Ashoka Buildcon Limited (ASHOKA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Ashoka Buildcon Call to discuss ACL asset sale transaction. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Satish Parakh, Managing Director of Ashoka Buildcon. Thank you, and over to you, sir.

Thank you. Good evening, everyone, and thank you for joining us on our conference call. Along with me, I have Mr. Paresh Mehta, our Chief Financial Officer. We are pleased to inform you that despite the numerous challenges posted by COVID-19-induced disruption, we have successfully completed an asset sale transaction of Ashoka Concessions Limited of 5 SPVs. Ashoka Concessions Limited has entered into a share subscription and share purchase agreement with Galaxy Investments Private Limited, an affiliate of funds managed and advised by KKR. For the sale of entire share capital, including repayment of shareholders' loan for the 5 assets, which include Ashoka Highways (Bhandara) Limited, Ashoka Highways (Durg) Limited, Ashoka Belgaum Dharwad Highway Limited, Ashoka Sambalpur Baragarh Tollway Limited and Ashoka Dhankuni Kharagpur Limited for an aggregate consideration of INR 1,337 crores. We anticipate to close the transaction by September 2022, subject to the satisfaction of certain precedent conditions, including approval by respective lenders and the National Highway Authority of India. Of the total proceeds received in this transaction, INR 1,200 crores will be utilized to facilitate the exit of SBI Macquarie from Ashoka Concessions Limited, allowing SBI Macquarie to exit the company fully. Following this, the company will remain with 1 toll project, that is Jaora-Nayagaon, and 4 annuity projects, which is Hungund–Talikot, Bagewadi-Saundatti, Chennai ORR and KSHIP, as well as a portfolio of 10 HAM projects. We continue to make efforts toward the monetization of these assets in due course. We would like to inform you that we are in advanced stages of discussion with potential buyers for Jaora-Nayagaon and Chennai ORR and expect to sign the SPA by the end of this current fiscal year. As a strategy, company to focus on building EPC portfolio going forward. The deal is consistent with company strategy as it will help into the company's cash flow, contribute to a significant reduction in consolidate and free up managers' bandwidth allowing the management team to further intensify its focus on the becoming an all-around EPC player, with the primary emphasis on road portfolio expansion through EPC and HAM projects. With this, we now open the floor for Q&A. Thank you.

[Operator Instructions] The first question is from the line of Parikshit Kandpal from HDFC Securities.

Congratulations on the deal. Sir, my first question is on the deal. So how much of inflow comes to Ashoka Buildcon's stand-alone from this deal?

I didn't get it, what is -- how much of?

How much of the inflow from this will come to the Ashoka Buildcon's stand-alone entity?

Right. So plan mathematics, as it says, we are -- for the 5 assets, we'll receive INR 1,337 crores. We'll give an exit to SBI Macquarie of [ INR 28 crores ]. So from this transaction, [ INR 137 crores ] is what ABL should receive.

Because my question was that we have been consolidating the stake in different assets ahead of the deal. So is there any deal spending from other shareholders where will be able to give them any consideration for those acquisitions done earlier?

Yes. So most of it is purchased and only an extent of around INR 27-odd crores should be paid in due course of time. We're awaiting [ share ] permission for the same.

So 137 -- out of INR 137 crore, INR 27 crores will go to...

Yes, yes.

So now coming to the write-off part, sir. So just wanted to understand how much of write-off is expected from this because this happened below the book value of -- so if you can just highlight how much is the total equity investment done against these 5 assets. How much would be the write-offs likely we'll book in, in this quarter? And also from the other income, which we have been booking on loans and advances, so how much is the accrued and unpaid other income sitting on these 5 assets? And do we need to include that also in the write-offs?

Yes. So for the total 5 projects, whatever equity and promoter debt which has been given in the form of either initial construction financing as part of the equity or construction shortfall debt or revenue shortfall debt and increase accrued around that are the same, that would be approximately INR 2,100 crores as of date, which is on the books of as ACL as invested in these 5 projects. This will require to be adjusted from this earnings of INR 1,337 crores. So we will have a net impact of approximately around INR 800 crores on a gross basis at ACL level. And already provided for some certain impairment of INR 245 crores in the past few quarters. So the net impact would be approximately INR 550 crores.

And what about the other income, which we book on the stand-alone basis other income on these investments? So is there any debt which will come on us?

No, that is already included in the promoter debt. So it is a total composite amount of debt plus accrued interest on the sale.

Okay. Just last question around Chennai ORR and Jaora. So both are the state projects. So Jaora has seen decline in assets because of the construction activities going and some of the structures, which has led to diversion of traffic. And Chennai ORR is already category default rated by India Ratings because the annuities have not been coming on time. So in such a scenario, do you think these 2 assets are monetizable? And will you look to get a good value for these assets? And have we started receiving anything for Chennai ORR? If you can just update us on that.

So as we've already stated, Mr. Parakh has stated in his opening remarks, see, we are quite at an advanced stage for both these assets, Jaora-Nayagaon as well as Chennai ORR, with a potential investor, wherein we are at the stage of SPA. Even the SPAs are getting finalized. So definitely, there is a lot of interest. Talking to specifically your questions on JN, it's a model -- financial model which throw a valuation number. And in Chennai ORR, the rating is there only because there is a delay in the annuity received. This can be very well addressed by the potential investors so that we can decide what to -- how to handle the SPV post acquisition. But the interest is substantially there.

[Operator Instructions] Next question is from the line of Ankita Shah from Elara Capital.

Yes. So sir, what is the total equity invested in the balance size operational assets of ACL and the 10 HAM projects?

So on the 5 BOT net that's Jaora-Nayagaon BOT and 3 annuity assets, the total invest is approximately INR 530 crores. And in the HAM, the total investment as of date is INR 674 crores.

INR 670 crores. And the balance amount that we put in the HAM projects is?

It's approximately INR 300 crores.

INR 300 crores. And sir, within this INR 530 crores, the 2 projects which are in advanced stages for monetization, Chennai and Jaora-Nayagaon, what would be the amount in -- for that, those 2 projects?

Around INR 350 crores.

Total for both the projects put together?

For both the projects, yes, yes.

INR 350 crores, okay. And sir, on the write-off amount that you've mentioned, so the entire amount when which -- when it will be booked, INR 500 crores?

Because the transaction has already been executed and we are in binding documents, the call will be taken -- the write-off will be taken in the quarter of December -- this December, in Q3.

In Q3 itself?

Yes. Yes.

Okay. Okay. And -- sure. And sir, what is the debt in the -- in all the 5 assets that are monetized, which will lead to reduction in the consol debt?

The total debt on -- as of 30th September approximately was INR 3,150 crores, approximately.

On the 5 assets?

On the 5 assets. Yes.

The next question is from the line of Vibhor Singhal from PhillipCapital.

Congrats on the execution of this deal. So sir, you mentioned that the total equity invested in these 5 projects is around INR 2,100 crores. That's including all the loans and advances and all the kind of promoter, sub-promoter loan, everything that the SBI Macquarie Group and the Ashoka Buildcon Company has invested, right?

Yes. That is investment got from ACL or ABL to these 5 SPVs. There will be some additions, again, up to 31st March 2022 because valuation is of March '22. Some amount will get added, approximately INR 100-odd crores, and that's how the deal will conclude.

So that INR 100 crores, will that be reduced from that deal value? Or will that deal value will also increase by that much of amount?

No, no. It will -- the deal value will remain same, the cost will increase.

So basically, out of the -- I mean, we are -- instead of -- okay. Fair enough. So net-net, we can say that we'll get INR 1,237 crores, instead of INR 1,337 crores?

Yes. I mean actually, INR 2,100 crores will grow to INR 2,200 crores.

INR 2,200 crores, fair enough. So net-net, we'll get that amount. So -- and sir, at this point of time, is there any debt at ACL level, ACL holdco level?

We have INR 250 crores of NCD lying, which we had raised 12 months back.

Okay. And that will remain. So ACL as an entity will remain after this transaction?

Yes, sir. Because if we keep on holding the annuity project, that is Chennai ORR, JN and the 7 HAM projects held directly by ABL.

Okay. Right. So now, sir, all the other BOT, annuity, HAM projects, they all will be housed in ACL, in which we will have 100% equity holding?

Right.

Got it, sir. Also, sir, in terms of our stand-alone numbers, we report almost 200 -- I mean last year, we reported almost INR 192 crores of other income, in which around INR 118 crores every year has been in interest from subsidiary and JVs. So with these 5 projects going out, can we assume that number will basically reduce to 0 with these projects? Or will there will still be some more -- some income coming from other SPVs?

So it will substantially reduce what will remain is approximately around approximately INR 30-odd crores will remain from interest from income from ACL.

Okay. And that would be from the subsidiaries?

Basically, Chennai ORR.

Okay. So Chennai ORR right now is paying interest to the tune of, let's say, around INR 25 crores to INR 30 crores per annum to ABL?

Right. Right.

Okay. And if you are able to sell Chennai ORR also by March, then that would also go away?

Right.

Got it, sir. Got it. And sir, going forward, I think in terms of our HAM portfolio and our strategy, are we -- I mean, are we still looking to get into BOT projects? I think recently, we had submitted bids for the 3 Ganga Expressway -- in fact all the 4 Ganga Expressway packages. So are we still looking to get into BOT projects going forward? Or is it going to be largely focused on EPC and HAMs?

See, largely, the focus will be on EPC and HAM. But if there are really good bids around, then BOT is also not a barrier for us.

Got it. Got it. And in terms of other segments, will we continue to bid for projects in buildings and railway segments, which we have recently started bidding...

EPC, we are going to bid all around, like primary focus will be roads and railways and then buildings would be there, power would be there.

The next question is from the line of Prem Khurana from Anand Rathi.

Sir, first question was on Jaora-Nayagaon and Chennai. I think we are in the process of monetizing these 2 assets as well. But I just want to understand why -- I mean these were not a part of the transaction that we've done with KKR. Is it that, I mean, valuation was not as you expectation, which is why these were kept out of the transaction? Or is it as if, I mean, because these are state assets, which is where the client was not interested? If you could share your thoughts on these 2, please.

So these 2 transactions, we've already been talking to another investor simultaneously. So they have been carved out to another investor who's already looking at it seriously. And as I said, they are under a very mature stage of transaction execution. So KKR was interested in BOT projects. So these 5 assets are still on board to be sold. So they took interest in these 5 projects.

Sure. And on Chennai, just to kind of continue with what Parikshit was trying to understand. I think last time when we tried to kind of transfer the stake in Chennai ORR to Ashoka Concessions, the lender was not -- I mean was not willing to extend us approval. So you don't see any such situation at least this time around? I mean if you get to find a buyer and the lender would be comfortable kind of giving you approval for transfer of the ownership? Because last time they refused, if I remember correctly.

No, the lender had refused because they said, "You please get the permission of the authority," and authority will give the permission post COD, so post PCOD. So because we are expecting COD any time, once the COD is done, then the transfer permission from will be available. And lenders will be fine to transfer the stakes from ABL to any third-party investors. In case third-party investors are deep-pocketed investors, I'm sure they'll be more than happy not to create any hurdle.

Sure, sure. And on the inflows that will be there for Ashoka as a growth, I think you said INR 137 crores is what will come from this transaction. Would you get to have anything over and above this INR 137 crores? Essentially, when I look at last year annual report, I think these SPVs all put together was supposed to kind of pay us almost INR 140-odd crores towards the O&M work that you would have carried out or major maintenance. Or is it a INR 137 crores or INR 1,337 crores is also adjusted for the payables, which were due towards O&M or major maintenance or capital credit -- creditors?

Yes. So that is total payable as of 31st March '22. There will be some work still left out, which would be paid by the SPV post 31 March. So we'll execute also then and we'll be paid also then by the SPV, that is by the new owner.

Sure. Okay. Would you be able to confirm the numbers, sir, how much could that be, I mean, over and above INR 137 crores that you're expecting?

No, but then that will not -- that will have a cost also. So I don't have a number at all. There are 2 contracts of SPA -- sorry, MM with Sambalpur and Indore, which would be going on. So some part of the portion, approximately 50% approximately around -- I cannot hold numbers. So that will be pending to be paid by the equity.

Sure. No, no, no, I was asking about the number which was due as of 31st March. So when I look at our annual report for all these SPVs, some of these -- and these were, for instance, I think Bhandara is supposed to pay us almost around INR 26 crores, INR 27-odd crores for the work that would have carried out in the earlier years. So that number, the number that I have with me is around INR 140 crores. So this INR 140 crores would be over and above this INR 137 crores?

No, no. This is inclusive. Inclusive.

This is inclusive. Okay, okay. And how about impairment as stand-alone? So I mean the number that you gave us was at ACL wherein you already provided for a part of your investment to the extent of INR 250 crores. But when I look at stand-alone entity, I mean, we've not had any impairment as yet. So it's fair to assume that the impairment that will be there, the stand-alone entity would be higher than what will be there at ACL?

So the stand-alone entity, ABL you are talking about?

Yes, ABL, I'm talking about. So how I was looking at the number was eventually, so you said INR 2,100 crores is the investment, INR 800 crores will have come from SBI Macquarie. So our investment was INR 1,300 crores and I can say INR 1,300 crores, right, we're getting only INR 130 crores, right, so which gives me a number of more than INR 1,000-odd crores. ACL, I understand you already provided a part of the investment, which is where you won't get to have that large number, but at least a stand-alone entity, which is how the math would work or...

No, then there'll be Chennai ORR available, there will be other assets Jaora-Nayagaon available.

Yes. Sure. But their investments are separate, right?

Yes. So all in all, approximately the impact on stand-alone at ABL level would be to the tune of around INR 600 crores.

This would be after you monetize Chennai and Jaora, right, net you are talking about?

Before, before. This is before.

This is even before? Okay. And any claims in any of these SPVs that you are supposed to transfer?

No, all these remains with ABL.

Okay. How much would the quantum be, I mean, if there's any quantum that you could share with us? I mean how much is the number?

So they differ at various levels. So at the right moment only, we will be in the position to explain what exactly as amounts. Amounts could be larger in these 5 assets, would be to the tune of more than INR 1,600 crores, INR 1,700 crores. But what will crystalize will take time, and will have to crystalize within, say, 3 to 6 months' time, so I will take some more time.

The next question is from the line of Mohit from DAM Capital.

Two questions, sir. Firstly, sir, congratulations on closing the deal. The question is, sir, what was the Jaora-Nayagaon revenues and EBITDA for H1 FY '22? And how much you hold in Jaora-Nayagaon through ACL and through ABL?

In Jaora-Nayagaon, through ACL, we hold [ 27.74% ] and through our 100% SPVs, we hold 36.26 percentage.

So it's closer to 33%, right?

No, 36.26%. So 36.26 plus [ 27.74% ]. Total is almost 74%.

Because I'm asking this because in the annual report, you said 61%. Just trying to confirm that number, yes.

61% is more from a control perspective because ACL is the economic interest of technically 61% by ABL and 39% by Macquarie. And then Macquarie holds 29% directly in Jaora-Nayagaon. So that math, from a control perspective, 51% -- more than 51% is owned by ABL, so that's the reason we consolidate.

So economic interest is 74%, am I right?

Pardon?

The economic interest is for 74%?

Yes, yes, economic and direct interest, yes, 74%.

Understood, sir. And sir, the -- of course, can you just share the revenue EBITDA and date for Jaora-Nayagaon for H1 FY '22?

So the, what you call, revenue was approximately INR 80 crores, INR 81 crores in Jaora-Nayagaon. EBITDA almost in the tune of around INR 89 crore -- 89 percentage. And the equity -- sorry, the debt, which was there as of 30th September '21, was approximately INR 208 crores.

Understood, sir. Secondly, sir, given that our first phase of monetization is almost getting over, are we in discussion now to monetize our HAM assets? And when can we expect COD of Khairatunda, Bharatmala and Vadodara Kim and Belgaum-Khanapur?

So on the HAM projects, we had 2 projects which are already PCOD done. And we do have certain interest in the projects. But we -- on the way the HAM projects are getting constructed and will pan out, we believe that there could be another route, which is -- I mean, sorted by Ashoka Buildcon itself and hold it. So we are in -- though we have already put it on board for sale, that second alternative is also there to monetize it through an infrastructure.

Understood, sir. Lastly, sir, is it scope of O&M in these assets, which you've sold to KKR?

[indiscernible]

[Operator Instructions] The next question is from the line of Vaibhav from CIL Securities.

My question was what would be the debt on the consolidated level after the sale of this 5 SPVs?

So we have to be totally consolidated around INR 6,400 crores, of which debt for these 5 projects is INR 3,150 crores. So proximity INR 3,300 crores would be the consol debt post, yes.

Consol debt post the sale of these 5 assets?

Yes, yes, yes.

[Operator Instructions] The next question is from the line of [ Devang Modi ] from [ RJCO ].

Congratulations on concluding this deal. Sir, I just wanted to understand that having now, I think, this deal has been going on for very long, so how much of management bandwidth and growth appetite does this eat up for focusing on the core business? Because I understand this would have taken a lot of management time and bandwidth. So -- and how does this deal -- does it like -- is it a very -- would you say that it is a game-changing deal for the balance sheet and the growth appetite of the company going ahead?

So definitely, the asset monetization is going to help the balance sheet of the company to become more lighter. The debt-equity ratio also will improve substantially. Ratings also will go up because the commitments on the debt would go down, as the debt has -- debt will be going down. From a management bandwidth value also, whatever time was being invested in monetizing these and managing these assets, these would be reduced, and it will help the management to focus more on the EPC business and the new HAM road projects.

And what would be any upside, if at all, that will be available to us on these deal in terms of any pending claims that would arise to or anything like that, if you could quantify the same?

So a couple of advantages are there once the deal happens. So these projects definitely require cash in the next few years also and then they start becoming independent their own. So that requirement of cash will definitely become 0 post this deal happening. So that will improve the cash flow management of the company.

Sir, I was asking about...

About the claims also, these 5 SPVs we have claims against NHAI, which we are in the process of settlement. So definitely, there will be an upside in that.

So if you could -- I mean -- so we still have entire right to the claims or they will be sort of...

We have -- yes, we have...

I mean shared with what could be the indicative numbers over there and...

Nothing has to be shared with anybody.

Okay. So that will be basically available to ABL stand-alone?

ABL and ACL.

Or ACL, either ways. But if we want, it will become 100%. So as you rightly said...

Both ACL as well as ABL, yes.

And what would be the approximate range in which these claims could amount to?

No, this cannot be estimated at this stage.

The next question is from the line of Ashish Shah from Centrum Broking.

Congratulations, sir, on completing the transaction. So the first question is that with a sizable amount of cash that might come in the second part of the transaction, which is the Jaora-Nayagaon, what is our thought process in terms of what we want to do? I mean you did say that you will focus on HAM road, but is there anything else we have in mind which will consume that capital? So essentially, what's our capital allocation philosophy to be once we have done in both sets of transactions?

I think that we can decide at the time of -- actually signing the deal, we can disclose about...

Sure. Fine. Okay. In terms of the obligation of INR 1,200 crores to Macquarie, so that remains at INR 1,200 crores, right? I mean whether the -- because our date for consummation is September '22. So will this INR 1,200 crore increase or it will remain at INR 1,200 crores?

Hello?

Yes. Sorry, was I audible, sir?

I'm not sure. Can you just...

Right, sir. Right. What I was saying, sir, is that this INR 1,200 crore, the obligation that we have towards Macquaire, so now that remains at INR 1,200 crores because the transaction date for consummation we are saying is September '22, so will the interest for 9 months get added to INR 1,200 crores or it will remain at INR 1,200 crores only?

At present, it remains at INR 1,200 crores. So the -- as we had disclosed, it was INR 1,100 crores basic amount with a carry of 10% with a capping of INR 1,200 crores total. So then it will be capped at INR 1,200 crores at '22.

Okay. So that's fine. And sir, if I understood correctly, the receivables, et cetera, that we have from the SPV are a part of this consideration of INR 1,337 crores, right?

Right, right.

Okay. Fine. Right, sir. And sir, lastly, this -- is it safe to assume that the settlement of the conciliation of the claims will happen alongside the receipt of the MOC? Because typically NHAI, while issuing the NOC, insists on kind of settling the entire claim process, which has been going on. So then would it be safe to assume that by March or by June, this whole clarity would also come on claims question, at least in terms of time line?

Yes, we believe so.

See, no time lines can be given for settlement because NHAI comes out with various circulars. So it's very uncertain to gauge that settlement will happen and encashment will happen in certain time line.

The next question is from the line of Bharani Vijayakumar from Spark Capital.

Am I audible?

Yes, yes.

Yes, sir. Sir, what is the equity outside of the loss funding or any support by SBI Macquarie and [indiscernible] and other equity partners in these 5 assets?

So the total equity, including loss funding, overall INR 2,100 crores as of date.

Sir, I just want just the equity portion without the loss funding and the support.

Approximately, if I'm not mistaken, around INR 700 crores.

Okay. And of that INR 700 crores, how much would have been Ashoka Buildcon's proportion?

It's very specific, sir. Everything was sold into ACL and then construction for this 3, 4 SPVs was already underway. So it's not fungible. When it was put in by Ashoka Buildcon, around INR 1,000 crores, INR 800 crores were put in by Macquaire and the total sum was utilized for funding these 5 assets plus the other 2 assets of Jaora-Nayagaon and Chennai ORR.

Sir, just trying to understand our book -- price-to-book multiple, that's the only reason why I'm asking because, of course, SBI Macquarie makes INR 1,200 crores on the investment they make. So what is the price-to-book multiple on the exit is higher. So just trying to understand what exactly is...

Yes. So at least we know what exactly is the realization, which is possible in the other assets. It is difficult to come at a price-to-book.

Sure, sir. Probably once the Jaora-Nayagaon and Chennai ORR is completed, that will be more clear. I'll also probably get in touch with you off-line. So you mentioned that the impairment at the Ashoka Buildcon stand-alone level would be around INR 600 crores?

Right, right.

And that would be given effect in the third quarter's results itself?

Yes, that's what we audited, maybe fine-tuning and various audit guidelines would decide what exactly the numbers are. This is a...

No, I understand. Got it, sir. Sure, sir.

The next question is a follow-up from the line of Parikshit Kandpal from HDFC Securities.

Just on the last part. So this is a capital loss for us. So how can we get a tax shield? So do you think you can get any tax shield from the business profits? Or how are you going to utilize this?

So this could be utilized for when you're selling JN, Jaora-Nayagaon; Chennai ORR; or the HAM projects, definitely. And new assets should come. So there will be a life of 8 years for these losses to be enjoyed.

And second question is on, sir, in the past, you have seen one of your competitors selling the portfolio at approximately 1.7 -- between 1.7 and 1.8x price-to-book. So do you think that for the other 2 assets, at least you can -- on a lower size, you can extract that kind of value on INR 350 crores of equity investments?

See, I mean it's a valuation gain. We'll always endeavor to healthy [indiscernible]. So I think we'll have to wait and watch.

Okay. On the third-party liabilities outside the banking system besides the loan which is going -- which will reduce, is there any other third-party liability which will sit on our balance sheet as of this closure date, which may require to be paid off. So the third-party [indiscernible] beyond banks or any last-mile commitments towards completion of these 5 projects [indiscernible] completion. So anything else which will sit beyond this which we'll need to payoff...

No, no. This is all third-party liabilities, including NHAI, different loans are all inclusive of this INR 1,337 transition. So they are net of all these liabilities.

Okay. Sir, I think earlier you had -- so I must appreciate you not giving any -- putting any number to the claim. But I think you had earlier mentioned about INR 1,500 crores is the total claim which you have put for NHAI, so we don't know how much will get finalized. Is the understanding correct, right? So the final part we're not able to comment, but I see the amount which has been filed with NHAI is about INR 1,500 crores to [ INR 1,600 croresn ]?

It's a changing number and it is adjudicated at various levels and various times. So you can presume that number maybe -- but it is kind of kinetic. I mean, it's not static.

Okay. Earlier in the call, Satish, sir, you had mentioned that you were open to looking at projects like BOT assets if the value proportion offered by them. So recently, we had seen in the [indiscernible] sale, one of the EPC players, people -- like they've got a strong EPC capabilities like you, bidding for these, and they have clearly stayed away and most of the bidders were really pure-play developers. So just wanted to understand your intention for the project spend of INR 6,000 crores and a huge equity requirement. Really, if you set aside that 40% grant portion, the equity requirement will run into multiple hundreds of crores. So what was the intent? How would have we funded if you have got that project? So just wanted to understand from that point of view, the strategic intent on bidding for such a large project.

So for the large projects which we bid, of course, if you read the past, we have seen -- generally, we have been funding it from our cash flow generated from our EPC business. Presently, as we also observed that more than 50% of our EPC business is cash EPC contracts, where there is cash generated and also cash generated from the development projects EPC contract. So that typically generally is sufficient to fund the equity requirements of these projects. So that's the strategy in case we take in any...

Paresh bhai, this is more from this specific project of INR 6,000 crores requirement would have run into [ INR 1,000 crores ] stand-alone basis for one single project. So I just wanted a Satish sir's view because he has -- I mean, after having such a -- not a such a great experience in selling out BOT assets and incurring such a huge write-off and bidding for these projects in future, so just wanted to get some clarity on the strategic intent here. Because this -- one single project would have entailed about INR 1,000 crore investment of equity, if we had won it. Satish, sir, can comment on this would be helpful.

Hello?

Yes, Satish, sir, you are there?

Yes, sorry. I'm there.

Yes, yes. So I have a question. Satish, sir, that you had earlier in the call highlighted that we'll keep on evaluating on BOT assets if they offer value. So just wanted your viewpoint on this INR 6,000 crores Ganga Expressway project. If we had won, we would have required about INR 1,000 crore of equity investment after 40% grant. So just not having a very great experience in this earlier BOT assets, do you think that still, I mean, we continue to bid for sizable projects wherein none of our EPC -- peer-to-peer EPC player bidding for this Ganga Expressway, largely it was bid by developers. Just wanted to understand your strategic intent here and committing for such a large project type if we had INR 1,000 crore kind of equity investments. So you can just give us some sense there, how do you look it?

See, every project will have a different character. And I think we understand BOT last 25 years. In '96, we are the first player to start with. Okay, we have taken it because of COVID and other issues. The entire industry has taken. But that doesn't mean we don't understand. I think we understand the business as much as everybody in the industry understands. In fact, new players were coming in the sector. So everything has understanding of BOT because we would have values, for reasons beyond our control, is a completely nonacceptable statement.

No, no, I'm not saying -- I'm contesting that you have bid for wrong projects. I'm saying sizable one...

We understand our business very well, sir. And we know what we are doing, yes.

Okay. Sure, sure. Sir, I just meant that this INR 1,000 crore equity investment, not that...

Absolutely, there's not an issue when we monetizing all of our projects, we'll be left with more than that.

Okay. Sure. Got it. So that was basically the [indiscernible]. Just lastly on the growth now, so you said a lot of management bandwidth will get free. So any upgrade on guidance on growth side? Because we've got sizable order wins in the financial year-to-date, almost INR 6,000 crores worth of new projects we have won. Order book is at INR 12,000 crores, more than INR 12,000 crores now. So do you think that we can continue to grow on a EPC basis of 15% to 20%. If you can give some sense there on the growth guidance point and on the margins as well as EBITDA margin?

EBITDA and growth-wise, we are absolutely very confident the company will do fantastic in coming years.

So at least 15% kind of growth we can do for next 2, 3 years on a CAGR business?

Yes, yes, yes. Absolutely. 15% is too low to estimate, but we will do very good numbers in coming years.

And on EBITDA margin, like 11% to 12%, looks like because now the share of EPC is much higher...

A lot of things can vary with growth, depending upon the competition and all other factors. But growth definitely will be there. Our net profits will always grow. I don't see any challenge going ahead.

Okay. And we'll be open to take some more subcontracting works, like we've recently taken to be open. Even that opportunity will come?

Yes. Absolutely, absolutely, if they are making sense. If we are making profit out of it, we definitely will go for [ this ].

The next question is a follow-up from the line of Vibhor Singhal from PhillipCapital.

Sir, just 2 clarifications. One is when you mentioned that the equity invested in Jaora-Nayagaon and Chennai is INR 350 crores, this INR 350 crores is inclusive of all loans and advances, loss funding, everything?

No, no. This is the equity and -- so loan -- so there is loan advance at Chennai ORR level, loans and EPC outstanding of around INR 250-odd crores. INR 359 crores is the basic equity.

INR 359 crores?

INR 350 crores. Yes, INR 350 crores, approximately.

INR 350 crores will be difficult. [indiscernible] INR 250 crores?

INR 240 crores of debt and EPC outstanding at Chennai ORR level.

Okay. So put together in these 2 projects, we have almost INR 600 crores of investment?

Right, right.

Got it, sir. Got it. And sir, just to get the clarity on the state part. So at this point of time, Ashoka Buildcon plus Ashoka Concessionaire put together how much stake do we hold in Jaora-Nayagaon?

74%.

74%. And the remaining 26% would be held by?

SBI Macquaire, directly.

Directly. And they are not exiting that through this transaction? They might have it when we sale them -- sell the other project, but not through this transaction?

Well, we'll jointly get together [indiscernible].

Got it, sir. And sir, in Chennai ORR, what is our total stake?

50%.

And the remaining 50% would be held by what, sir?

GVR Infra, a Chennai-based company, EPC company. Yes.

Okay. And there also, we are not looking to consolidate it before the sale. Only when the sale happens, will we probably [indiscernible]?

Yes, we're working together. The process may happen at the consolidation, but we are in the process of selling it jointly.

The next question is from the line of Jiten Rushi from Axis Capital.

Most of the questions has been answered. Sir, one question I want to know, sir, is this deal SBI Macquarie has completely exited in the other assets also, right, sir?

Yes, yes. So whatever [ change ] will be paid off. So we'll have to wait for the payment to be made. But the day they are paid off, they -- we'll be acquiring all their instruments, PPP instruments or convertible instruments. And they will not have an interest in the business.

And sir, with this deal, this amount has been freezed or is subject to change if there's a delay from any -- delay from authorities for giving NOC or any other reason or any other maintenance or everything is included or how it is, sir?

Yes. So this is typically the total value. Presuming that all these permissions will come within a period of...

9 months.

Yes.

So this is the final value?

Yes.

The next question is from the line of [ Harshal Kotari ], an individual investor.

Congratulations for the transaction. I would just like to know the total equity investment that was made in these 5 projects that we sold.

Equity come debt, total promoter debt on these 5 projects was approximately -- is approx INR 2,100 crores as of date.

Okay. Including debt as well, right?

Yes, including promoter debt.

Now I would just like to know the equity investment that was done in this company by ACL.

That number, I don't have off hand. If you want, I can get it out.

Okay. So how should I get it?

One second. Total equity investment, because all these shareholders' loan are inclusive of software funding also, so I don't have a [indiscernible] as of date, as of now.

Okay, okay, okay. That was...

You can take it offline, if you require. You can always get back to us via off-line call.

The next question is a follow-up from the line of Mohit from DAM Capital.

Sir, my first question, is there any plan to retire the Ashoka Concession Limited debt with the new proceeds of especially Jaora-Nayagaon and Chennai ORR?

I think so it will depend on how ACL's HAM portfolio develops or otherwise if there is any realization, we will probably retire the same. Today, it's at a cost of 9.2, 9.3. Probably we'll want to retire -- depending on how the interest market is, we'll decide how to -- this debt is for almost 3 years [indiscernible] from 1.5 year to 3 years' time.

Understood. Secondly, sir, when do you expect the COD of the 3 HAM assets where I believe the work will be in advanced stages?

So one of the projects they have already recommended, I have recommended so we are awaiting that. For other 2 projects, we should -- we are waiting and we should get it within 2 to 3 months' time [indiscernible] on KSHIP project [indiscernible].

Lastly, sir, do you any plan to reduce the risk in case we bid for BOT or TOT? Is it possible to tie up this from financial investors and try to reduce our risk? Because I believe the greenfield BOT, especially the risk, was very high, very high.

No. So -- see, there are strategies around it. We understand risk. I told you very much because we have experienced this for many years. So we are entering infrastructure deals. We have...

Yes. Understood, sir. And sir, is there any BOT pipeline which are available for bid in the next 3 months?

BOT pipeline is not available.

As there are no further questions, I now hand the conference over to the management for their closing comments. Over to you, sir.

We thank all the participants for having joined this call. We believe that sufficient data points were made available. If there any still to be clarified on, we're always available directly or through our IR, Stellar Investor Relations. Thank you, everybody, and happy new year to everybody.

Thank you. Ladies and gentlemen, on behalf of Ashoka Buildcon, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.