Adani Energy Solutions Limited (ADANIENSOL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Adani Energy Solutions Q2 FY '24 Investor Update Call. [Operator Instructions] I now hand over the conference over to Mr. Bimal Dayal, CEO, Transmission; Mr. Kapil Sharma, CEO, AEML; Mr. Rohit Soni, CFO, AESL; Mr. Kunjal Mehta, CFO, AEML; Mr. Vijil Jain, Head IR, AESL. Over to you, sir.

Thank you. Thank you, Malcolm, and good morning all. Good afternoon to some of you logged in from a different time zone. Welcome to all the analysts and investors who have joined us for this quarter 2 FY '24 update call. I sincerely hope that you all are doing well. I'm sure you would have gone through the press release and the presentation that has been uploaded on our website. Let me start with an operational update followed by a financial update for the period ending September 30, 2023. Now I would categorize this quarter as a strong and a steady quarter for AESL. And while I run through the bullets here, you would realize why I'm saying this as well. On operational parameters, it was a very strong quarter with an average system availability of more than 99.68%, which actually led to an incentive income for the company of INR 26 crores during the quarter. The company added 219 circuit kilometers during the quarter and reached a mark of 19,862 circuit kilometers. Two important things which happened this quarter from a transmission business perspective is we fully commissioned 2 very important lines which we dedicated to the nation, which is WKTL line, Warora Kurnool and Karur transmission lines as well. Both of them have been fully charged, and we are very proud of this achievement because only WKTL line is whopping 756 kilometers. It's the largest interregional line, which actually is 765 kV line. On Karur, it's 1,000 MVA capacity, and it actually is helping a green evacuation of 400 kV system in Tamil Nadu. Very important 2 lines while we did that, we've also commissioned Kharghar Vikhroli 74 circuit kilometers, 1,500 MVA capacity, which is now helping Mumbai, wherein 400 kV is actually coming close to the Mumbai for, let's say, alternate power supply as well. In terms of network addition and growth, a comparative number here is that while country level, we added 1% on a YTD basis, AESL network growth was 5% in first half, adding 769 circuit kilometers during this period. In terms of capacity addition, while country-level growth was 2% YTD, AESL capacity growth was 15% in first half. Also, in terms of our under-construction pipeline, we are on track, and we'll make significant progress in coming quarters. As you would know, we've been talking about some of these projects, which are MP-II package, the Khavda-Bhuj line and WRSR. I'm very happy to state that the progress on these lines is going well and the WRSR line. These projects, together, will add more than 1,300 circuit kilometers to the operational portfolio. While this is something which is on the table, we are very buoyant about the upcoming transmission project pipeline, which is upward of INR 1,26,971 crores, spanning around 12 to 24 months. A lot of bidding to take place, and I'm sure you would be aware of this. On the transmission business segment, it translates into the financials of almost 8% operational revenue growth, which we achieved, equaling INR 941 crores of operational revenue in Q2. The revenue growth seen in the transmission business was partially driven by commissioning of these lines and some of the incentive income as well. In terms of EBITDA growth in the quarter, we achieved 9% growth with an EBITDA reaching an absolute number of INR 907 crores. Q2 PAT, as you would have noticed, for transmission business stands at INR 259 crores, which is an increase of 8.5%. From a profitability point of view, we focus more on cash profit, which has come in at INR 501 crores in quarter 2, which was 4% higher from the corresponding quarter. That was around the transmission business. Let me touch on the distribution business a little. First, the operational update and then the financial update, then I will run into the consolidated numbers and then we'll open up for question and answers as well. At AEML, the Mumbai DISCOM ensured supply reliability of 99.99%, really a number which we are proud of, scoring well on all reliability parameters, including SAIDI and SAIFI. The strong demand momentum continued in quarter 2 with energy demand improving by plus 9% year-on-year to around 2,446 million units. We managed to keep the distribution losses at a record low, which comes in at 5.81% against 6% in quarter 2 of financial year '23. The distribution losses fell steeply due to seasonal factors like higher billing and almost days amongst others. The collection efficiency stands at whopping 79.2%. Another great aspect, which I think we've been sharing transparently with everyone, which we are really proud of, is the share of RE procurement in AEML, which increased to 38%, which is very unique. No distribution company can boast of such numbers. By the end of September, we are at 38% as committed under the July 2021 SLB issuance. Received LOA now for smart meters, there is a lot of excitement around this line of business. Our -- we've received LOA from Maharashtra, Andhra Pradesh, Bihar, totaling to 14.76 million smart meters with a contract value of INR 174 billion during the quarter. We stand pretty excited about this line of business coming alive soon. Our total smart metering under construction pipeline stands at 19.4 million smart meters, consisting of 8 projects with a contract value of INR 232 billion. On the distribution financial side, once again, very steady performance as well. The distribution segment revenue stands at absolute number of INR 2,480 crores in Q2, which increased by 15% year-on-year on account of higher units sold and on account of customer acquisitions. The distribution business continues to deliver very strong performance with double-digit growth in revenue and operational EBITDA. The distribution PAT was INR 25 crores, which is up due to onetime bookings which were made during the last year of the same quarter as well, hence it stands at 155% up year-on-year as well. So that was a snapshot of the distribution business and the financials of distribution as well. A quick comment on consolidated financials as well. Our consolidated revenue, as you would have noted, stands at INR 3,421 crores in quarter 2, witnessed a double-digit growth of 13% on account of the commission -- newly commissioned projects and higher consumption in AEML as well. On a consolidated basis, our EBITDA increased to INR 1,443 crores in quarter 2, increase of 6% year-on-year. Our PBT of INR 370 crores was 48% higher year-on-year from a lower base. And consequently, our PAT ended 46% higher at INR 284 crores, translating from a higher PBT as well. This actually gives you a snapshot and highlight of transmission business, the distribution business and the consolidated financials. I'll take a pause here and look forward to your questions and interaction during last -- next 1 hour. Thank you very much. Over to you for your questions, please.

[Operator Instructions] The first question is from the line of Mohit Kumar from ICICI Securities.

A few questions on my side. Sir firstly, on the transmission pipeline, you just spoke about INR 1.27 trillion. When do you expect the entire pipeline to get converted into -- you need to know -- is it proper -- in a sense, do you expect that to get completed? And is the -- is all the RFQ and RFP have been floated already? Or you are -- hello?

Yes. Thanks, Mohit, for your question. Your question is around liquidation of this INR 1,26,971 number, which I quoted as the transmission pipeline. Let me back off a little. This is -- the source of all this is the document which came out in November, December last year highlighting the 500-gigawatt ambition which the MOP has laid down for green evacuation. As a consequence, a lot of transmission which needs to be added, and I think the total number there was -- by 2030, the number was almost INR 2,50,000 crores. What we see is in the next 12 to 24 months, we will be seeing liquidation of this INR 1,26,000-odd crores of pipeline. As we speak, the bidding and the reverse auction is going on, primarily 2 very heavyweight evacuations which are actually lined up: one is the Rajasthan corridor as well; and the second one is the evacuation for Khavda, which is almost at 30 gigawatt, the country's largest corridor which is coming up, which we are proudly participating both from our solar side and from the transmission side as well. I think there is a small number, which is left wherein the RFPs have not been issued, but most of the RFPs have been issued as well. And we strongly feel that lot of this bidding will take place in the next 3 to 6 months. And I think we will see a lot of movement and conversion of this into orders as well. This quarter is certainly going to be very heavy with reverse auctions coming up as well. So I hope this answers your question, Mohit.

Yes, that helps, sir. My second question is on this Bhadla-Fatehgarh. I think the largest HVDC line is up for bidding. What is the time line? And are we bidding for the same? And then the related question is that are you facing any issues or contemplating any issues from sourcing the HVDC equipment? We understand that there is -- all the factories are full across the world.

So look, we are very interested in such corridors and such projects as well because from the group's perspective, one of the things which we have demonstrated is an unparalleled project execution capabilities right from, let's say, KVTL or WKTL or the India's or Southeast Asia's first HVDC line, which we brought up as well, which we are maintaining. So we are pretty much the only ones in this segment. So yes, we are very keen and also rightly capable to execute this project. When there -- this is no secret that there is a dearth of suppliers in 765 and above segment as well. However, we are pretty much working on all quarters, including strategic discussions with some of them at the moment to secure our equipment. And hence, I don't think I would like to raise a red flag on this one as well. The only thing I would like to say is, to sum up, yes, we are interested. Yes, we are very excited about it as well. And yes, we are working to make sure that we, if we are successful, we will really deliver this on time with finesse, which we are known for. Thank you, Mohit.

My third question, sir, how is the progress on HVDC execution which we are building up in Mumbai? And how much CapEx you incurred until date?

You mean the HVDC Mumbai line, which is under construction?

Yes, Mumbai. Mumbai, yes, sir.

Rohit?

Yes. So Mohit, so HVDC Mumbai, the project is running on track, what we communicated. We're looking it to be commissioned in '25, '26. Our total CapEx, what we had committed, is close to around INR 6,600 crores to INR 7,000 crores. Again, that our current spend is close INR 1,100 crores to INR 1,200 crores what we already spent. Most of the equipment have been ordered. It's more of scheduling of those equipments, which needs to be delivered from Indian sites and also from international sites. You will see more heavy spending coming in the next 18 months to deliver this project on track, Mohit.

The next question is from the line of [ Abhiram Iyer ] from Deutsche Bank.

Congrats on a good set of results. My first question was on the change in regulatory capital balance. So we booked a reversal of about INR 300 crores in the first quarter and then now this is down to like INR 180 crores. Can you just help me understand why we are sort of now under-collecting back again with respect to what we had collected in 1Q? That's question one. Question two is more in lines of AEML debt. Could you provide us a gross debt number, including all working capital loans? And what's the cash balance at AEML? Additionally, is there any plans to provide support to the AEML bonds currently? And what's your view on the current sort of rating outlook and how will it be resolved by?

Yes. And I'll request Kunjal to respond.

Sure. So first question was with respect to the regulatory asset base. So the amount currently stands at INR 7,870 crores. Now if you look at it, you see the reduction that's primarily on account of the depreciation, which is provided in the first 6 months. And as you would know, the capitalization or the addition to the regulatory asset base does not happen in the first half. I mean, the first half is generally during the monsoon, so we do not add any asset base to the regulatory asset base. And therefore, you would see that the capitalization has happened only of INR 200-odd crores, and the reduction on account of the normal depreciation is slightly higher by about INR 300 crores. So therefore, you feel that there is a reduction in the regulatory asset base at the end of September. But if you -- I mean, once the monsoon are over, the capitalization will peak, and therefore, there will be a significant increase in the regulated asset base. We are working towards a capitalization or the addition of the regulated asset base in the range of about INR 1,200-odd crores by the end of this financial year. And this will significantly increase the regulated asset base by the -- by March 2024. So it's only a timing difference that you are seeing a reduction in the regulated asset base. Otherwise, the regulated asset base, by the end of the financial year, would also increase in line with what we have already committed. Second was with respect to the gross debt and the cash balance that we have. So basically, there has been no increase in the debt balance or the -- any additional borrowings which AEML has done. The company currently has a gross debt of INR 11,367 crores, which includes a subordinated debt from the shareholder, that is QIA. Without the QIA's debt, the total gross debt is INR 9,350 crores. We do not have any working capital. So the gross debt is INR 9,350 crores. The cash balance that the company has is INR 1,183 crores. So the net debt is INR 8,167 crores. That is $1,300 million of 2 bonds and $140 million of cash, so equivalent to $1,160 million of net debt that the company has.

Understood. And with respect to -- is there any current plans in order to support the bonds in the market? Given where they are pricing at, I believe that they don't currently reflect what the AEML should be priced at. Is there any plan from the company in that sense?

So we will come out with the plans as and when it is approved. Currently, there are no such plans. But the company does take -- I mean does note that the yields are not fairly priced. So the management will work towards the correcting the fair price. Currently, there are no such announcements.

Understood. And one last question. This is more on Adani Energy Solutions as a whole. What's the -- given that you've already sort of gotten approvals from the shareholders for an equity raise, is -- and sort of indicated by the wider group that this is going to be completed towards the end of this year. Are there any changes to the time line now? Is this mooted equity raise going to happen next year now?

Abhiram, Rohit. Thanks for that. I mean I would say the plan is on. So the only way which we are thinking is what is the right timing and what are the instruments to be used. So this was more from enabling where we said we are looking at $1 billion of raise. So I think we're still working on it. So the time what we've given by year-end, that still holds good from our perspective. And I mean, just to give assurance, I mean the current growth what we have, the equity support 100% exists for it because we are generating enough cash from the transmission segment also and from the distribution segment. Given the pipeline is going to be a bit more healthier than what we had anticipated, so to prepare ourselves for the higher CapEx growth pipeline, which comes as an opportunity, we thought that equity raise would help us for us to grow further. But the current pipeline projects, what we have, they are fully supported with the equity what we have in the business.

[Operator Instructions] The next question is from the line of Prapti from AllianceBernstein.

Just I wanted to check with you on your credit ratings. I understand that Adani Electricity is on a negative outlook by both the rating agencies. So wanted to get some sense on what kind of conversations the company has had with the rating agency. And what are they looking at to resolve this outlook back to stable, hopefully, in the -- and if there are any time lines around that? That is my first question. Secondly, I do recall in a couple of quarters back when we had met, there was this mention of a potential U.S. private placement for -- as a part of your debt management plan. So are there any updates around that? I would appreciate a response on these.

Rohit?

Thanks, Bimal. Prapti, thanks for your questions. So the first one, on the rating, I think we have been actively communicating, in fact, I would say we are overcommunicating with the agencies given the last 6, 7 months through which we have been. So the engagements happen at multiple levels. And if you see, we have gone through the whole grind of the rating agencies, both domestic as well as international. Now our ratings stay intact. The only thing which got changed was the outlook and predominantly stemming out of 2 reasons. One is the noise around the wider portfolio, that's part A. And part B, given the noise around that, there can be any possible cost increase on some of the loans, which the company might have to tie up in the days to come. And given those 2 reasons, the rating agency has put on a negative outlook. We have been actively engaging with them. I think last 6 months have been, I would say, learning from our perspective and also from the market. Last 3 months, I would say, a lot of positive development. I think active engagements are on. We should shortly see certain positive developments, but that's more coming out of when the noise gets suppressed kind of thing. So that's the part on the rating side. We are actively engaging. In fact, over-engagement is happening at this point, and that's part A. I think roughly the part 2 was U.S. private placement. I mean, yes, we were and we are looking for a private placement of $360 million of transmission assets, which were commissioned in the last 3, 4 years. That's a size of USD 360 million. The transactions, paperwork are all underway. We are just working which would be the right opportunistic time for us to conclude the deal. So the homework and the paperwork is happening at the back end. So we are still working. If we can get it early next year, that's what we are working. So the work is still in progress.

Okay. Just this one follow-up on the part A of the question. Is there any figure or any event that these rating agencies are waiting for, say, for instance, completion of this U.S. private placement, they will check the cost of funding or, for that matter, even Adani Green sort of refinancing that happens? Is this something that these rating agencies are waiting for before revising the outlook or there could be various other elements as well involved in this?

No. Prapti, there is nothing of that sort. I mean I'll again reiterate, all our financing happens at cash flow generating SPVs and they all are ring-fenced, from day 1 operational. So there's nothing which they're waiting at this point of time. I think it's more on the noise what we have on the outlook side, that's the only part. The USPP, I don't think there's any rate for which they are looking because all -- whatever we have done, they are either fixed price coupons, they are self-contained by themselves. So I don't think they're waiting anything at this point of time.

The next question is from the line of Bharanidhar from Avendus Spark.

Can I go ahead? Is it audible?

Sorry to interrupt you, Bharanidhar, your voice is not audible. Could you speak a little louder? Are you speaking from a speaker phone? I would request you to speak from your headset.

So I've changed to the phone only. So is it audible now?

Management, is it audible?

Yes, better, better, better.

Sorry. Sorry for that. So I just wanted to find out because in the initial remarks, you spoke about the 1.27 lakh opportunity in the next 12 to 24 months. Even the National Committee on Transmission is talking about INR 70,000 crore kind of a pipeline in the near term. But if we see the actual projects that have been awarded, it's closer to INR 10,000 crores to INR 15,000 crores kind of a number on an average per year. So just wanted to find out what are the reasons why actually on-the-ground projects getting awarded are on a much lower level? And what are the challenges for this awarding activity?

Yes. Thanks, Bharanidhar, for this question. Once again, I'll take a step back. And I think if you go back few quarters, you will realize that there was hardly any bidding that was taking place. And I think at that time, one of the mature corridors of Gujarat -- of Rajasthan was actually stuck because of the GIB issues, which actually got cleared, I think if I -- if my memory serves me right, around the first quarter or second quarter -- calendar quarter from this year. Post that, we've started to see a lot of traction. At the moment, as we speak, even I think today and tomorrow, there is bidding and reverse auction taking place as well for one of the Rajasthan corridors as well. So I think, as I mentioned earlier, that this backlog is being cleared in a very fast manner as well. Let me give you the significance and the reason why this, I believe, this backlog will be cleared off as well. As you would know that Rajasthan corridor needs a lot of upgradation and a lot of evacuation as well. And on Gujarat side as well, the Khavda project evacuation is almost getting ready at the moment in next, let's say, quarter, quarter or 2, and you'll realize that the generation will possibly start as well. Once it starts, I think we'll see very heavy numbers coming in as well. And I don't think this time, we will actually miss out on evacuation that the transmission lines are not ready and we have the farms ready as well. So I think in next 1 quarter, you will certainly see the large bids coming out as well. So I'm not too worried about a month here or 2. Yes, whatever has happened is a smaller number, but what is going to happen in the next 2 quarters, there will be a lot of catching up that will take place as well. So there are big ones lined up, including HVDCs as well.

Okay. Okay, that is very clear. So if I were to just ask about the potential on this HVDC line, this is this Bhadla-Fatehpur (sic) [ Bhadla-Fatehgarh ] line, right?

That's right. So there are -- there's one HVDC line there and 2 coming up in Khavda as well, Phase 5.

And what would be the name of that, sir?

So this is Phase 5A and C, if I'm not mistaken. These are fairly heavy projects in Khavda.

So this Bhadla-Fatehgarh and the 2 in Khavda put together, how much would be the total size, sir? Would it be each INR 10,000 crores kind of number?

Bhadla is INR 12,000-odd crores. I think Phase 5A is INR 24,000 crores and C is INR 12,000 crores as well.

The next question is from the line of Nikhil Abhyankar from ICICI Securities.

Sir, my question is regarding the smart metering. So what is the current order like, the bidding pipeline that we have, which are the large tenders that you are expecting to open up in, say, next -- in this fiscal?

Thanks. I'll request Kunjal to respond.

Sure. So basically, as already communicated, so the total smart metering pipeline that we have is around 19 million meters. And we -- so -- and that roughly works out to around total contract value of about INR 232 million. The total size which is there is around 23 million quantities of smart meters, which are available, out of which we have already signed or are selected as one under the 19 million meters.

Sir, I was asking for incremental order inflows going forward.

So basically, see, this is a big process. And as and when the bids are won, the incremental -- so the total pie, which is available across India, is about 25 crore meters. So that is -- that's a huge pipeline. Out of which, we have won around close to 2 crore meters.

Okay. And sir, out of this INR 232 billion worth of order that we have, so what is the expected CapEx for these? And when should we expect the revenues to start coming in?

Sure. So the CapEx part is -- see, it's dependent on various types of the technology and various types of the topography that is there included in it. I mean the typical size of the project as well as the total -- the entire architecture that we deploy on smart meters is dependent on it. So it's very difficult to quote a particular number as to what would be the CapEx size. But suffice to say that the entire smart metering project is significantly value accretive to AESL. And roughly in that range of around 15% to 20% is incremental returns are expected from smart metering.

Okay. And also, since a lot of smart metering orders have been given out in the past 1, 1.5 years, so are we -- do you expect to face any sourcing issues for such a large number of meters? And are you also compliant with the 65% local value addition norms? Do we expect to meet that?

So smart metering is not a very, very technology that's -- so basically, the entire technology, entire infrastructure which is there is locally available in India. So we will be able to comply with whatever requirements are there. I mean the metering technology has been prevalent in India since several times. There could be certain pieces of communication, which we would need to be imported, but that also is evolving. And we will be able to meet the requirements of whatever Make in India or the local requirements are there. The more important thing which is there is that the entire back end of the supply chain has now evolved, and there is an entire ecosystem which will cater to this demand of completing the smart metering. On your question -- earlier question as to when the revenue will rise, the most important part of this project is that the cash to CapEx cycle is very, very limited. I mean we do not have to wait for 24 months or 36 months for the entire project to get completed and then start earning the revenue. The revenue will start earning as and when the meters are installed. So it's more like a churning of a working capital deployment, which is required or the capital which is required. So in 3 months', 4 months' time, as and when the CapEx is incurred, we will immediately start earning the revenue. So that's the beauty of this project is that the cash to CapEx cycle is very, very limited unlike other projects or other infra projects.

Okay. And sir, have we started ordering for these meters already?

Yes, yes. We have started ordering. So the first project that we won was in the West region, which is in South Mumbai. The other project is in the Assam. For both these projects, we have started ordering for the entire meter requirements.

Okay. Sir, just a final question on parallel licensing, so any update on that?

Kapil, do you want to...

Yes, Nikhil. So the application which we have made to MERC for Navi Mumbai and UPERC for Gautam Buddha Nagar, there are certain additional requirements, which commission asked us to submit, which we are -- we have submitted recently. So now they'll be processing our applications at both the states.

The next question is from the line of Love Sharma from JPMorgan.

Just a couple of questions. If you could just highlight on the CapEx side, what is the total CapEx you're looking to do at Adani Transmission for the entire this year? And how much has been spent in the first half and excluding the AEML? And secondly, related to that would be on the funding side, has there been any new facilities or any new funding which you have arranged on the debt side to take care of this -- of the CapEx requirements? And tied to that would be the go-to-market of the construction facility, if you could just highlight how much is the availability there and if you're looking to add something more to that?

Yes, Rohit, please go ahead.

Love, thanks a lot. So I think CapEx -- you asked 3 set of questions. Starting on CapEx, the guidelines, what we have been giving is every year, we look between INR 55 billion to INR 60 billion of CapEx. That's sacrosanct for us. So we are being on track for it, and our first half numbers are also in line with those numbers. I think we have done close to around INR 25 billion of CapEx so far, and that's the CapEx number for [ you ]. Second part is funding, I would say, a very good quarter from a funding perspective. So we have been able to do the financial disclosure for HVDC line, which is under construction in Mumbai. The first drawdown happened in this quarter. So that has happened significantly. Then there were 4 more projects for which we were working on financial closures, which got concluded in this quarter; of which for 2 projects, we've been able to draw the funds also to the tune of INR 750 crores, across USD 80 million, USD 85 million. So that is on the financial disclosure and funding. So that's working pretty well. The third part of what you said was go-to-market facility, which you are referring to the construction facility. If you take the construction facility, what we have done was $700 million construction facility, revolving up to $1.1 billion, of which I think 2 transmission lines, which were WRSS and Lakadia Banaskantha LBTL lines were commissioned last year. I think we have used $170 million of the construction facility line for them. So those lines are operational. This is what we do on the USPP, those limits can be vacated out. KVTL, I think Mr. Dayalji mentioned about it that kV line has been connected to the grid. We are just waiting for the legal circuit to be completed. With that, the KVTL project should also be done. We're targeting that to happen in this quarter. So with that, the third line also gets constructed. So all those funds would be available for the HVDC construction. Currently, $300 million is what is the first tranche of it. I think that would take care for most of the requirements for this year and early for next year. So the go-to-market facilities are operating well for us. The fundings have also happened, which is a very positive thing, and they have been in line with what we expected. So that's where we stand now.

Okay. So just to confirm, the go-to-market facility or the construction facility, the current availability is how much again, out of the $1.1 billion?

So for KVTL, we have the balance, I think it was close to around $230 million. That is available for KVTL. We have drawn, I would say, between USD 80 million to USD 85 million. The balance would be taken out or there might be saving to that extent. The HVDC is the $300 million tranche one. That fund is available. Post the takeout, the balance [ for it ] would be available. So total $700 million go-to-market facility available for HVDC.

Total $700 million, okay, I understand. Got it. Okay. And then on the -- just one more question on the facilities or the financial closure of the lines, which you mentioned, I believe those are the facilities in the onshore loan market?

Correct. So we have drawn the funds from the onshore markets. So we have not done any offshore. Offshore, we have done the construction facility, and we have done the onshore. Post the completion, I mean, we have been communicating earlier also, I mean, as a derisking strategy from management post the completion period and, say, 1 year of history, we look at go-to-market facilities or take out the long-term ultra bond where the interests are fixed. So there's a return to the shareholders, the cash flows and everything that are known and they minimize the risk kind of thing. So that would happen. That's a part of the normal cycle, which we'll do it. So that's the reason why we have this private placement discussions going on. Post that, again, 1 year or 1.5 year later, we'll again look at similar kind of facilities to be done.

Okay. And just on that, last question for me, could you share the pricing on this from the onshore project loans, which you would have raised? And what kind of pricing internally have you got?

So I would say, at market, I mean, if you are looking at exact number, it ranges between, say, 9.5% to 10% kind of number.

9.5% to 10%, okay, I understand. Sorry, one more question and last question for me, sorry again. For AEML, I believe you have not released the Q1 results yet. Is there any time line as to when we could expect Q1 and Q2 from AEML?

Say again, Love? We couldn't hear the last question.

What I meant for the -- for AEML, right, Adani Mumbai, I believe I couldn't see the Q1 and Q2 numbers on the website. Is there a time line as to when you would be releasing those?

So we'll release it on -- between today and tomorrow, we'll release it.

The next question is from the line of Abhiram Iyer from Deutsche Bank.

Sorry, just a follow-up question on the HVDC line. Is this still structurally under AEML as of now? Or has this been shifted already...

No, the structure is still the same, Abhiram.

Got it. And the plan is still to complete the construction under AEML and then shift it later?

Yes, that would be decided at that point of time.

[Operator Instructions] The next question is from the line of Sharon Chen from Bloomberg.

Congratulations on a good set of results. Just to clarify on the CapEx guidance, can you break it down this year's CapEx guidance by transmission, smart meters and also distribution? And given you've talked a lot about the strong pipeline, do you expect CapEx to increase from next year?

Sharon, I think the annual CapEx guidance, what we had said $55 billion to $60 billion. If you take broad numbers for this current year, you should be looking at between, say, $45 billion to $50 billion coming on the transmission segment. If you take AEML, which is a distribution segment, that stays between $10 billion to $13 billion. That's part B. And smart meter, I think commissioning and deployment just started this current year. So I think it will be a small number even product. So that will progress it up. We have got a 30-month window for construction. So that would happen predominantly in the next year and then a year later to it. You had asked what is it likely to happen. Going forward, I think with the HVDC line, which is connecting Mumbai, that is going to be a big capital investment of, say, INR 6,500 crores to INR 7,000-odd crores. So that would see more spending coming on that line in the next couple of years. So you might see a bit elevated CapEx spending, but more or less in line with the guidance what we have been communicating earlier. So that's where we stand, Sharon.

As there are no further questions, I would now like to hand over the conference over to Mr. Bimal Dayal for closing comments. Please go ahead, sir.

Thank you. Thank you very much for all your questions, and thank you for joining in on this call. We really remain excited about what we are doing, excited about the sector we are in and the growth and the participation in the coming tenders as well. So there is a lot happening, as you would know. With this, I would only say that eyes down for the coming quarter. And as you would know that we are also entering into this festive season as well. So I don't want to miss an opportunity to wish you and all your loved ones a Happy Diwali and a Merry Christmas as well. Stay safe. Thank you very much once again for joining in. Thank you. Thanks, Malcolm.

Thank you very much, sir. On behalf of Adani Energy Solutions, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.