Kiri Industries Limited (532967) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Q1 FY '25 Earnings Conference Call of Kiri Industries Limited. [Operator Instructions] Please note that this conference is being recorded. At this time, I would like to hand over the conference to Mr. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.

Good morning, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Kiri Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the first quarter of the financial year 2025. Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would like to now introduce you to the management participating with us in today's conference call. We have with us Mr. Manish Kiri, Chairman and Managing Director; Mr. Jayesh Hirani, Vice President, Accounts and Finance; and Mr. Suresh Gondalia, Company Secretary. I now request Mr. Manish Kiri to give us his opening remarks. Thank you, and over to you, sir.

Good morning, everybody, and welcome to the earnings conference call for the first quarter of financial year 2025. I hope you are all keeping safe and well. Let me first brief you on the financial performance of the first quarter of financial year 2025, followed by the operational highlights. On a stand-alone basis, during the first quarter of financial year 2025, the revenue from operations was INR 168 crores, which grew about 19% on a year-on-year basis, and incurred an EBITDA profit of INR 13.64 crores, including the dividends received from Longsheng Kiri Chemical Industries Limited. The dyes industry is still bearing the brunt of tough geopolitical situation and the gross material margins are yet awaiting recovery to its peak of around 32%, which are currently hovering around 23% to 30%. It has been gradually passing over the increase in raw material prices to its end customers. However, there still exists headroom to increase material margins which shall be attained on increasing in demand, improving product mix and better price realizations for the dyes and dyes intermediates. Net loss post depreciation for the quarter was about INR 2 crores. On a consolidated basis, revenue for the first quarter stood at INR 265 crores, which grew about 17% year-on-year basis, with EBITDA of around INR 18.08 crores as compared to EBITDA of INR 10.93 crores in the previous quarter. A comparative analysis of consolidated gross margins in 3 quarters clearly indicate that the margins are under control within the range of 26% to 30%. Net loss before the share of profit of associates for the quarter, again, was around INR 2 crores. The operational expenses have reduced mainly on account of proportionate reduction of revenue and reduction in legal fees during the first quarter 2025 as compared to preceding quarters of fourth quarter 2024. The consolidated net profit after tax of the company for first quarter 2025, amounts to INR 78.19 crores, including share of profit of DyStar amounting to about INR 80.5 crores. It is important to highlight that the share of profit of DyStar is not relevant anymore for the company because of the Singapore court orders. Now with regards to the update on DyStar case, the judgment of SICC on May 20, 2024, with regards to enforcement proceedings wherein enbloc sale of DyStar been ordered by SICC without a reserve price with long-stop date for enbloc sale decided as December 31, 2025, and the company to receive $603.8 million in priority and the balance amount of sales proceedings of DyStar to be received or to be paid to Senda. The company has filed an appeal against this SICC order dated May 20, 2024, for not awarding interest on the buyout amount to Kiri. Senda has also filed an appeal against awarding priority payment to Kiri out of proceeds of enbloc sale. As per the court direction, both the parties are required to file the written submissions by 29 August 2024, which is by end of this month. And hearing on appeals at the court of appeal and the Supreme Court of Singapore is likely to take place in November -- October or November 2024 within this year. With that, I would now like to open the floor for questions. Thank you very much.

[Operator Instructions] The first question is from the line of at [ Viankat Suresh Kumar ] from [ Barmash ] Financials.

Hello?

Yes, Suresh Jee, please go ahead.

Actually, enbloc sales process is going on. Is there any update, sir, enbloc, sir?

Yes. I think the enbloc sale process is going on quite efficiently. Deloitte as the receiver has taken a number of steps to commence the sale of DyStar and several activities have been completed by them. And what I believe is in a week or 2, the information memorandum or the sale process will be officially launched in the market. The due diligence are completed almost by Deloitte. These are the vendor due diligence done by the receiver to help the prospective buyers. At the same time, for the last 2 months, Deloitte has been in touch with a number of prospective bidders, and it is quite heartening to see that the numbers of the interested parties is quite good, and they are almost 70 plus. So that's a good sign. We believe that the process will continue at the same speed which has been going on. And hopefully, as per the stipulated time line, the sale process should get completed.

Actually, officially launched -- tender officially launched or launching in shortly?

Launching very shortly. We are expecting within this month in the next week or 2, the official auction will be launched.

This month?

Yes, because Deloitte has done very extensive preparations over the period of last 3, 4 months. So now they are all prepared ready to launch and to support with the requisite information to the prospective buyers.

Before this month launching, sir, it can take bidders -- how much time take it takes bidders, sir? How much time it takes bidders?

I think the entire process is divided into 2 steps. The first process is the nonbinding offer that the receiver is going to receive, which is like any usual sale process. And the serious buyers, the interested buyers and the selected buyers would be given the first set of information. And then they would be given the second phase of information or a second set of information, and then the binding offer would be invited. And once the binding offer is invited, then whoever is the best offer, it's up to Deloitte, the receiver, to finalize whatever is the best offer. And I think the whole process should get completed by somewhere between March 2025 to June 2025. And that is how the long-stop date is decided by the court, providing 6 months additional cushion in case if there is any extension or if there is any delay in any regulatory approvals or any unforeseen events. Otherwise, the time lines to conclude the sale should be around June 2025.

Is this launching -- after bid is received, how much time tenders will allow, sir.

I think as per the normal practice, the due diligence time which would be allowed to prospective buyers would be ranging around 3 to 4 months.

3 to 4 months, around August to December?

Yes, around that time. So that is the time frame the prospective buyers will have to conduct the due diligence on DyStar.

Okay. Any appeal have been August 29 in investor presentation, what is happening, sir, only for interest amount is appeal or any enbloc-related issues appeals also allowed there?

Yes, let me clarify to you. There is no appeal on the enbloc sale from Senda appeal. There is no appeal on the appointment of the receivers, correct? So enbloc sale and appointment of receiver are not subject to the appeal in the Supreme Court. The only appeal from Kiri's side is the appeal for not awarding interest to Kiri. And the only appeal from Senda side is the appeal relates to the priority payment award to Kiri. From the sale proceeds of DyStar, Kiri is to be paid first before payment to Senda. So that priority payment is appealed by Senda. So only 2 points on the appeal, 1 point of interest from Kiri side and 1 point of appeal from Senda side, which is already finished. Now as we have already disclosed, August 29 is the date on which both the sides would need to file their grounds of appeal as well as their objections on the other side of the appeal. So both would be filed in one single document. And then the hearing would take place either in October or in November. So based on the current stipulated directions given by the court, seems that the appeal would be concluded before the end of November, actually. And then the decision and the judgment would be awaited after that.

Sir, you have any planning buyback or any increased promoter stake? Do you have any planning.

Sorry to interrupt you, sir. I request you to come back for a follow-up question. [Operator Instructions] The next question is from the line of Arun Malhotra from CapGrow Capital.

Wanted to say two things. One is this DyStar performance, how has been DyStar performing in the last 2 quarters? First one. That will also reflect on the possible valuation of the enbloc sale. That's one. And second, you have come out with a big project in Copper and Fertilizer business and also taken approval for INR 5,000 crores. Big numbers for a company like ours.

Yes.

So what is the rationale for it? I know you have taken the shareholder approval, but we do not have any past experience in this business. Why to point into an unrelated business?

Okay. So let me answer your first question first and then the second question, correct? Now the first question which relates to the performance of DyStar, correct? So in the first 6 months of the financial year of DyStar, right, the performance has been good. The performance has been normal. And as we declared, the gross -- the EBITDA for the first -- for the first quarter and the second quarter, both put together is around $55 million, right? So DyStar is running to an EBITDA level of $100 million plus and maybe $110 million at the current run rate. But the important point is this EBITDA is post Senda's and Longsheng's claiming their management fees and their usual extraction of money from DyStar. So this is a reported number. The nonmanagement fees and the adjusted number would be higher than this number. So still a strong performance. And the EBITDA margin as a percentage-wise is still above 15% for DyStar. So it's running well. Just to also update you on the cash position of DyStar, the last number we had is $570 million cash in the company. Last 2, 3 months have not been added yet. The net current assets, not only the current asset, but the net current asset is also north of $850 million. which is like onetime -- 1-year annual sales. So very strong financial positions, again, 0 loan. So you can understand that the financial strength of DyStar is still very good. So that's your first question. Your second question regarding our announcement of the next phase of investments. So let me just take your question into 2 parts. Number one, why we are entering into this project. We, ourselves and the Board of Kiri, has decided to diversify the core business line of the company, not from dyes intermediates, but also to our sectors which are rising sectors, upcoming sectors and futuristic sector. So what you have seen the decision which overwhelmingly approved by the shareholders is to enter into renewable energy space, EV sectors and infrastructure sectors and fertilizer sectors. These are the sectors where you might have seen or you must have read the research reports, that last -- I mean, the future 10, 20 years compared to last 10 years would be quite growth oriented, especially in India. That is the first reason. The second reason is that the -- these are the sectors in which India is heavily dependent on imports as on today. So every -- of the product that we will be producing in this new project would be replacing India's import. So that's the second reason, having the home market, domestic market, and growing market in India to cater and to serve this demand in India. As far as the size and the nonrelated field is concerned, as we have announced earlier, this would be the transformational changes for Kiri. Now anywhere we invest on large-scale amount with the upcoming funds, right, it would be a new sector. And we are all geared up, confident to execute these sectors by developing the management bandwidth that we need. So for example, for this sector, we have already taken on board the ex-Birla Copper CEO and CFO to lead the project. This is the haste of the team. It would be run by the independent CEO and independent executive director. So as far as the new sector and the management bandwidth is concerned, we have already started putting in place, we have started developing that. So -- but I agree with you, this is the sector in which we are entering. It's a new sector for the company, but it is not new sector for the country. It is the need for the country and the futuristic requirements for the country. So I think we are trying to align ourselves with the economic growth of the country. And we hope and we are confident to deliver success to the shareholders in this project too. And please remember, the investments are happening on -- in phase wise. So the risk is also measured to implement the whole project in 3 or more phases. So you will see periodical announcements as and when we make progress on each phase of the development of the capital investment, and we'll keep you appraised.

[Operator Instructions] The next question is from the line of [ Keval Gandhi from CapGrow Capital ].

Sir, like -- so basically, you mentioned that almost 70-plus investors have shown interest in the [ team ]. So like any large sort of strategy from the financial investors, which are actually showing traction in the [indiscernible]? Any 2 names that you can actually give us?

I think it would not be appropriate to announce the names because this is not in a public domain. But let me just give you the highlights of the kind of interest that has been received. The major pool of investors who have shown interest are the private equities and finance investors, okay? And those are whose and whose globally, right? So if you pick any major private equity global fund, they have shown interest, and they have approached the receiver and confirmed their participation in the bid. So I think the interest is quite significant, and these are the big names that you know, we know, all of us know, many of them are American private equity firms who have jumped in too. And I believe that the financial strength of the company and very strong balance sheet of the company has attracted these financial investors to come and to invest.

Okay. So I just have one more question on the Senda appeal. So basically, the appeal is now that we shall receive a payment on the priority uses. Earlier it was like -- it was actually believed that Senda has a problem with the ratio or the actual amount. So what's the situation on the earlier issues, like the ratio and the amount of the total consideration from the [ dyes ]?

Right. So it's a very important point. As you know, even in SICC, Senda did argue that the proceeds of sale of DyStar should be divided proportionate to the shareholding. That was the argument from Senda. And that is what was presented to the court by Senda, that whatever DyStar sale proceed is realized, it should be divided between the shareholders as per the shareholding pattern. But got decided otherwise and got accepted Kiri's argument that whatever sale proceed is realized and at whatever value DyStar is sold, Kiri's valuation for the buyout order has been crystallized based on the valuation of DyStar as on dated 3rd July 2018. So based on that valuation number, Kiri's crystallized amount is $603.8 million, which has been upheld by the Supreme Court. So then whatever is the value of DyStar as on today is actually not relevant to Kiri as long as Kiri is able to receive $603.8 million. And that is what court has decided in favor of Kiri. And that is what Senda has now challenged in the Supreme Court. So Senda's position for the appeal is the distribution as per the shareholding pattern. And Kiri's defense on the appeal is whatever SICC has decided, giving Kiri money first from the sale proceeds before giving to Senda is the correct decision, and it's the right decision by the Singapore International Commercial Court. So that is what is going to be argued now in the Supreme Court, of course, from Senda side. And from Kiri side, as I just mentioned, is we will argue that we have a right to receive interest, and court should award interest to Kiri. So that would be the arguments we'll be presenting in the Supreme Court now.

The next question is from the line of Bhavesh from Aditya Birla Money.

Sir, now with regards to enbloc sale, what could lead to further delays? It's been delayed since many years which are, at this stage, what are you worried about the [ mass asking ]?

I think the delay could be if the interest in DyStar or DyStar sale or the prospective buyers, the worry that we had earlier that if the interest -- because it's a litigated and it's a disputed company, sometimes there is a low interest from the prospective buyers or from the market. But actually, it has turned other way around. And thanks to the ability of Deloitte as a receiver and their network globally, they could have -- they have attracted and they could attract a large pool of prospective interested buyers, in fact. Besides that, there could not be any foreseeable reason to delay, because the time lines are almost there as for the target given by Deloitte. Court has decided long-stop date as December 2025, so it won't stretch beyond that. The only other delay is any prospective buyer may go through some regulatory approval, such as approval related to anti-compete and anti-competition and things like that. So if such a strategic buyer is about to acquire DyStar, and if they have to go through certain regulatory approvals in multiple jurisdiction, because DyStar has a large and vast network. I mean there are 26 countries in which DyStar has subsidiaries and many plants. So if that is the case, then that could be a kind of a formalities and kind of procedural, that may take few months. Otherwise, we don't see any other reason for delay in this phase actually. This is an enforcement phase. Please remember, since May 2024, since February 2024, what we are now into is the enforcement phase. Earlier, it was a phase where we had to prove ourselves. And now it is the court which is enforcing the judgment. So there is a difference between the earlier times and the current enforcement time. So we expect not to have any other extraneous reasons for the delay, in fact. And if you read the judgment carefully, court has curtailed powers or the rights from both the parties, from both the shareholders, to apply for any extension on these dates. Neither Kiri nor Senda has any leave from the court or any permission from the court to apply for any delay or to apply to extend the time. It's only the receivers has been given permission and given consent in a situation where receiver thinks that there is a legitimate reason to apply for extension, only receiver can apply for an extension in this time frame. No shareholders can apply any extension in the time line decided by the court. So that also shows that court is vigilant, court is prudent and court has taken that measure not to have any delays now onwards. So I think that helps the overall situation to avoid any delay.

Sir, appreciate your answer. Sir, secondly, on stand-alone business, are you seeing any improvement in terms of demand because it's been weak since maybe 1.5, 2 years now? What is the way...

Yes, yes. I think if you look at the first quarter of this financial year, at least on a stand-alone basis, we have turned into profitable. So that is the positive sign. You have seen that there is an improvement in revenue. And we have seen that the demand has also picked up. The supply chain has become quite active now to buffer the inventory and to place more orders. Export from India for dyes has also increased in the last quarter and the earlier quarter. So I think we see overall recovery in the export market as well as domestic textile industry. Another important factor I must highlight is the reduction in cotton prices. So if you look at globally, the cotton prices have reduced. And when cotton prices go down, usually, there is a trend that the reactive dyes demand picks up. And we have seen that happening now, because the cotton prices seem to be bottoming out and that has also spurred certain increase in demand. So we hope that the recovery continues in the next few quarters. Now another improvement operationally, which you see is the reduction in legal costs in the first quarter. But that may not be necessarily continuing in the next 2 quarters because now we are heading for the submissions of the appeal because the lawyers activity was down in the first quarter. But in the current quarter and the next quarter til the end of November, until the hearing gets completed, the legal activities are going to pick up again. So we might see in these 2 quarters that the reduced legal costs may go up a bit this quarter and the next quarter. And then from December onwards, then the legal cost is expected to drastically again go down.

The next question is from the line of Abhishek Naik from Hexagon Assets.

Sir, I just have one question. Correct me if I'm wrong, but I believe this appeal is the final stage of litigation and there shouldn't be any more further litigation regarding the DyStar sale process, right? So with that being said, we know that your partner is a particularly litigious partner and they would try to delay the process as much as possible. So in your experience, has there been any precedent that when an enforcement order like this has been passed, after a sale has been done, has there been any precedent where the other party can say that the sale was not done in a fair way, in a proper way, and there needs to be a further review of the sale and could they start a litigation after the sale has been done? Is there any possibility of that, sir?

Thank you. There is no such possibility and there is no such precedence. Once the sale is completed, once the appeal is completed, there is no review process at all. There is no review of any enforcement orders, any enforcement judgments earlier in Singapore. So there is no chance of any way to reopen legally the concluded decision of the DyStar sale. Now saying so, one could always try to basically put a blame on the receiver. Let's say, for example, if Senda is bidding in this auction, and Senda is also participating probably in this auction and we are quite confident that they would do so because that's the only way they can be [ acquired ] DyStar, but if they do not get through auction and somebody else, the other buyer, with Deloitte's transference and efficient process, wins the bid, then if they wish to choose to file suit against the receiver, it is their choice. But I don't think they can go that far that can reverse the sale order, that can reverse the decision. We don't see anything like this happening. On the other way around, you would be now understanding that the way the Supreme Court has now expedited the trial by cutting short the appeal process and giving the hearing date earlier in October and November, it seems that the Supreme Court wishes and wants to conclude this appeal before even DyStar sale has been completed, so that the receiver has clear direction on how to distribute money. Whether to give Kiri interest or not from their proceeds or whether to give priority or Pari-Passu. Whatever receiver has to decide, finally, without any pending litigation, that can be done if the appeal is concluded before the sale process is complete and this is exactly what the Supreme Court is doing as we speak. And the dates speak for itself. So I think court is quite vigilant. Court is also understanding the seriousness. Court has expedited the appeal, and these are all the signs that the Singapore judiciary wants to conclude this at the earliest.

The next question is from the line of Amit Mehendale from RoboCapital.

I have a question on the new venture. Assuming that we get this money by next year, say, by December or so and then gets invested into a new venture, what type of investments do we look for in terms of either loans or some type of monetary -- some indication on that? And then what -- how much revenue or ROE are we targeting on profitability? Some indicative ballpark numbers now that we have some concrete, I mean, we have some plans, right, for that?

Right, right, right. So let me answer your question very simplistically. The investments will go phase-wise. And let me just explain you the numbers from the first 2 phases. So the first phase of investment would be around INR 2,400 crores, and the second phase of investment would be close to INR 4,000 crores to INR 5,000 crores, which will be having a total investment of around INR 6,000 crores to INR 7,000 crores in the first 2 phases. . Now the first phase would generate revenue of almost somewhere close to INR 15,000 crores. And the second phase would generate around INR 25,000 crores. So when both the phases are completed, you are looking at the numbers which are significantly higher and transformative. So that would bring the total to INR 40,000 crores. On the first INR 18,000 crores of sales, we are expecting at least INR 1,400 crores to INR 1,500 crores of profit after tax. And also for the second phase, we are expecting at least another INR 2,000 crores of profit after tax. So to be on a conservative side, when we complete both the projects, we are expecting the profits in the range of around INR 3,000 crores with a revenue of INR 40,000 crores. So that is what we are trying to contemplate. Of course, it will take time. By the time all these numbers get reflected into our P&L, it may take starting from 2 years' to 5 years' time. So this would be next 5 years' window, and the numbers and the targets that as a shareholder, you can look for.

The next question is from the line of Pradeep Rawat from Yogya Capital.

Sir, I have one query. So do we maintain an order book for dye and dye intermediates?

Yes. Yes. We do maintain an order book for both. For example, for dyes, our order book is now almost 1.5 months. And the intermediates, it's not that high, but intermediates is less than a month right now. So order books are slowly growing, but not like what the time we used to have earlier. While we have 3 to 4 months of our capacities booked, which is not the situation currently. And please also note that our current operational capacities and the way we have scaled down our expenses is about 50%. So even last quarter, our overall capacity utilization has been 50% and we like to increase that. So the moment we increase the capacity utilization from 50% to 70%, 75%, our order book in number of days, the number of months will further reduce. So in the next 6 months' time, our order book in terms of number of days may range less than 30, but our attempt would be to keep increasing our capacity utilization now.

Yes. Okay. Understood. So my next question is regarding the CapEx. So you said that in Phase 1 CapEx, we would be spending around INR 2,400 crores. So can you give like high level talk on this, where would this money be spent?

So it would be basically spent for the first phase of first phase of our CapEx, our total investment, and that would be the one product line for manufacturing copper. So that would be copper rods, copper cathodes, copper coils and things like that. So various varieties of copper. And that would have somewhere around 2 lakh tonne, 200,000 tonnes of the finished product production of copper. That is what you are looking at in the first phase of investment. And the second phase would be around 3 lakh tonne, 300,000 tonnes of copper, along with 9 lakh tonnes, 900,000 tonnes of fertilizer, right? So that is what you are looking at. So first phase of CapEx would be around 2 lakh tonnes. And I think today, the price of copper is close to INR 10,000, INR 10,500 a tonne, something like that. So you can put an estimate, and the numbers would be in the range of what I just mentioned.

[Operator Instructions] The next follow-up question is from the line of [ Viankat Suresh Kumar ] from [ Burman's ] Financials.

Any promoter stake increase in the Kiri in near future?

Yes. Yes, I have been saying this for almost a year now, but you can understand that we are trying to be under the arrangement, but the answer is yes, correct.

It will be implemented in shortly? Or it will take more time?

Sorry to interrupt you, sir. We have lost the management line connection. [Technical Difficulty] Thank you for patiently holding. We have the management line back on the call. Please, [ Viankat ] Suresh Kumar, go ahead with your questions.

Sir, you can take more time to increase the stake or planning shortly, any...

Yes, the answer is yes. Sorry, we got disconnected. And the appropriate disclosure would be made at the appropriate time frame. But yes, the answer is yes, what you just said. What you just asked.

In terms -- tell me time, sir, time frame at least, months or...

I think it would be appropriate once the execution is made and then we will make the appropriate disclosures. But the intent I have already expressed in the last 2 quarters. And from the promoter side, from the family side, yes. And then when the time comes, when the execution takes place, we'll definitely inform the shareholders.

The next follow-up question is from the line of Keval Gandhi from CapGrow Capital.

Sir, just wanted to how we reward [indiscernible] DyStar sale is recognized? And second on the capital allocation, which you mentioned about the [indiscernible] thing. So what if that doesn't continue to win? So like how are you looking on the capital allocation strategy for Kiri?

Yes. So just to answer your first question. As we have just announced and disclosed and decided to embark on one of the largest CapEx which we have ever done in the history. And the profits and the numbers, which I have just mentioned, over the next 5 years, is expected to be like more than the double the market cap which is today. So when the actual numbers unfold, when the performance is proven by the management and the company, I think the shareholders would be rewarded immensely. I would be, as a shareholder, awarded immensely because that would show the significant value creation in the company. Whether this value creation has been reflected in terms of the market capitalizing, that only time will say. But these are the kind of numbers that we are aspiring to generate and to create value for in future, correct? So that's where the value creation and the shareholders reward. Now when you talked about reward in terms of the dividend or the buyback, I must say that such kind of amount, if it is, if the Kiri Board decides, will be quite smaller. And the major chunk would be reinvested for the better value creation. That is number one, right? That was your first question. Number two, what you mentioned about the capital allocation. Out of $604 million, what Kiri would invest in this new announced project, sizable project, would be an equity and almost half of that amount. So the allocation out of $600 million would be around close to $300 million as an equity and there will be matching debt, which will be taken for this CapEx. So that's where this amount would be allotted. Remaining $300 million is going to remain with the company, and the prudent use of that amount would be discussed and decided in future course of action. Right now, that amount would be kept in the company, as kind of a buffer or as kind of a safety net to ensure that nothing goes wrong when we are executing one big project. On the way, in the next 3 to 5 years, if some good opportunities come, this amount could also be deployed and we'll see how the opportunities come in future.

The next question is from the line of Abhinav, an individual investor.

My question is how much can we expect to pay in legal fees between now and June 2024?

June next year, right?

Yes.

Now -- at least if I can give you the approximate number based on the quarterly running, we can at least expect close to INR 15 crores to INR 20 crores around that range.

That is cumulatively, correct?

Yes, cumulatively. Cumulatively. So on the conservative higher side, you are looking at somewhere around INR 20 crores we need to spend more til our [ funds ] are in.

And one more thing, sir. On the last call, you had...

Sorry to interrupt, sir. I request you to come back for a follow-up. The next question is from the line of [ Amal Chandav ], an individual investor.

So I've got a question about -- I think -- please take my question with a pinch of salt. We've been talking about all the extensions since last 3, 4 years. I remember back in 2020, '21, you said you are introducing lot of measures in terms of having the new management in place, having a new company in place with a new product line, which will generate at least INR 2,000 crores -- sorry, INR 200 crores per annum. . But looking at all that, which hasn't materialized well, how would we, as shareholders, would foresee that the big project is coming up? Is there any lagging in terms of execution? Or are we just talking about this? Because every time there is -- for the past few quarters, the numbers just doesn't reflect whether it's a consolidated or stand-alone. I wouldn't consider consolidated at all, as you likely said, DyStar money has never come through our books. It's just the number that's reflecting, which I would -- I mean, if I would see that it's nothing consolidated, you should not even see that. And then -- when we talk about the stand-alone numbers, we are not doing any better. Although India is growing at a very fast pace, we're doing very well in a lot of industries, with so much experience post past decade, where are we?

So let me address your questions and also give certain corrections what you just said, okay? Company and we have never announced any CapEx of new project or new investment in last 3 years. This is the first time that the new investment has been announced, right? And that new investment to a significant size. And that is number one. Number two, why this decision has been taken now to announce it and to embark on it, okay? Because we see the feasibility and we see the possibility of our sale proceed of DyStar to be coming, okay? And if you look at last 3 years or as a matter of fact, 5 years, company was not able to generate enough profits or neither company had raised any funds from outside, right, to be on conservative side to invest for any expansions or anything, okay? Company has not done it because company was not able to avail funds from the sale proceed of DyStar. As a matter of fact, number three, company could not grow for 10 years because company has spent lot of funds on the account of legal cost and on the Singapore litigation, correct? And because of lack of the equity required to grow and expand and incur new CapEx, we couldn't do it. Even when we are announcing this project today, there is no equity which has been received as on today from the DyStar sale proceed. What we are expecting is to receive in the next 1 year time, correct? The reason we are trying to save time for 1 year is we can have availability of certain advanced funds, certain external raise funds, right now, as I speak to you, which has already been arranged, and that's why we are embarking on this project and the new CapEx. So you are right, I 100% am aligned with you that company could not grow, could not expand, could not put more CapEx on the lack of funds. But now in the final stage, in the final phase, when we see -- when we have visibility of our money coming, we are able to raise funds, we are able to arrange for capital investment requirements and now we will start this. Again, we have been taking people on board. We have taken people on board for almost 3 years. And we have been incurring that cost also. So there are certain people on the projects, you are right, have been there on the board. And hopefully, this new management bandwidth should be able to now function, should have adequate assignments to proceed with their work. And we have been able to retain certain good talent for the last 2, 3 years. Again, it has costed us. But hopefully, next 2 to 3 years' time, when we go through this project implementation, it might be able to help us to expedite. But you are right. And we hope to give you good numbers in the next 1 or 2 years.

The next question is from the line of Ashwani, an individual investor.

Am I audible?

Yes, please. Go ahead.

Yes, just have a couple of questions. Firstly, during the due diligence process which Deloitte has performed, has there been anything which has come to their notice which might be different from the whole books which were presented or which may hamper in enbloc sale process?

Nothing at all, actually. And as far as the financial numbers are concerned, the cash in the company is concerned, the balance sheet items are concerned, not at all. Actually, there is nothing which has come across which could be surprising or which could be unknown or which could be falsifying on the numbers. Nothing like that has happened actually. So the numbers which have been there on the books are the correct numbers. The only thing which we have seen is last 2, 3, 4 years, DyStar does make provisioning on 1 year to -- sometimes to declare lower profit. But in the next year or a year after, they are reversing the provisioning, correct? So making provisioning, reversing provisioning. These are the activities that we have seen. But in overall numbers on the balance sheet side as well as on P&L side, there's nothing surprised. There's nothing which can hamper or which can delay the enbloc process. Nothing like that. Absolutely nothing.

Okay. And the management of DyStar still in the hands of Senda. So what kind of measures are being taken right now by Deloitte or the SICC or the Supreme Court in order to ensure that no mala fide practices will be done by them during this process also.

Absolutely. So today, we have seen that Deloitte as the receiver is doing an excellent job since their appointment to make sure that the value of the company is protected. That is number one. So there are certain notices, there are certain observations, there are certain directions Deloitte is giving in terms of related party contracts in terms of overall preserving cash, location of the cash of the company. So it has been really prudent in the sense to ensure that the value of the company that the Deloitte is selling is preserved, okay? So that work is done by Deloitte. Deloitte is not interfering in the day-to-day management or operations of the company because that is not their job given by the court. Their job is to sell the company and to sell the shares of the company. And for that perspective, they are trying to maintain the value of the company. That is number one. Now saying so, number two, another important aspect which has been taken cared by Deloitte is the process in which the company is being sold. So the process has been -- is being run as a confidential process. The process will have, for example, the bidders would -- and who is bidding, how much for DyStar, would not be given to the shareholders, okay? And those confidentiality -- that confidentiality would be maintained, those data would be confidential with Deloitte and they will treat shareholders as well as the external bidders all at par at the same level. So there would be a same level of disclosure. For example, DyStar directors are not supposed to or should not be used that information to pass on to the shareholders to help them for the bidding. So these kind of measures have been taken by Deloitte. And for example, whenever the binding offers come, it would be only the discretion and decision of the receiver to decide who is the best offer, the highest offer and with the proof of funds and then they are going to make a decision discretely without informing or without telling or without giving information to the -- to Senda or to Kiri as a matter of fact. So I think the process is being run is quite confidential process. So it's not an open option where everyone can see each other's ways.

Ladies and gentlemen, we'll take this as the last question. I now hand the conference over to the management for closing comments.

I thank all of you for participating in today's conference call. I wish you all the best, and we'll meet and discuss in the next quarter. Thanks a lot. Thank you.

Thank you. On behalf of Kiri Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.