GAIL (India) Limited (GAIL.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day. I welcome you all on behalf of IIFL for GAIL India's investors and analyst meet to discuss the company's performance for the year gone by and share the performance outlook. Today, we have the entire Functional Board of GAIL represented by Shri. Manoj Jain, CMD; Shri. A. K. Tiwari, Director, Finance; Shri. E. S. Ranganathan, Director of Marketing; Shri. M. V. Iyer, Director of Business Development. The flow of events for today is as follows. First, I would request Shri. Manoj Jain, CMD, to give an opening remark, subsequent to which there will be a brief presentation by Shri. A. K. Tiwari, Director of Finance, sharing the financial highlights. And then the floor will be open for Q&A thereafter. Without much of a delay, I hand the floor to Shri. Manoj Jain, CMD GAIL. Over to you, sir.

Thank you, Mr. Harsh. My dear friends from investors and analyst community; Mr. Harsh Dole from IIFL and my colleague directors, a very good afternoon to all of you. I hope that you and your families are keeping safe from the impact of second wave of COVID. As you all know, yesterday, we have declared financial results for the financial year 2021. And the stand-alone turnover, PBT, and PAT stood at INR 56,529 crores, INR 6,386 crores and INR 4,890 crores, respectively. On details on the financials will be shared by Shri. Tiwari sir, our Director of Finance. And I would like to just briefly touch on the main activities which GAIL has undertaken in the last financial year and how we have contributed towards the society in this pandemic times. GAIL runs its various flagship programs under CSR like GAIL Ujjwal, which is education centric, GAIL Kaushal, which is a skill initiative; GAIL Arogya, which is health and sanitization. The total spending of GAIL on the CSR projects in 2021 was INR 145 crores. In this battle against the COVID-19 pandemic, GAIL took various initiatives, including contribution of INR 50 crores to PM CARES Fund by the company and INR 3.5 crores by GAIL's employees. Further projects worth INR 30 crores undertaken towards elevation of COVID-19 by providing medical equipment to hospitals, setting up of 12 PSA oxygen plants, oxygen cylinders, oxygen concentrators. During these times, though, it was tough to move in the field, but it's still the GAIL team took this challenge. And during this year, we have 2 major inaugurations and completion of major sections of pipeline, 1 of which was the Kochi to Mangalore section of 450 kilometers, which was rightly inaugurated considering the importance to the nation by -- to -- by Honorable Prime Minister on 5th of January 2021. The second project was Dobhi to Durgapur pipeline section of 350 kilometers, which was also dedicated by the Honorable Prime Minister on 7th of February 2021. In addition, we have also commissioned 175 kilometers of Vijaipur Auraiya Pipeline during the last year. And we have also connected the tie-in connectivity for ONGC's Madhanam Gas, which has been now supplying gas to the southern region in Tamil Nadu. Total around 1,000 kilometer worth -- 1,000 kilometer length of project pipeline projects were commissioned during the 20-21 years. As of now, currently, we are executing total 71 projects, big and small, at an estimated cost of INR 47,500 crores. During the past year, we have lowered the pipeline, which is a significant parameter knowing the progress of around 937 kilometers of gas pipeline. We are also focusing on development of National Gas Grid with around 8 pipeline projects of total length of around 7,500 kilometers and a cost of around INR 36,400 crores, which are under execution. Similarly, we are also working on 2 projects and we are under progress worth INR 10,000 crores, one of which is expansion in the Pata for 60,000 tonnes polypropylene plant and another is a new plant of 500,000 tonnes per annum PDH/PP petrochemical plant at Usar. On the City Gas front, GAIL group of companies have made domestic PNG connection of 10.10 lakhs, which is highest ever done by our group. And also, it is almost 80% of the total national progress, which was done in the D-PNG section. Similarly, on the CNG stations front, our group companies stood -- till we have made 341 new CNG stations, which is 33% of the total CNG stations made in India. Apart from this, we are also in the current year, focusing on new business opportunities wherein -- under the aegis of MoP&NG, GAIL's management has given a thrust to expand into the area of compressed biogas, ethanol 1-G refinery and renewable energy. And GAIL is undertaking several initiatives to diversify in these areas. Under the compressed biogas projects, we have already signed an agreement with the Ranchi Municipal Corporation and we will be laying a plant from municipal solid waste to natural gas, and the license agreement is for 22 years. Similarly, we are also looking at some other cities in this regard from municipal solid waste to compressed natural gas. We have also started an expression of interest to seek partners for ethanol refinery so that we can also be part of ethanol blending program of the Government of India, which is now new lucrative area, which has been opened by government for all the players. Similarly, we are also looking at various organic and inorganic opportunities in the renewable energy business, for which also we intend this year to bid for many of the organic opportunity. And as you all know, we have already an MOU with BHEL, so along with BHEL's partnership, we will be bidding for those opportunities. With this, I'll end here, and I'll request our Director of Finance to kindly share the details of the financial results, which we have declared yesterday. Thank you.

Thank you very much, sir. Respective Chairman; Director, Marketing; Director, BD, OICs and HODs from various sites of GAIL; Mr. Harsh Dole from IIFL and my dear friends from investors and analyst community connected through WebEx, a very good afternoon and welcome to GAIL's analysts and investors meet to share the FY '21 results. I would like to thank you all for taking out your precious time and showing keen interest in the result and performance outlook of GAIL. Last year, when we had our analyst and investors meet, well actually due to the outbreak of the COVID-19 pandemic, we were very hopeful that the things will normalize and this year we will be able to meet you personally and have the analyst meet at Mumbai. In fact, things had started to improve, but then second wave of COVID came in. I hope that you and your families are keeping safe from the impact of second wave of the pandemic. GAIL has also taken a host of measures to support its employees and society to combat the COVID-19. The company is consistently working in tandem with the objective of Government of India towards economic development and achieving Atmanirbhar Bharat Mission. We have declared the results of fourth quarter and the year 2021 yesterday. Before getting into the results, I would like to share with you some of the highlights and achievements for the year 2021. GAIL in the month of March '21 has successfully concluded its maiden buyback of 6.98 crore share at the rate of INR 150 per share amounting to INR 1,046 crores corresponding to 2.5% of the net worth. GAIL has paid total interim dividend of INR 2,238 crores at the rate of INR 5 per share during FY 2021. GAIL has received NIL comment from CAG for accounts 2019, '20, and this is the 11th year in row. GAIL has owned second position under the category, manufacturing public mega and GAIL Jamnagar Loni pipeline won first position under category, transportation and logistics in 17th National Award for Excellence in Cost Management 2019, organized by the Institute of Cost Accountants of India. GAIL emerged as a winner in the Investor Relations towards 2020 under the category of ESG Disclosure. This award is a testimony of the GAIL's efforts in maintaining and improving its Investor Relations. We will continue with our endeavor to make our IR program, one of the best in the industries. GAIL has also received the prestigious Golden Peacock Award for Excellence in Corporate Governance for the year 2020. GAIL has applied for the settlement of Direct Tax dispute of 21 years under the Vivad Se Vishwas Scheme and the department has accepted GAIL's application for all 21 years, and this has resulted in reduction in the contingent liability to the tune of INR 2,000 crores. I would like to inform you further that GAIL has taken various measures to reduce its financing cost which resulted in reducing the effective long-term borrowing cost at -- to 5.2% in March '21 from 7.94% in 2019. As our Chairman has already informed about the... [Technical Difficulty]

Ladies and gentlemen, there seems to be some technical issue. Just bear with me for a minute.

And the quarter ending 31st March, 2021. The COVID impact of the physical performance was mainly seen in Q1. And from Q2 onwards, the physical operation of the company has started improving. However, due to loss of production and sales in the earlier part of the year, the physical performance of the company in FY '21 is lower as compared to 2020, which is marginal. To talk about the polymer production, it stood against the tide. And despite the disruption in the production and supplies in the earlier part of Q1, GAIL not only surpassed last year's level, but also exceeded 100% capacity utilization on a full year basis. This is an excellent performance by the petrochemical plant. Gas marketing stood at 89.2 MMSCMD in FY '21 and the GAIL natural gas transmission stood at 104.2 MMSCMD in FY '21. The capacity utilization decreased to 51% in comparison to FY '21, which was 53%. The polymer production stood at 813 TMT in FY '21. And this is the highest ever production achieved by our petrochemical plant. So this was the physical highlights. Now I will give you the financial highlights. GAIL achieved gross turnover of INR 56,529 crores in the current year as against INR 71,730 crores in FY '20. There is a decline of 21%, mainly due to the decline in the natural gas marketing and transmission volume, lower LSC quantity and lower prices of natural gas. PBT stood at INR 6,386 crores in FY '21 as against INR 7,943 crores in FY '20, which is decrease of 20%, and PAT was INR 4,890 crores in FY '21 as against INR 6,621 crores in the previous year. These are mainly due to the lower gas marketing spread and various other factors taken together. Things have improved in the current scenario now, and GAIL marketing segment has improved progressively in Q3 and Q4. So far as the quarterly performance are concerned, GAIL clocked turnover of INR 15,472 crores in Q4 in current year as against INR 15,386 crores in Q3 FY '21, increase of approx 1%, but the PBT stood at INR 2,612 crores in Q4 FY '21 as against INR 1,868 crores in Q3 FY '21, increase of approx 40%. Mainly due to a higher price realization in the petrochemical, LSC, which was -- which has contributed 10,000 per metric ton. GAIL registered PAT of INR 1,908 crores in Q4 FY '21 as against INR 1,487 crores in Q3 FY '21. So far as the consolidated financial results are concerned, the turnover stood at INR 57,208 crores, PBT INR 7,725 crores and PAT INR 6,136 crores. During the year, GAIL sourced and handled 119 LNG cargoes out of which 83 cargoes were sourced from U.S. and total 35 cargoes were sold in the international market and remaining were brought to India. On CGD front, GAIL is supplying gas to all 6 CGDs with infrastructure of 78 CNG stations and having 130,000 approx PNG connections. Cumulative CapEx is spent on GAIL's CGD INR 750 crores. So far as the GAIL Gas performance are concerned, the turnover stood at INR 4,015 crores and PBT INR 213 crores and PAT INR 157 crores. GAIL along with JVs and subsidiaries have added 87 new CNG stations and nearly 187,000 of PNG connections. Just to give an overview of the BCPL, our subsidiary at Assam, the plant has operated 106% of its capacity. And during the year, the revenue from operation was INR 2,903 crores and the gross margin INR 1,427 crores, net worth of the company is INR 2,073 crores. So the BCPL plant at Assam is now stabilized. NTPC and GAIL, I would like to tell about the Konkan LNG, NTPC and GAIL has executed share swapping agreement. Post share swapping agreement, GAIL's equity shareholding in KLL has increased to 92.15%. And the KLL also has the cash profit of around INR 120 crores. We have also awarded the job of breakwater and that is under execution. So far as the CapEx is concerned, this year GAIL achieved CapEx of approx INR 7,000 crores, mainly on pipeline equity contribution, operational CapEx. And we have a plan of this year, '21/'22, around INR 7,000 crores, '22/'23 approx INR 12,000 crores and next year to that is around INR 9,000 crores. As our Chairman has already highlighted about the project, I would just give an overview of that. On the Pradhan Mantri Urja Ganga, the total commitment of that is around INR 14,700 crores, and the actual CapEx is INR 11,300 crores. We have been receiving the capital grant from the government regularly and till date the total capital grant we have received is around INR 4,487 crores. As a part of National Gas Grid strategy, the total -- the GAIL along with JV is executable pipeline to the extent of 7,500 kilometers, having the total CapEx of around INR 37,000 crores. Just to give a brief of the pipeline, Srikakulam-Angul pipeline 744 kilometers, INR 2,700 crores completion by July '22; Dhamra-Haldia 253 kilometers, investment of INR 1,200 crores completion by November '22; Mumbai-Jharsuguda 1,755 kilometer, INR 7,800 crores completion by May '23, and like that, we are also executing all the projects which are on hand. The work on these pipeline is progressing at a good pace. ROW allotment from Maharashtra State Road Development Corporation for 700 kilometers for Mumbai-Jharsuguda, Mumbai-Nagpur pipeline has also been received, and we are on the fast track. These pipelines will not only help to complete the National Gas Grid and bring the North East in the pipeline network of the country, but also help in achieving the Government of India's target to increase the National Gas share in the energy basket to 15%. In addition, GAIL is executing PP project at Pata and Usar, total cost of which is around INR 10,000 crores. So far as the safety are concerned, we have 0 major reportable accident happened during the last 4 years. And we are also monitoring and keeping all our SSC performance and all our installations are working in -- safely. GAIL has taken various digital initiatives like introduction of the digital worker for its robotic process automation, digitization of contractor invoicing processing, digitization of the employees' payment, et cetera. So this has given a boost to the Digital Yatra. So that was the brief introduction on the financial results and highlights of the company. GAIL's Chairman and the management team is present here and would be happy to clarify on any points that you may have. Over to you, sir.

Sir, thank you for a very detailed presentation. I would open the floor for the Q&A.

[Operator Instructions] First question is from Amit Rustagi.

Okay. Thanks, Harsh. Sir, good afternoon to the management of GAIL. Sir, I have 2 questions. One is relating to your renewable energy push. So could you elaborate to the CapEx plan on the 400-megawatt solar and biogas. So what is the CapEx outlay, which we are thinking over next 1 or 2 years and over next 4 to 5 years? That's my first question.

Yes. Thank you. Regarding compressed biogas, the initial plant, which we have already ordered, and it has -- the work has started that will -- it's a small one and around INR 30 crores is the CapEx outlay for that and that will be the first sample for 5 tonnes per day. And we are expected -- expecting that in the -- this year itself, we'll award another CBG plant, which will be at the CapEx of around INR 50 crores to INR 60 crores. And then based on the progress with the various municipal corporations, we can further do it, but that is not a constraint. Similarly, we are also executing the CBG plants where we are arranging the marketing agreement with the manufacturer of the CBGs, and these are -- these will be the private entrepreneurs. And our City Gas companies will be buying that natural gas from those entrepreneurs. And GAIL will be implementing a synchronization scheme of this natural gas, which is produced from CBG with the City Gas, which is being brought through the domestic gas. So we will be mixing and synchronizing both the gases and supplying to the individual CGD companies. So that will not be any CapEx related work, but it will be mostly expansion of the gas-based economy. On the renewable side, our targets are that we can -- we would like to be a 1 gigawatt solar and wind, both together or any other renewable part in next 3 to 4 years. And towards that, we are doing both inorganic and organic efforts. And accordingly, with 1 gigawatt aspect we have got around INR 4,000 crores to INR 5,000 crores of which we can do the CapEx on that part. So that also is not a constraint. And as you know, our debt equity ratio is very low. So arranging money is not a problem, if we get good projects, we can even exceed this target.

Okay. And sir, my second question relates to the pipeline CapEx, which we are doing. So we have now big expansion plans in the pipeline segment. But could you guide us for the volume expansion also? Because for the last 4 years, the volume -- transmission volumes of the company are flat. And probably, if you look at the India landscape, we have lost market share to the other transmission companies in the country.

On the transmission front, I think the market share remains static. You're right, but we have not lost on the market share on transmission part. As a whole, the country's consumption has remained static because -- largely because of the COVID impact last year. And first quarter was almost a washout for City Gas companies. So there used to be a very big demand, which we could not cater because the vehicles did not run on at least in the first quarter. So this year onwards, we are expecting reasonable growth, and we expect that CGD sector alone will give a 6% to 8% growth in the near future. And overall, in the pipeline segment, we are looking at a growth of 7% to 8%, at least for the next 3 years. And then there will be further jump on this growth than new these fertilizer plants as well as new refineries will be added in the transmission segment and when the National Gas Grid in next 4 years or so will be completed and the total network will be around 34,000. Then definitely, the numbers are bound to increase, even more than 6% to 8% growth.

So this means we should see 9 to 10 MMCMD volume growth over next -- every year from here. So we are at 108 and 109 right now. So for next year, should we expect 119 to 120?

Last year was 104. So definitely, 114, 115, we should definitely expect, and it could be, if there is no further disruption then it could be better also. But in the month of April, we have seen and in the till mid of May, there was some 10% to 15% reduction, but now it has been made up. And we are back on track. And if you look from today or yesterday, it is around 110 in gas pipelines. It is already growing.

So next is Probal Sen.

Am I audible?

Yes, please.

Yes, yes. Just give me a second. Yes, I had 2 questions. One was with respect to this quarter and basically, the outlook in terms of petchem, what sort of realizations are we actually seeing? I mean, what's the outlook that we see in terms of any further improvement in pricing? Is that a possibility? Number one. And secondly, since we have already achieved a very strong utilization already in FY '21, without the expansion projects that was just spoken about, is it possible to push utilization even further from current facilities? Or we have to wait for the new additions to come through for any volume increase beyond the 813 odd that you've already done in FY '21? That's my first question.

Yes. As far as the petchem numbers are there, you rightly said, the capacities are almost to the full, both BCPL is operating at 107% and Pata is also operating at 103%, so without the new capacities, there will not be significant change in the capacities of both the plants. As far as the pricing part is concerned, we are seeing a substantially stable pricing regime now and which is in -- as compared to previous year, it was better in the Q4. And in Q1, also, it is a little bit -- slightly down, but is still better than the last year's numbers. But Q1 numbers will be slightly lower because we have taken shutdown in our Pata plant in the month of this mid-April to end of the May and so. So probably the numbers in this quarter will be lower. But then once the plants are coming back by 15th June, both the plants will be on full load. So then our numbers are going to be similar to the previous year. And in total, this 810, 815 is feasible.

Okay. And the second question I have was with respect to the CapEx. Tiwari-ji, already gave a fair detail in terms of at least 3 of the pipelines that are on the anvil, which is Srika-Angul, Dhamra-Haldia and Mumbai-Jharsuguda. But if I add up the CapEx of the 3 that was mentioned, sir, that is around INR 10,000-odd crore. So this INR 37,000 crore CapEx that's been mentioned, that is inclusive of any pending CapEx on the eastern grid or any projects we are missing, sir?

Yes, there are major projects, new projects, you rightly said, these are the 3 new major projects, one is Mumbai-Nagpur, another is Srikakulam-Angul and third is Dhamra-Haldia. These are the 3 new and entire CapEx is -- their entire CapEx has been considered. For the Jagdishpur-Haldia, this INR 36,000 crores includes the CapEx, which have been done already. So that INR 11,000 crores which we have done, it is included of that. Apart from this, we have got Kochi-Koottanad, this Tamil Nadu section is balanced. There another INR 1,000 crore CapEx is there. And then we have got Sultanpur-Jhajjar-Hissar pipeline, the Haridwar-Rishikesh-Dehradun pipeline, then Vijaipur-Auraiya balance portion. These are the major pipelines. And then small connectivity pipelines are also there. So total, including what already has been spent, these total projects together account for the INR 37,000 crores.

So in addition to that, around INR 10,000 crores of the petrochemical plants which are there in Usar and our Pata plant is there. So INR 10,000 crores more will be there.

Total will be around INR 47,000 crores.

INR 47,000 crores.

Yes, I got that. I was asking for the INR 36,000 crores only, sir. Just on the petchem, the INR 10,000 crores, one last question if I may, what are the timelines for completion that we are looking at, sir, for both the projects, for completion?

We are looking at the timelines in '23, '24. So the -- I think if I remember correctly it is June '23? September '23 is the target date for completion of the project, then another 2, 3 months for commissioning. So maybe end of '23 or maybe January '24 or so.

That's for both the? That is for both Pata as well as the Usar plant?

Yes. As on date, we have all the licenses are in place, and the basic design and engineering part is almost at the final stages of finishing. And some of the enabling contracts have been awarded. So there's substantial progress as our DF also told next year's CapEx largely consists of these 2 projects.

So next, we have a question from Rakesh Sethia.

I had 2 questions. First one is on the EBIT. I believe there was a comment in media where our company seems to be considering putting 2 pipelines in the InvIT structure. So if you can share a thought process around this thing, how will that help the company? And are you expecting that before the InvIT happen, are there any reforms, either on the price or the tariff side required before the InvIT connection to be brought to the market? And the second question was on the petrochemical CapEx, though the timeline is '23, '24, is the feedstock availability in taking care of, especially for the PDH plant for which I believe there is a large CapEx being considered?

The Usar plant will be running on imported propane, for which the propane is available on the market and we are making a tie-up for that, which is on the no long-term tie-ups are required, but we are already doing along with the other OMCs, we can look for that. And the imported propane is the feedstock. For the Pata projects, whatever is coming out of the Pata, the propylene that will be used as a poly -- for converting it to polypropylene. And regarding InvIT part, as -- yesterday also we informed that as announced in the budget, 2 of our pipelines will be market tested for the InvIT. And for which we have sent our proposal to our ministry and then once we get the necessary approvals, then we will start working on that. And we expect that no significant changes in the regulatory and other listing are required. But some of the approvals definitely will be required from the regulators, like PNGRB and all this direct tax this thing and then also SEBI and all those. But those are the routine approvals, which we expect that once we are ready should come.

If you can share, which are these pipelines, if you can share if it is possible?

Probably at this stage, we'll not be sharing. But once we get the approvals, then those 2 will be frozen.

Okay. Understood. And on the PDH project, would it be possible for you to share some of the economics considering it's based on import of propane converting into polypropylene and probably will be selling, either in the domestic market or exports, if you can share how the economics is working for this particular project? How lucrative this project has appeared to be for the management?

This PDH-PP is the first plant, which GAIL is installing in the country on this technology. It is propane dehydration unit and then from that propylene, we will be making polypropylene. And as of now and what we have seen, it is a robust model where the crack available is a very robust crack. And it gives returns much above the -- our threshold hurdle rate.

Sir, there is a question in the chat bot. I'll read that off for you. It's come from Mr. Parth Parekh, what is the outlook on gas marketing margins in FY '22? And what is the transmission volume CAGR that you are eying over the next 3 years?

Can you speak a little louder about the second question?

So what is the gas transmission volume CAGR that you're eyeing in next 3 to 5 years? That's the second part.

Regarding the gas transmission volumes, I already responded. 6% to 8% is the CAGR, it is expected. and after 3 years, it is going to increase further from this number. And regarding the first, it was marketing.

Outlook on marketing margins in FY '22?

Yes. Marketing margins, as we all know, are the vector of the international prices. Definitely, it is very difficult to predict them. But as we now -- as of now, the futures available, we feel that, that will be much better than the year of 2021.

So next, we have Vidyadhar Ginde.

Yes, I think it's unmuted. Can you hear me?

Yes. Go ahead.

Yes. So my first question was on the gas marketing side. So if you could give us some color on how much volumes you have already tied up for FY '22 and FY '23. And so another related thing is that for example, in the first year when you started LNG imports from the U.S. in FY '19, in some -- on some volumes, you had already booked it at no profit, no loss in the earlier year. Is there something of that sort which has happened because we've come from a very bad environment at some stage in the last year to gradual significant improvement. So have you locked in some volumes when margins were there are no profit no loss or the profits were much lower than what it would be at today's futures?

Regarding the demand part, which you said, as DF has already said that the contracts are already in place, worth 11-12 MMCMD. He has already explained about the 3 fertilizer plants, plus Matix plus RFCL. And we expect that at least 3 out of the 6 plants, 3 plants will be coming this year online and 3 maybe next year. So that's the number which we are looking at this year and next year for the major consumer. Apart from that, we are also looking at few 5 to 6 MMCMD of additional demand. From the -- some of the expansions -- at the same time, some of the expansions of pipeline and the new areas where the gas will reach. On the transmission side, we are also looking at numbers from some of the refineries, which we'll have to see how the tie-up takes place.

Sir, my question is more on the marketing margin side. As to -- given that we've had prices, the oil as well as spot LNG from very low levels going up to much higher levels now. And so have you locked in margin, at what stage have you locked in margins? So what is the kind of outlook one can expect in FY '22 and '23? And what proportion of FY '22, '23 U.S. LNG volumes you have tied up already?

FY '22, I can say around 80%, we have tied up and 20% we have directly capped open to take advantage of the price valuation for trading purpose and also looking to the upcoming consumers. Most of the volumes which are coming to India, we have tied up with a positive bias only. So that should not be a problem. In FY '23, we have got in U.S. volume around more than 50% has already been tied up and remaining also, some of the volumes have been tied up, but the price is not fixed. And remaining 30% to 35%, definitely, we will go as we go ahead, we will be tying up. But overall, if you look then, it will be slightly lesser than 20% of the total volume of LNG which is coming to from our portfolio.

So would you have record gas marketing EBITDA in the current or next year even better than your first year when U.S. LNG came in given where the futures are trading today or, in fact, for the last few months oil prices have been at elevated and so have futures been. So is there a decent probability that either FY '22 or FY '23 could have your record EBITDA.

I cannot guess because I've not calculated that number. So the record word may not be correct. But yes, one is that from last year, it will be much better. Number 2, as you know that some of the volumes we have tied up earlier also. So those volumes may not touch what today what prices we have seen. But definitely, what we have tied up in the last 2, 3 months, those will give us good margins. So from that perspective, this year, we expect it to be a very good year, but record word I may not be able to confirm as of now.

Vidyasagar-ji (sic) [ Vidyadhar-ji ] just to give you a perspective, we have with the current prices which are there as well as with the consumption, which will be there in the country in the coming period with the fertilizer and others, we can assure you that there will be good -- better margin going ahead.

Lastly, just how much of your volumes, LNG volumes, are likely to be sold in the domestic market and how much outside in the current year? And how much likely in the next year?

This year, we have sold around 35 cargoes in the international market. These cargoes will slowly be tapering down when the consumption in the country will increase. So that way, it will be in the consumption in the country more and there will be some strategic sale in the international market, depending upon the cargoes as well as the market. So that we can't give you any specific number at this stage. But these are the strategies as we have explained to you a number of times.

Actually, in addition, we will have more cargoes also this year because our portfolio will also increase. So it is not that we are looking at just diversion from international to domestic, but number of cargoes will also increase.

So while I take the next call, we have a question which I got that comes from Kunal Agarwal. His question is gas transmission margins were very strong in 4Q, which probably were also due to surge in LNG prices due to Texas Freeze. Can you share some insights on what was the positive carry on margin due to surge in gas prices?

I think if I understood it correctly, primarily, they are asking about our marketing margins on the gas.

That's right.

So as I explained in previous question also, primarily, it is going to be better than last year. But many of our Indian consumers, we have fixed marketing margins. And whatever is the price is the pass through. So there, we'll get that fixed marketing margin. And some of the areas where we sell in spot are also short term and midterm, we will have better margins in India. Similarly, for whatever the sale in the international market, if you look present, this thing crude price as well as the HH number. So we expect that in this period, what we are selling, they will get better margins. But at the same time or whatever, we have already fixed in previous year for this year. The margins are already locked.

Got it, sir. Next we have got Nafeesa Gupta.

Can you hear me? Am I audible?

That's right.

So sir, my question firstly is on the status of the Urja Ganga pipeline. So are we on track with Section 2 and 3 being completed in December '21? And related to that, could you also give us the detailed offtake of fertilizer plants currently? And are you seeing any kind of reduction due to higher LNG prices there?

Can you just repeat a little louder? I do not get the first question.

Sir, my question is on the status of the Section 2 and 3 of Urja Ganga pipeline, which is to be completed by December '21. So are we on track for that completion by December '21? And also the detailed offtake by the fertilizer plants, which we are seeing currently. Is there any reduction due to the increase in LNG prices? Are we seeing some stress there?

Yes. The first one is that we are on track for December '21 for all the sections, except from Durgapur to Haldia, where we expect some delays due to some ROU-related issues in West Bengal part. Remaining of the sections, we are on track for December '21. But as of now, if you look from the Durgapur-Haldia section, no significant consumers are available on this section. So from the capacity -- utilization-wise, it will not be affecting in this year, at least significantly. Regarding the second part is the fertilizer part. There is no stress. In fact, the fertilizers are running at more than the 100% capacity most of the fertilizer. And we expect that the same trend of better utilization of fertilizer plants will continue. And our gas, wherever we have contract, they are taking in the full measures.

Also, could you -- is it possible to give a breakup of the offtake by the fertilizer plants?

Breakup wise in the new pipeline, if you remember, there are 3 HURL plants. Gorakhpur has started already taking for commissioning, and we expect that by July or August, they will start their final commissioning. And they may come on full load by August or September. For the second plant of Barauni and then Sindri, there are minor -- some delays. And maybe we expect that for the commissioning part, they will start taking this -- in this calendar year of '21. And then later on, they will go for commissioning. And on the Matix plant, they are almost -- pre-commissioning they are doing. And maybe they expect that in a month's time, the commissioning activities will be over. And then maybe after that, in the month of July, they can start drawing gas in a significant number and then slowly ramp up to full capacity. And on the -- I mean, this is about the Jagdishpur-Haldia part and on the southern part, already MCFL has started drawing. And the MRPL and OMPL are also slightly drawing. And they will also further increase their drawl on the southern part.

And sir, if I may, in this quarter, the LPG production volumes are lower. And what is the status on that currently? Any color on that?

Yes, LPG production is actually -- our capacity is limited, and we are running near to the full capacity. And secondly, it is also dependent on the quality of gas, which we receive in terms of richness of propane and butane from the domestic gas. So there is some minor fluctuation which takes place. And there -- in this Q1, there might be some reduction in the production number because of some lean gas, which received in the intervening period. However, largely, this will be a variance of 10% to 15% sort of.

Next, we have Mayank Maheshwari.

Just a couple of questions. The first and foremost, on a bigger picture perspective, government has been focusing a lot on hydrogen-based CNG and hydrogen as a fuel as well. You talked about ethanol, you talked about renewables. Is there a plan around hydrogen as well from a GAIL perspective over the more medium term?

Yes. And that is definitely -- it is there. And also, it is being pushed by our ministry also. And we are primarily looking at injection of hydrogen into the City Gas networks, whether it is feasible and to what extent it can be done. So the technical pilots we are looking at now. So it will take some time to establish those technical pilots and then probably improve upon that. But as you know that in -- IGL in Delhi, already HCNG there -- had one CNG station from where at least 50% are already running on that HCNG, where the IOCL's technology is being used for the hydrogen generation. And then it is mixed with the CNG. And those buses are running exclusively as a pilot project. And similarly, we are also looking at how we can use the green hydrogen by producing from the renewable sources and then utilizing it in producing hydrogen. And then utilizing along with the mixing with the natural gas. So these are all at the pilot stage. So definitely, as you rightly said, in medium term, there may be something which will be coming.

Sir and just a follow-up on this one was, in terms of your new infrastructure that you're developing, is it fair to say that you are looking at to make it hydrogen ready?

Mayank, can you repeat the question, please. We didn't hear you well.

Sure, Harshavardhan. Just as a follow-up on the hydrogen question. Is it fair to say, sir, for the new infrastructure that you're developing, will it be hydrogen ready in terms of your new pipelines et cetera?

It is too early to confirm that because it will need several approvals from regulatory authorities. And also, we have to test it. So once we do that, those pilot testing and then submit our results to regulatory authorities, then probably, it will be confirmed, but yes, we can do that. So we'll look from that aspect, but maybe it will take some time.

Next we have S. Ramesh.

If you look at the Kochi-Mangalore pipeline, there was a temporary hookup. So what is the status of the Kochi-Mangalore pipeline? Is there a final configuration done there? And can you share with us the plans for the Kochi-Bangalore pipeline, when it will be completed?

The work on final hookup is in progress. And already pilot and everything is done, and final stages we are doing. But since monsoon has arrived, so I'm expecting that by October or so, we should be in a position to finish it. If the monsoons interrupt, otherwise, maybe in a month's time, we can finish. That is about that. And remaining part of Tamil Nadu, we are pursuing with the Tamil Nadu state government, and we are moving ahead. But although the speed is not what we expected, but we are slowly, slowly progressing towards Tamil Nadu. And Coimbatore, we expect to connect very soon. And we have all pipes have been ordered, and they are at site. Contracts are in place. So that should not be a problem. But depending on the progress of opening up right of use or right of way, the progress will take place. So the exact timing will be difficult to tell. But if we get the approvals in time and the ROU opening, then maybe in next 18 months, we can complete the Tamil Nadu section also, 12 to 18 months or so, depending on the progress.

So if I understood you correctly, you're talking about the Kochi-Kuttanad-Bangalore pipeline being completed in 18 months. And at Kochi-Mangaluru stretch, which was initially hooked up in the temporary line, that is now getting completion sometime during the next 2 quarters. Is that correct?

Yes, that is correct.

Yes. The second thought is, if you look at GAIL Gas, while on the top line, you have been performing okay, the bottom line margins are that 3%, 4% range. So when do you see GAIL Gas reaching financial performance in terms of margins and returns similar to, say, Manav Gas or Indraprastha Gas? Is there any constraint in terms of scalability of the market? Or do you need to make any additional investments? What is the challenge there?

As such, there is no significant challenge that we expect to improve. Only, there are 2 aspects. One is that we are spending a lot on CapEx in the new GAs. As you know, new GAs take at least 2 to 3 years to become profitable. So that is one area. And second will be area of Bangalore. Bangalore has not come up the way we expected initial 4, 5 years. But once Bangalore, at least the state buses or the major vehicles pick up, then certainly, it can come up very fast. But that is where we have to make efforts. Infrastructure is almost ready in Bangalore. Now we have to create the demand. And maybe in this year, we were just -- our revenues were, I mean, profit neutral in Bangalore. And in the coming year, we expect that it will turn into a profitable city. And then the progress should be faster.

Okay. And just one more thought. If we look at your overall investments on the gas pipelines, when do you see the aggregate capacity utilization reaching the normative level of 75%? At that level, I would presume you will be able to improve your returns on your transmission business to be normative 12%. So when do we see that happen? Today, it's only about 53%, which is evident in the ROE. In the pipeline business, it's close to 10%.

I think it is around 4 to 5 years from now, definitely, we should be in a position to see. As I told you in the beginning also, we are expecting a growth of 6% to 8% in -- for the next 3 years and then a better growth. So from that perspective, also, if you look then to reach to a 75% sort of number, it should be 4 to 5 years depending on the major customers, how they are on track or they are -- are they delayed. Primarily, there are 3 sectors. One is the CGD sector. Many of the CGDs have come up. So we expect that already 2 years have passed. So next 3 years, they should pick up significantly, and most of them are committed on our pipelines. Second is the refinery sector. Most of the refinery are undergoing for the conversion to the gas-based -- manufacturing of gas-based areas. And the third one is the -- even some of the petchems are also coming along with the refineries. There also, gas requirements will be there. And apart from this, the fertilizer plants are definitely going to come in next 2 to 3 years, all of them. So from that perspective, the 75% number should be achievable in the next 4 to 5 years.

Okay. Just one last thought. Can you share with us any inventory gains you may have had in the gas marketing business in the fourth quarter of FY '21?

I think the domestic prices are almost unchanged. So there is no change in the inventory valuations. So as such, it might be there, but it will be only INR 1 crore or INR 2 crores or INR 10 crores, very small number if it is there.

So While I take the next question, there are a few interesting questions in the chat box. One is a question from Mr. Prashant Vaidya. Is there any plan to list GAIL Gas on the exchanges? And if so, what are the time lines?

As such, there is no finalized plan to list GAIL Gas as of now.

Okay. Second is basically a question from Mr. Kirtan Mehta. And his question is, could you please share your latest OpEx expectations from fertilizer plants which are under execution?

Yes. As I think I have covered in the earlier question, I can again repeat. Gorakhpur is one of the HURL plant, which has started drawing for commissioning purpose. And we expect that by August, September, they may come on full load. For Barauni and Sindri, they will start drawing gas for commissioning purpose by the end of this '21. And then later on, they can come up for -- with full load, 3 to 4 months or so. And Ramagundam has already started drawing almost full. There was some set back in between, so now again, it will come up. Matix, as I already explained that they are in the pre-commissioning stage. And maybe by July end, they will be in a position to draw to a significant number.

We'll take the next question from [ Jatin K ].

Hello, am I audible?

Yes.

Sir, my question is regarding CNG stations in Bangalore.

[ Jatin ], can you be a bit louder? Now your voice is coming very feeble.

Sir, my question is regarding CNG stations in Bangalore, which we are doing an agreement with Confidence Petroleum. So I wanted to know what are the gas price in terms of I think -- what price gas will be -- we will be supplying to them? And what is our expectation on volumes?

Well, the exact number, it will be difficult to give. But Director of Marketing will touch upon the thing. And for the consumer, the ultimate selling price will be same. But regarding the agreement, our Director of Marketing will give some details.

Yes. As he said, the selling price of CNG is fixed. For the whole of the city that will be same. Plus this is a dealer-owned, dealer-operated model, so there we have a specific commission system. So we will be paying a commission to them per kg basis. And then the gas -- our gas will be sold by him and then we will collect the revenue from them.

And sir, that commission would be, say, around INR 10 per unit? Or it would be a bit -- any number you would like to comment on that?

No, I can't say right now. It varies. And it varies from station to station also, depending on location.

And any expectation on volume side from those stations?

Yes, of course. We expect that some 20 stations will come online immediately, and that will increase the sale by at least 1 lakh kg per day.

And sir, any reason for choosing Confidence and not doing this on our own? And are we in discussion with Confidence Petroleum or any other player on more such cities?

We are open to all, actually. Our website has a permanent expression of interest. So anybody with land can actually apply and then we will be signing with them also, provided they are not bunched together in one place.

So next, we have Nitin Tiwari.

So my question is related to the petchem project. I hope I'm audible. Yes. So sir, what is the rationale behind diversifying into polypropylene and not basically expanding capacity in the polyethylene itself, in which the raw material is perhaps already there in your pipelines and you just have to expand capacity. So what is the rationale behind getting into polypropylene, for which will you actually have to import raw material?

Yes, there are 2 aspects. One is that the -- for the poly, GAIL's portfolio is polyethylene heavy. So we want to have a balanced portfolio for GAIL, where both polyethylene and polypropylene, we do have portfolio, and we can serve the consumer to its fullest. That is one part. Second, regarding the availability of ethylene for the polyethylene, whatever gas has got primarily as part of whatever is our capacity, almost to the fullest we are able to extract. So from the natural gas, which is available, we are trying to cover more than 90% of that. So remaining natural gas, which is now coming, say, from the Eastern Coast, that is a lean gas. So that has got very low percentages ethylene -- ethane. So from that perspective, we -- even if we go for ethylene or ethane-based petchem then also, we will have to import only.

So but sir, in case of IRRs, both projects would have -- would be having similar IRRs. I mean like both, like you know, had you gone for a polyethylene expansion and vis-à-vis the polypropylene project you're putting?

Yes. Polypropylene, this is the first new technology where exclusively, we are going for polypropylene. So since it is a plant which has lesser byproduct, then more on focus on the main product. So here, IRRs are good that's why we are going for this technology. And the polyethylene which you are talking, Pata is actually, we are utilizing the existing fleet available from the Pata itself. That's why it's a smaller number. It's 60,000 only.

Right, sir. And so my second question is related to U.S. LNG cargo. So is the understanding right that the fertilizer plants, which are coming up on the Jagdishpur-Haldia pipeline, they have all contracted U.S. LNG cargoes. So your cargoes would be getting consumed with these fertilizer plants. Are these exclusively with LNG cargoes? Or there are other gas cargoes also which we have taken.

Actually, we -- as you know, that we have got 2 contracts in U.S. to bring LNG, 1 contract with Russia to bring LNG. And apart from this, we have got through PLL, this Australian Gorgon LNG as well as Qatar. So if you look from this total portfolio, especially the portfolio of both the U.S. and Russian, then this is the portfolio out of which we supply to various fertilizer plants and at different indices. So as such, there is no specific molecule of U.S. or Russia going to a specific fertilizer plant. But our selling price and we back -- the buying price, we are trying to balance.

Understood, sir. And sir, lastly, on your City Gas portfolio. So you have substantial investments in a number of City Gas companies which are your subsidiaries. So given we are considering value unlocking through InvIT in the pipeline business, so any thoughts of unlocking value in your City Gas investments as well? I think you have a portfolio of almost 11-odd companies over there where, if you want to unlock value, that could be substantial in nature.

Yes. We can probably -- immediately, there is no firm plan, but definitely, this is an area where we can think in future when we need money. Actually, now we have very cheap debt available, so we thought of utilizing that first. And value unlocking, at right moment, definitely, even if near future it comes, we will use that right moment to unlock the value.

Next we have Vishnu Kumar.

So firstly, wanted to understand. The Urja Ganga Phase 2 and Phase 3 tariffs, when should we expect it? And in the meantime, how should -- because we're sending a -- shipping a lot of fertilizer gas there, what will be provisional tariff that we'll apply?

Provisional tariff should not be problem because we have got the CapEx numbers so we can easily calculate and apply. And then once the final numbers come from regulator, then we can adjust to -- on the future tariff number. Because now there are no retrospective tariff revisions. So as such, that should not be a problem. When those things come, we should be able to do it.

What will be the rough rate that will apply, sir?

Rate, it is very difficult to tell at this stage. But if I remember, if you look from that perspective, probably, it was in the range of around -- maybe in the range of between $1.25 to $1.50 or something.

And this is including Phase 1, Phase 2 and Phase 3, all 3 put together.

Yes. Including.

Understood, sir. Sir, in terms of our own tariffs, the tax adjustment part is pending. And also, just wanted to understand your thoughts on unified tariff. Obviously, PNGRB, we understand of the lack of quorum. When do we expect some kind of a resolution on this?

On unified tariff?

Yes, sir. And also your own -- all the pipelines, the tax adjustment for the balance for all other pipelines.

For the unified tariff, I think the date of commencement is yet to be notified. So we actually can't pinpoint a number or a specific date when the quorum will be there, and then they will have to work on that. Then after that, it may take few months to come into force after hearing for and working out a methodology among the different players. And we have also submitted some of the suggestions. So really some minor changes may also come up. So all those things are yet to be finalized. Once the quorum comes, then only these things can be confirmed.

And just my last question on the Phase 3, have we signed -- especially in the steel territory, have we signed up any contracts with any of the steel players, the Urja Ganga line Phase 3?

Yes, some of the MOUs and contracts we have signed, but it is not a big number, like that 2 or 3 MMSCMD sort of because their basic process is not changing. On the auxiliary side, they will be definitely to begin with -- take the gas. And slowly, slowly once the gas becomes available and they are seeing the benefits, maybe they can go for expansion and all those things. At that time, the -- more demand may come. But most of the steel plants, we have either MOU or agreement for supply of gas along their pipelines.

Got it, sir. So just to clarify on the Urja Ganga pipeline rate, so let's say, Matix fertilizer is going to receive the gas, which is on Phase 3, Phase 2 rather. So the total tariff will be, the HVJ line of INR 40 and $1.25 of the Urja Ganga line, roughly INR 100 plus. Is that a right assessment?

Yes, that is true. So long as the supplies are from there, it's true. But that -- yes, the number of this $1.25, $1.50 is a provisional number, we'll have to work out.

So we have last 2 questions. We have now Venkatesh Subramanian.

I have 2 questions. So one is a follow-up question on the Confidence Petroleum thing. And that is also related to GAIL Gas. What is your vision for GAIL Gas for the next 3 to 5 years in terms of number of pumps or in terms of top line? Do you think this could be a very big enterprise. That's number one. Number two, the related question is on Confidence Petroleum, which is what is the economics of this? When you actually give out these franchisees, how does the sharing work? Just to get us -- we just want to calculate unit profitability, sir.

Regarding the expansion plans, definitely, as we said that we have already, I think, 9 more deals we have recently won. So definitely, GAIL Gas, we are looking at significant growth. And in terms of CNG stations, definitely, we are looking at least doubling the CNG stations in next 2 years of the total CNG station we have. Last year -- even the last year, when the pandemic was there, we did 75 number, as Director of Marketing has just confirmed. So definitely, this year, we will be doing more than that 75 number, definitely. And next year also, numbers will be more. So that is our objective to further expand, and we expect that there will be a significant growth in terms of not only CNG station, but industrial and commercial and domestic numbers also. And the second part about -- this is a new model, which we are working out for the last 1 year, the dealer-owned, dealer-operated. And that is open to all the GAs. So definitely, it is going to be a beneficial private entrepreneurship entering into a CGD area. And at the same time, we, as the licensor of that GA, will also be benefiting from expanding the footprint of natural gas.

How does the sharing work, sir, in terms of between the franchisees and GAIL?

As the Director Marketing told in the earlier question is, it is a commission on per kg basis.

Okay. Okay. Great. So one last question, sir, which is -- many years back, we actually held some stake in China Gas. Do we still have some holdings there left?

Yes, we have got holdings, and that is giving a very handsome application of investment.

Okay. I hope we become larger than them, sir.

But our share percentage is very small. It's around 2% or so. But still the number-wise, in terms of Hong Kong dollars and then rupees, it is -- the investment is worth around INR 4,000 crores or something. Yes, around INR 4,000 crores.

Yes, that's right. And you divested some in 2013, '14, right.

Yes. After that also, now it is INR 4,000 crores.

Sir, would it be fair to ask -- I mean I know that I'm probing a little bit deeper. But just to understand this franchisee model, when somebody like a Confidence is getting a franchisee for 100, if tomorrow, somebody else applies for another 100, 200, 300, they are open to tie-ups with most people? Is that a scalable opportunity?

As the Director Marketing correctly pointed out, we have to see the overall scope also. Otherwise, actually, if it doesn't make business sense for us and for them, both, it will not be a win-win position, and then it will not be sustainable. So that is the only caveat. Otherwise, we are open to anybody joining us.

So next, we have [ Manish Jain ].

Yes. I wanted to know, are you working on any carbon capture technologies? And if yes, can you share insights on these technologies?

As such, we are not actually working on a research or commercial basis on any carbon capture technology as of now. Though just to give you a perspective, though, we have made some studies in the past from our petrochemical plant, what is our CO2 goes into the environment, can that be captured and brought back? But so far, that has not materialized into an outcome with some numbers or something. But we have done some studies, not any research on it.

And earlier you alluded to in hydrogen. Besides the 50x CNG buses at Delhi, when and where in terms of scope and size of the project do you plan to start technical pilots?

As I said, it is through IGL. It has been done with the IOCL's cooperation with the plant, which has been made near to the -- this Rajghat-Delhi CNG station itself. And that 50 number is a pilot basis. And then after that, ARI will be checking the parts of the buses. What is the performance and all those things. Once that outcome is there then that probably pilot will be completed, and then we'll think of next stage.

Okay. So basically, I just want to know, besides IGL are there any other initiatives on hydrogen that you plan to take on technical pilots?

We are also looking at some of the areas where we can -- how we can inject the hydrogen into the CGD networks. That study, pilot study, we are working.

So I do realize we're on the clock, but there's quite a few questions in the queue. With your permission, can I take the last one?

Yes, please.

Okay. The last one is from Pinakin Parekh.

So basically, my first question relates to the gas marketing segment. Historically, this is a business which gave an EBITDA of INR 600 crores a quarter in FY '19, FY '20, and this quarter, it's INR 300 crores. And you have mentioned about the volumes which have been already booked in. So fourth quarter EBITDA, is that the new run rate we should expect in fiscal '22? Or we can go back to the INR 600 crore-plus EBITDA per quarter that we saw in F '19/'20?

Really a difficult question you've asked. But I can only say that probably the actual answer will lie in between the 2, maybe. But that INR 600 crores number was really very, very ambitious number at that point of time, and the markets are now since in a different mode from the perspective of the -- one is the spot market is not moving in tandem with long-term market. So everything is diversified. That is, spot market does not follow the long term and the supply-demand curve, it is a spot or momentous supplies which are governing that spot market. So from that perspective, those high numbers are really now difficult to achieve. But one good thing is that both crude at this stage as well as the spot are up. So this time, we expect that we have some good numbers should come. But this -- I've repeatedly been telling, and again, I'm just repeating that some of the cargoes we logged earlier, those cargoes will not see these amazing numbers. So overall portfolio wise, we have to have a mix of both the safety as well as improved gains.

Understood, sir. Sir, my second question relates to the CapEx plan that you have announced. Now broadly, if you look at the CapEx that GAIL will incur over F '22 and F '23, how much does the company fund -- expect to fund it via debt given the visibility it has on cash flows, given the visibility it has on InvIT monetization? How much additional debt would the company take over the next 2 years?

Yes. Considering our internal generation, we are expecting to around INR 4,000 crores to INR 5,000 crores each year to meet the CapEx plan. But it depends upon the margins which we have or internal generation. So that range will be around INR 10,000 crores in the coming 3 years. That should be the plan.

And also, if I may add, it depends on how much dividend shareholders expect. So all those things have to be taken into account.

Yes. Sure. Sir, my last question, basically, if I breakdown on the CapEx into 3 parts: One is the pipeline CapEx; the other is basically, the petchem-related CapEx; and the third is basically the CapEx that will be done in renewables and other new businesses. Now the pipeline CapEx comes with broadly an assured ROE -- ROCE, ROE concept. The petchem CapEx will have its own dynamics in terms of the headline commodity prices. But in terms of the renewable energy CapEx, whether it's solar or any other thing, would that have an inbuilt assured ROE when the company is undertaking the CapEx? Or the company's profitability will be a function of how those businesses evolve and how the market evolves.

Actually, in business, nothing is fixed and nothing is permanent. But definitely, our endeavor is that even in for the renewable side also, we are looking at assets, which are -- most of them are having tied up output also. So from that perspective, we expect that the returns will be in a range which is near to our hurdle rate. So there should not be significant worries once we opt for an asset. And that's the reason that probably our portfolio may not grow very significantly, though we would like it to grow because many of the other players can go much, much aggressively. But we would like to strike a balance between our reason to enter into this area, but without sacrificing on our returns.

Understood. This is very clear. Just a clarification to a previous question that was asked on the tax rate and PNGRB tariff resetting. Is it fair to assume, sir, that any tariffs, which are reset going forward whether it is a unified tariff, the Urja Ganga tariff, or the existing tariffs, would have the new corporate tax rate as one of the input variables in PNGRB's calculation?

Yes.

Ladies and gentlemen, we have absolutely run out of time. And I do realize there are a lot of questions in the queue. I would request you send me an email and I will have it answered from the GAIL management, or you could write to Satish Sinha who I am sure will be able to explain the details. But on behalf of IIFL, I would like to thank the management as well as all the participants for logging into this conference. GAIL management, thank you very much sir for giving us an opportunity to host this event. We deeply appreciate. We look forward to continue our interactions. Thank you.

Thank you very much. Thank you, Mr. Harsh for nicely interaction with all our stakeholders and we are very happy and we would like to thank each and every one of you who have spared your time and also given some of the learnings to us also, how we can improve upon further in future. Thank you very much.

Thank you.