcases how on the back of value accretive acquisitions, which we have been doing- ... since the time we got listed, has enabled us to consistently increase the DPU and also increase the longevity of this DPU. So the various color graphs that you see reflect the acquisitions that we have done over the last 6-7 years. And on the back of these acquisitions, how we have increased the DPU, and you can see the the DPU longevity, how that has extended, on the back of these acquisitions and the Virescent DPU that we have provided for. I will take a pause here and leave the room open for Q&A now. Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ravichandra, an individual investor. Please go ahead. Yeah. Good morning, Mr. Harsh and the team. Congratulations for the excellent revenue, P&L, and DPU increase. In fact, I'm observing from 11.75, 12 rupees to 15 is a good achievement. Congrats. Also, I think the management team has purchased the units very recently in this quarter. It's actually excellent from the investors confidence we are getting a lot on this angle. But my question is, it's maybe a repetition in every reason. Now we have AUM of around INR 29,000 crore, so potential is very high, INR 96,000 crore in 2-3 years. So we have headroom only to go up to 40% of that. Right now we are at 16%. So if you have a huge asset in the bidding process, if you get, then immediately we may have to do something like, rights issue or something like that. Actually, how we can, work situation? And second point, recently, finance minister told that asset monetization need not be only a selling. I think it looks like that, last year we had a discussion that asset sale might not happen, asset lease might be there in the, pipeline. Is it true? Any thought on that? Thank you. Thank you. Thank you, Ravichandra. I think to answer your first question, you're right. If there is a significant size asset that we are looking to acquire, we may need further capital issue. However, that number is in the tune of INR 7,000 crore-INR 8,000 crore. So I think, we don't foresee any one acquisition of INR 8,000 crore in near future, which can really necessitate the need to raise capital. We are, looking at several growth opportunities, but none of that to the size of the tune of INR 8,000 crore, which is the capital at which we would need to look to, raise capital. Having said so, we have raised capital in the past via rights issue, preference issue, QIP, a variety of methods, and our unit holders like yourself, have been kind enough to support us in, different capital raise processes. So if at all, and I hope we do get opportunities of INR 8,000 crore and more, we would come back to market when we have to, and that will be a good scenario as we, as we go further. On your next question on, monetization, I think in general, government's monetization program has been on and off with mixed reactions from several quarter, and certainly on transmission side, it, it's been, I would say lukewarm, to say the best. And there are structural issues with respect to that. Having said so, if the government already has published a policy of monetizing transmission assets and lease bonding, we would be keen to participate on that. So as and when that takes place, we would really look forward to participate. However, the timing of it will remain in the hands of the government. Yeah. I can understand. Thank you. Let's, let's hope for the best to happen. Thank you. Thank you. Thank you. The next question is from the line of Pradyumna Choudhary from JM Financial. Please go ahead. Yeah, hi. Pardon if some of my questions are a bit basic. I'm a bit new to the company. So my first question is regarding the assets that you've been acquiring lately. So, you've been acquiring solar assets, and now we are embarking on greenfield BESS projects as well as transmission assets. So this is while we talk about a huge transmission opportunity. So, when do we see this transmission pipeline come on stream for us to be able to acquire some of the already operating transmission assets? ... Great! So I think there are, I would answer this in two parts. One, transmission projects typically have a life cycle, or rather the construction cycle of 24-36 months, and usually the monetization takes place 6-12 months after that. So it's like a 3-year cycle. So that's all the pipeline that gets bid out eventually, if it is to players and developers who wants to monetize, come to market about 3-3.5 years from the date of the bid. Having said so, as you can see in the outlook slide, which Meghana described, and also we have been acting on it, that we are bidding for transmission assets on our own, which means that we don't need to depend on the scale of transmission line because we control the quality, we control the returns, and we bid on the asset upfront. Having said so, we have limited capital that we can deploy on the under construction side, and therefore we are also exploring partnership opportunities at the development projects, which minimizes the risk at IndiGrid, because we are sharing the risk capital with other investors, and which enables to do much larger and more projects, right? So we would look to participate on transmission side, on greenfield, on our own, in terms of ensuring that we get the assets after completion. However, we are mindful of the fact that there is gonna be limited capital that we can deploy on development side. We would look to partner with developers who would partner with us at development stage and provide us risk capital, and after completing, we will buy those projects and add to our pipeline. So it depends on what is gonna be our success in the bidding and eventually execution. That will define how much in the pipeline, but in either of the cases, the pipeline that we are seeing today of around INR 100,000 crore takes, you know, bid to bid and it build and bid out around one year, one year and a half, and then subsequently around three years to monetize. So I would say it will start giving in sizable amount of results in anywhere from three to four years. Okay, so near term, at least in terms of transmission assets, getting into our operational portfolio would be a little on a slower side as well, right? Depends. We already have around INR 2,000 crore of assets that we are already building, right? That may come in next, actually, that will come in next 12 - 18 months to fruition, so we'll start generating EBITDA. Those projects we already won last year, right? So they will start generating in next one year and start hitting our NDCF line. And also there are projects which are bidded out earlier, which may come for monetization, but we don't control the time for it, right? And therefore it's difficult to guide. But we also already have around INR 2,000 crore of assets, which we are executing right now, which will come for us to yield NDCF out of. Understood. And secondly, on the solar asset side, I just wanted to understand, would you, given that all of us are aware that the solar tariffs are linked more to the production, which tends to be a little variable. And also there are questions regarding the productivity of these cells, solar cells keep going a little down due to maybe wear and tear over years. So, how does one solve for this? Operational variability on the solar assets would be higher than on the transmission asset. That's one. And second, what is the kind of IRR we end up making on solar assets? Sure. So I think, one, you rightly answered the question. There is very little variability. It's not variability which we need to worry about, especially if we are able to, we are assuming the right assumption at the time of acquisition. We are buying projects which are bid well, and we are, I would say, doing the technical diligence well. There is limited variability in the solar projects. I would compare it with any other renewable energy projects, whether it's hydro, wind, solar has the least amount of variability. Second, solar generation has a very, very long track record now in India. I've been tracking this sector since 2008, when solar plants came in. It's been 16 years and, I think the worries that we carried in 2008 to 2010 are all gone because the solar generation is one of the most predictable resource. Yes, there have been variations on account of cloud cover, on account of unseasonal rains, but they are not the ones which can really impact the end result massively, unless the developers are extremely levered, where 1% lesser generation and you have to default, right? So, so I think we aren't taking a sizable amount of risk in solar. We have about 20% maximum, 30% will be on that line. And a 1% or 2% solar variation, that is what we have seen in the past and very, very rare, does not impact us on the bottom line. So we are fairly secured on that. Having said so, you've got to check that you're buying the right modules, you are investing in that, you're cleaning it well, and all those parameters. So I think the reliability of solar modules and panels and delivery results are fairly proven now versus what it was 10 years ago. So there is a high degree of confidence in that we foresee. The IRRs on these- Oh, yeah. IRR, IRR depends on the situation, right? I mean, I'll tell you, IRR has changed materially depending on the interest rate, depending on, depending on the desperation of the seller. So it is, it is, it is, it is dependent on the macroeconomic cycle in which we buy the asset. So we would have bought the asset at 13% also, and we would have bought—we, we bought the asset in which we make 20% also, right? So it is, it is subject to the opportunity that we receive. And I think the IndiGrid, and for that matter, anybody who wants to make a differentiated return, got to have patience. And with our size, scale, and assets, we have patience. We are in the market. We don't get desperate when the prices go by. We're there to acquire each asset as long as the pricing is right, and that allows us to have windows of opportunity to acquire reasonably good IRR projects, right? So, so I, like, give you a range, it can be 13%, it can be 20%. That depends on the situation. Our focus is on making a differentiated IRR. All right. And my last question before I join back with you. So, although I believe around 78% of our debt is fixed rate, right? So how... Like, would the benefit of lower interest rate going forward in case there's an interest rate cut, would it not so much to us? Like, how do we plan on- So it is opportunistic, right? If interest rates are reduced by 1%, we have about INR 20,000 crore of gross borrowing, does not mean that our interest rate will come down by INR 200 crore the next month, right? There is a transmission process that will take place. About 28% is 22% immediate pass-through, so which would be immediate pass-through. And subsequent one, as the things get maturity and refinancing window, reset window comes in, we can exercise certain options to really take advantage of that. And certain debt is such that we can never refinance because we prefer to have long-term or fixed borrowing, so we have taken certain calls which are anyway very good rate, so we may never refinance. So the exact math, we haven't calculated, but my guess is that if the interest rates are 1%, it will take around a year or two for us to have a 50% of benefit on the portfolio on that. All right. Understood. Thank you. This is really helpful. Thank you. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead. Good afternoon, and congratulations on a good set of numbers. Just two questions. One is, on this, asset pipeline visibility. So you mentioned INR 2,000 crore, which is going to come up next year. But apart from that, you know, from the bid pipeline or something, if you can sort of give some estimate of what is the visibility, that we have at the moment about the, addition in our AUM. So that is one. And secondly, this, this, jump in NAV. So I'm guessing this is because the beta of PGCIL, sorry, Power Grid in which was much lower than the other. So what is the rough, you know, number of be- or the amount of beta that has been used for these calculations, and what was it roughly before that? Sure. So I think to your first question, you know, we don't forecast on growth. We don't give projections on what number of assets we are buying. We buy, we bid, and we win, and we communicate. But just to give you a picture, it's been 7 years since we listed. We are 7x in size, right, from the time we listed. So give or take, every year, we have grown by, you know, INR 3,000 crore-INR 4,000 crore at any point in time, and sometimes more. Now, why I said that is that, we are dependent on opportunities that are there in the market on M&A side. Also on the bidding side, while we do bid for it, does not mean we have to bid to win. Our focus always remains on: Are we getting differentiated return? Are we getting risk-adjusted return which is superior to where we are trading at? And if so, we have a larger appetite to bid. And I think the dependence for you as well as we management, the core belief is that as long as we follow that philosophy, there are gonna be businesses in the market for us to acquire and grow. Beyond that, I think it is, I won't say impossible, but it is something which as management, we do not guide on, that this year we are going to acquire INR 5,000 crore of assets or eight thousand or we are evaluating INR 4,000 crore in BD and variety of things. So, so we don't like to, project that, but if, if at all history is any measure, we have grown every year by INR 3,000 crore. So we are confident that the market is huge. There is tailwind in the sector. There is investment happening across sector, across every aspect of electricity value chain that we see. We think we have the right team, acquisition growth and engineering capability. So I think when all of this meets, we'll end up growing the portfolio. I think that's the belief under which we operate, so I think that's what is more prudent to follow. On the beta front, I think I'll invite Naveen to read the exact number, but I would urge you to look at the valuation report, which is our exact methodology and the numbers and everything, so that in case we are on the phone on some numbers, et cetera, you can check on the valuation report itself, what is done. But Naveen, over to you. Yeah. Yeah, so broadly, PGCIL beta, early bird beta was close to 25 bits, which was taken in the month of March, and power grid index, this has reduced to around 0.19 or 0.20. 20% reduction in that? Yeah, close to 20% reduction, but it, but it, on overall method, on overall working, this has an impact of around INR 10 on NAV. Understood. Understood. So Harsh, just on the first answer to the first question, I think the transmission sector, we were seeing some... I mean, it was, it was challenging in general to sort of acquire new assets. So are you seeing any positive or negative changes to that, which, the environment which was existing before, maybe, a few quarters back? Yeah. Are there any changes in that environment, or is it broadly the same as of now? No, I think, I think in the last four quarters, if I compare, what has changed is that there's tremendous pipeline, right, of assets, and the bids are happening. Every month, there are a few bids, and these are all public bids, so the bids are happening. So in general, the effects of the sector has gone up. Is it competitive? Yes, it is competitive. So I think that competitiveness remains, so one needs to find out assets where we are more better placed than others, and we bid for it. So I think it is, it remains a competitive place. Having said so, the market has become large, so that offer opportunities for everyone. And if the bid pipeline is much higher for the newer assets as well, then, wouldn't it also mean that the guys who are having the assets on their book, because they would be now forced to embark on newer greenfield developments, the propensity of them to sort of download these assets, to third parties like yourself, should increase ideally in such an environment? Yes, I would wish so. On paper, yes, but things move, things take time to happen, right? But I think I would have similar hypothesis as you are suggesting. Understood. Thank you, and all the best. Thank you. The next question is from the line of Subhadip Mitra. Please go ahead. Thank you. Harsh, I have a two-part question. First part is that, you know, in continuation with the previous participant, you know, on the same line, are we looking at possibly seeing a bit of a lean period for the next couple of years in terms of ability to acquire more assets, or what I should say is maybe the opportunity to acquire more assets, since most of these newer transmission assets are probably in the bidding or on the construction phase today? Yeah. And, and- Go on. Yeah. Yeah, and secondly, you know, one, when one looks at the, you know, kind of, bidders who are probably bidding for these, you know, new large ISTS assets, naturally a large component is PGCIL, followed by some of the larger private names. Some of these large private names also seem to be more of, you know, hold-to-maturity kind of holders- Mm. -who may never end up downloading the assets. So are you seeing some kind of shrinkage in terms of the transmission, ISTS opportunity, and hence you may need to diversify into other areas more? Okay. Yes and no. Yes, there are players who are hold-to-maturity players, so they will want time. But you know what? The only thing that we have learnt over the last seven, eight years since we listed, the market things can change in a variety of ways. So our job is to wait and wait for the right time and assets to come. We don't look at our business in a year-on-year manner, that this year is lean, next year is active. So we are okay for a lean year, for two years or one year. There is sufficient assets that we have acquired, and even if we don't do anything, right, we don't acquire any assets, our DPU is not going to drop for forever, eight, 10 years. It's going to continue to yield results, or rather it will go up when interest rates go down. So there are enough, there is enough that we have done over the last seven years that allows us to, I don't know how to put it, but let's say time the market, right? So what is the right time to acquire assets. So that's, that's one. So, so we don't, we don't, we don't need to acquire something just to grow year-on-year, to deliver a fact. That's going to come from our current assets. Second, what we are doing is instead of being a reactive player in the market, where the projects are bidded out, then subsequently dependent on strategy of developer that comes to monetization, we have, as we've already done, we are trying to bid for projects ourselves. So we already executed the first project. This year, we'll be commissioning 2-3 more projects. So we're already putting in projects in place on our own, and adding it, we can probably call it organic growth, right? So over last 7 years, probably the first 5 years, we did not talk about or we did not do any organic growth. However, 2 years ago, when we started on the first under construction bid, was the beginning of our organic growth. And as we have done in the past, we start small on anything new, and when we deliver it, we grow big. That's what we did for solar. From 100 MW, we waited for 3 years, and we did 1 GW. For BESS, we put in a proto in a substation, and then last year we increased it to 400 MWh, and probably this year will increase more. For transmission, we did a small project of INR 200 crore, and now we are doing INR 2,000 crore, right? And they will come in line in next 12 months as we complete the project. So that leaves us for doing more on this space on greenfield, especially if the size is large. Having said so, we completely, as I said, understand that we are not going to deploy entire risk capital on under construction projects. But with a pedigree and track record, there is tremendous amount of development capital waiting on the sideline to partner with developers. So we are working to see if we can put something like that in place, which enables us to do or other, instead of reactively, actively participate in the large transmission market. Understood. Understood. And with regard to the solar and the BESS-related projects, what quantum of your AUM would you say would, you know, at max, be what you would look at in those type of investments? So, yeah, so see, BESS, BESS is transmission. And we are following MoP guidelines. As long as the BESS is co-located with transmission assets, it is considered transmission. Second, BESS, the asset nature is also like transmission and substation, right? The contract is like sub-transmission. There is take-or-pay contract, capacity-based contract. O&M is like substation, so it is more like transmission as a asset versus renewable. So there is a tremendous appetite on there on RM. We are building a lot of scale capabilities to both execute and manage these projects. So I would say BESS, BESS is part of our base plan. We can do as much as we want, as long as the returns are good. On the solar side, we will maintain around 25% ratio at this point in time. And again, opportunistically, if people ask prices, it does not make sense, we may not acquire. And if there are assets which are returning us, you know, substantially good returns, we may acquire. So it's something which we'll weigh out. Understood. Lastly, any opportunity that you think is coming up on the intrastate transmission side? Maybe on the greenfield side, but they are very puny in comparison to what we are seeing on TBCB, on ISTS. The ISTS opportunity is very big. On the intrastate side, there are opportunities, but they are small. So we would look at it, but they are relatively small right now. Understood. Thanks so much. Okay. Thank you. The next question is from the line of Krishna Kumar Nalamwar, an individual investor. Please go ahead. Thanks for your, not conversant with English. Just try to understand me. I'm senior, senior citizen. I want to ask, that transmission assets is on build, operate, own and maintain model. And, after what happens after, completion of, agreement, say, one project is for 15 years, some projects are 30 or 5 years. So what happens after that? I want to ask, sir. Yeah, sure. So I will give a perspective. I would not say what happens because there are not any project which has gone through the cycle, but I'll try to predict what may happen. So our contracts are take-or-pay, and when the contracts are completed, the asset belongs to the company, and the company belongs to IndiGrid. So the asset belongs to you. However, the transmission assets have a very, very long life, 40 years, 50 years, sometimes more. And we believe that the replacement cost of these assets at the end of the concession period is gonna be very, very high. So there will be a very, very logical sense for the government, for regulators, for utilities to continue the contract and compensate the current licensee, which is the SPVs, to continue the projects and pay them on a regulated tariff mechanism or any other mechanism that is being fit. In the absence of that, so I think this is what most likely going to happen, right? That we'll continue to get paid. And I don't think there is any alternative to extra high voltage transmission that has been found yet, and we are confident that there is none. So we'll continue to have relevant, meaningful play even after 25 years or 50 years. One more question, sir. What is this asset's NAV there, so that is after that completion period, but that asset becomes zero or is it while calculating NAV, what is happening with this thing, sir? ... Yeah. So asset does not become zero. We, there are two methods to compute the NAV or other value the asset after life, after, after the concession period. The one is in which we follow is that we, we follow a regulated tariff mechanism model, that after the concession period is finished, if the CapEx of the project was, let's say, INR 100 crore, INR 30 crore was equity. On INR 30 crore, we earn around 15% ROE in the current regulated tariff mechanism, and we feel that that is what the model is justified after completing the original concession. So we continue to get paid on 15% on 30% of equity that is deployed, right? And rest is appreciated. So that's something which we believe will happen, right? Okay, sir. Thank you, sir. Yeah. Yeah, thank you. Okay. Thank you. The next question is from the line of Ketan Jain from Avendus Spark. Please go ahead. Yeah, am I audible? Yes, sir. Yes. Yeah. So I just want to understand from you the basics of the BESS project like where are we procuring the battery from, at what cost? What would be like the replacement cost, meaning at what point in the future will there be a requirement to replace it? And what could be the cost of battery, say, one or two years from now? Okay. So very difficult. I'll start the last question. I do not know the price of battery one year from now, all right? If I could predict, I would be trading, so I don't know. So our business is a certainty, so we want to finalize the orders and order the battery soon, so our economics are retained. In terms of where are we going to order battery from? We are going to import the batteries because India does not have capacity to manufacture utility scale battery storage batteries right now. There are a lot of investments happening. Hopefully, in a year or two from now, we'll be able to procure locally. What is the cost of battery? I'm sorry, but I cannot share that, considering it's a confidential information and, you know, competitively, a bid processes take place. So it's a difficult information to share, but there are widely available public resources to look at that. I can tell you we'll be in a similar range or, or even better than that, but, but we've not concluded the order yet, so it's difficult to disclose the price as well as disclose where we are going to end up at. But I can tell you, we are ordering very fast, and we are planning to commission our first project in this financial year. Once we commission, the data will become public, right? So I would urge you to wait for that. In terms of replacement, typically, we factor in that there is no replacement. We do all the capacity augmentation upfront. Projects that we have are not 20-year projects which requires its augmentation. The projects are 12-year projects, and all the bid process allows certain degree of degradation in the battery, which is in the allowable range. So the, when we set the battery, we figure out in a way that we don't have to augment it in future. Okay, so what you're telling is, for your case, you have not assumed any degradation, or it will operate for 20 years without replacement? No, no, not 20 years. 20 years, hasn't even, we have a 12-year contract. And- Sorry, 12 years. Yeah. 12-year. We do augmentation upfront. So what that means is that, whatever the extra battery are needed, we invest it in upfront. So if for 100 MWh battery, instead of 100, you have to do 110. So we do it upfront instead of waiting that we'll do it in third year, fourth year, fifth year. Because the scale of logistics of buying 2 MWh each year is far more complicated than buying 110 at one go. So basically, we put overcapacity upfront. Understood. My second question is on transmission. Now, the National Monetization Policy gave guidelines to some large players, like Power Grid, to monetize their assets. They had plans to do it to their own InvIT, but due to some policy reasons, that was put on hold. So our bid potential pipeline in the future for transmission, would it include these assets of Power Grid, which would eventually come up to be monetized? And if so, when will that happen? So I can tell you, we are interested. We have also written to Power Grid and Ministry that when you monetize, we'll be interested to participate in a competitively bid, transparent process. So when will they do it is in the hands of Power Grid board and Ministry of Power and Government of India. That we don't control. But yes, if, as and when it happens, we will remain interested. What was the policy-level challenge that happened which prevented the Power Grid from monetizing it through their own InvIT, which will that be a constraint for our assets which we are bidding on our own in the future? No, not really. They're different things. At least what I understand, again, with secondary knowledge, that Power Grid in the call said that they do not want to do a competitively bid process for their assets. Which I don't know why, because they are a public company, and they're supposed to call for an auction for monetizing, and don't know the call, then they decided not to monetize instead of calling for an auction. This is what I know from their transcripts, right? I don't have any other direct knowledge of that. ... Sure. Okay, that answers my question. All the best. Thank you. Thank you. The next question is from the line of Pradyumna Choudhary from JM Financial. Please go ahead. Yeah, thanks for the follow-up. One was a follow-up to a previous participant's question regarding what basically happens after the contract comes to an end. Don't you think, given that this is a regulated equity model where we've already earned a 15-15.5% equity on the project cost, at the end of the contract life, the government would substantially reduce the tariffs because whatever we earn extra would be a bonus, right? After the contract ends. It depends on how one calculates that. The contract in this case was very clear that the assets belong to the transmission licensees. So transmission licensees have an option of not performing and not doing that, right? Like, you know, if you don't give the right tariffs, and that's why we disclose the amount of metal that we have on the investor deck. If you look at that number on slide number four, there is about 530,000 tons of steel and aluminum, which is real metal outside the ground, which you can really realize. If you just apply the price of the metal today, right, or, I mean, obviously, we would've met our debt obligations and everything, it would come to 50% of our market cap today. So that is the size of the metal that we have in IndiGrid. Now, what will be that price at the end of 35th year or 30th year? I don't know, but it will be significant, right? So if that amount of size of capital is deployed, one says that, "No, you take very less return on that. Why would you operate that asset?" Right? And you would say, "I would rather liquidate." Okay. Having said so, the principle within the regulated tariff mechanism is very clear, that equity is never depreciated. Your only debt is depreciated. So if you invested INR 100 crore, INR 30 crore continues to be deployed because the INR 70 crore debt you amortize at the end of the concession period. The INR 30 crore equity has right to earn the ROE forever. That's the principle enshrined in the RTM mechanism, regulatory mechanism. So the equity is never depreciated, and therefore, if one gets 15.5% or 15% of ROE on the equity after paying all the tax, all O&M costs, everything put together, I think it's a reasonably good return. So we are fine with that continuing forever. Understood. And second one, can you give us an idea regarding how much, like, in rupees, how much transmission assets today are operational in India? In India? To get an understanding of the industry. That's a very difficult question because, you know, there are depreciated assets and all, it becomes very complex. I'll tell you, the high level number would be somewhere in the range of INR 300,000 crore at the interstate level. And intrastate level, numbers are not collated, so it's very difficult to calculate, but probably it will be again INR 200,000 crore-INR 300,000 crore. So we are looking at least, and this is my estimate based on my experience, what I have read too, there are very limited publicly available resources where everything is prepared, but I think it will be in the range of INR 500,000 crore-INR 600,000 crore. Total, including state transcos and central and everything put together. Understood. Understood. How much would be with the private players? Very limited. It will be, it will be less than at least 10%. Yeah, around 10%. Maybe 15. Understood. Somewhere in that range, yeah. Understood. That was helpful. Thank you. Thank you. Thank you. The next question is from the line of Tanvir Surve, an individual investor. Please go ahead. Yeah. Hi, am I audible? Yes. Okay, so with the recent change given, the STCG period now dropping to 12 months, does that bring any tailwind in terms of, you know, to integrate to more mutual fund participation from the equity side, now coming? Thanks, Tanvir, for asking that question. I was surprised that nobody asked that till now. Yeah, same here. I was waiting for that. Yeah. No, so, so this has been a policy asked for last five years, and we are pretty- Yeah. Happy, happy that this has come. I think one big thing for unit holders is that there is a lot of liquidity can come in, because, you know, people can actually monetize after a year if they think the timing is right, and then liquidity will increase. Correct. The second is that, we have been working with regulators and exchanges for inclusion in the index. Mm-hmm. Because with the size, at least, I don't know exactly, but we will come into top 200-250 entities probably, or even utilities index. Correct. But there are structural issues for inclusion of IndiGrid into indexes because of this 2-3-year holding period, which makes it difficult for fund of funds and mutual funds to really allow that. So the exchanges were not ready to, I would say, include us in the index. And inclusion in index would have led to more passive flows, so probably that is a good thing. While this is done, there are a couple of other policy hurdles which is with the regulators. When done, I would certainly believe that this will have tailwind because of more liquidity from being included in the index. So this is the first step in that direction. We truly hope that we are included in the index. Yeah, that's, that's wonderful because I think globally, a lot of REITs and infrastructure are included in frontline indices. So, so that is a big plus. And now I think the another check mark is just interest rates. I think once that also drops, I think the, you know, the index for REITs and infrastructure take off. Yeah, we also believe so. Okay, thank you. All the best. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you. Thank you, everyone, for joining the call and asking all the important questions. We are pretty psyched about the growth opportunities that exist in front of us, and we'll continue to deliver what we promised, and look forward for meeting you in the next investor call. Thank you. Thank you.