NLC India Limited (513683) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to NLC India Limited Q1 FY '21 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Modi from ICICI Securities. Thank you, and over to you, Mr. Modi.

Thank you, Nirav. On behalf of ICICI Securities, I welcome you all to the NLC Q1 FY '22 Results Conference Call. We have with us Shri Rakesh Kumar, CMD, NLC India; thank you sir for your time, along with the senior management team of NLC. I would like to hand over the call to the management for the opening remarks, followed by Q&A. Over to you, sir. Thank you.

Thank you very much, Rahulji. I'm Rakesh Kumar, CMD, NLC India Limited and joining you for this call from Neyveli, along with, Shri R. Vikraman, Director, HR, is also having additional charge of Director, Mines; Shri Shaji John, Director Power; and Shri Jaikumar Srinivasan, Director, Finance, who is also having additional charge of Director, PMP. I welcome you all for this conference call, and I would like to mention a few highlights of the quarter ending 30 June 2021. The power generation and export for Q1 of 2021-'22 is 6,638.63 million unit and 5,834.33 million unit as against 5,698.60 million unit and 4,962.67 million unit in the corresponding quarter of the previous year, registering a growth of 16.50% and 17.56%, respectively, in spite of COVID performance effect in the power market. The performance -- PAF in the Thermal Power Station II expansion has registered a growth of 23% from 48% to 71% PAF during the current period compared to the corresponding period, even though the new CFBC technology is facing various technological issues since its inception. Solar power generation during the period registered a growth of 8.57%, 502 million unit to 545 million unit compared to the same period of the previous year. Lignite production during the period is 49.62 lakh tonne against 46.98 lakh tonne of the corresponding period, registering a growth by 5.62% over the corresponding period of the previous year. Open market sale of lignite in Q1 '21-'22 is 5.70 lakh tonne against 1.58 lakh tonne in the corresponding period of previous year, registering an increase of 261%. Coal production from Talabira coal mine was 4.50 lakh tonne as against 0.24 lakh tonne in the corresponding quarter of the previous year. The total income of the company for Q1 '21-'22 is INR 2,504.45 crore as against INR 2,386.86 crore in the corresponding period of the previous year. Profit after tax for Q1 is INR 267.22 crore as against INR 292.54 crore in the corresponding period of the previous year. Some of the major highlights of Q1 of '21-'22 are that the power generation of 91.62 million unit on 30 June 2021 was the highest generation on a single day since inception. Power generation of 2,329.47 million unit for the month of June 2021, highest for any month since inception. Renewables Q1 '21-'22 is 18%, which was 17% in the last year Q1. Zero surrender was achieved for 10 days during June 2021 and 45 days up to June 2021. Trade to surrender ratio is 64.48% for June 2021. During the quarter, power sale through real-time market is 348.62 million unit, fetching a revenue of INR 87.55 crore against 112.46 million unit amounting to INR 24.13 crore in the corresponding period -- previous period, registering growth of 210%. During the quarter, company has realized INR 1,935 crore against the billing of INR 2,185 crore with a collection efficiency of 89%. Now I request you to invite questions from the participants of the call.

[Operator Instructions] The first question is from the line of Dhruv from HDFC Asset Management.

Sir, can you give the split of the under recoveries this quarter and also the last quarter numbers?

Under recoveries. Yes, the under recoveries of thermal power stations, INR 102.53 crore up to June 2021 as against INR 124.61 crore last year, first quarter.

And from mining under recovery?

Mining under recovery. The under recovery up to June 2021 is INR 244.95 crore as against last year, the under recoveries of mines were INR 244.95 crore.

It's same, sir, INR 244.9 crore this year and same last year?

No. Sorry. INR 162.74 crore last year.

Current year.

Current year, current year. Sorry, current year. Last year was INR 244.95 crore.

Sir, how much of this under recoveries on account of this pending issue because of the -- I believe the Kerala case with CRC has yet to come out. I believe you are recording about INR 100 per tonne there. So how much part of this INR 162 crores is due to that pending case? Because I believe once you get the order in your favor, you can pass on the full benefit retrospectively, right?

Yes. I would like to request Director, Finance for this question.

No. There is a certain difference between the under recovery capacity charges and the Kerala thing which you are mentioning. Under recovery, what we are -- figures which we are giving is purely the difference in the normative and actual achievement of the parameters in terms of your annual fixed charges recovery in terms of meeting your 85% availability. And also various other operating parameters in terms of achieving the normative heat rate, your specific oil consumption, your auxiliary consumption et cetera, so both on the variable charges and the capacity charges. If you fail to meet yearly as per the norms, so there will be under recovery. So this is different from the Kerala issue, where it was more to do with the transfer pricing from mines to the power plant, where there were some observations. So it will reach its finality. Based on the final outcome of that, our revenue side will be determined. So we will get a better transfer pricing, which will enhance our realization.

Got it. Sir, this mining under recovery of INR 162 crores, now if I understand there are 2 parts to the under recovery, one is that because you were not able to operate the mine at 85%, say, utilization or 80% utilization because there is a schedule, so you get part of that under recovery. So let's say, for example, the normative per tonne charge that you can recover is, say, for example, INR 100, you could -- I mean, because this is getting recovered at a lower quantum of volumes, so there is an under recovery. The second thought the Kerala issue was that this INR 100, the normative charge that you were claiming, Kerala is probably saying that it is INR 100, it is, say, INR 90 because of some cost disallowances, I thought. So -- and this also is causing some under recovery. So I was wondering if you can probably split of this INR 162 crores between the 2 buckets that I mentioned?

Well, let me frame my answer like this, that -- the under recovery -- the cost for the under recovery is, of course, as you rightly said, that once you are not meeting the annual contracted quantity, to that extent, if you are falling short, your recoveries would be affected. Now there are -- in the Kerala thing, there are a few other minor issues with regard to a separate billing of your security and water charges, which we were doing as per the earlier regulation in line with the power regulation because as part of our O&M charges, there is 2 other elements of security and water charges, which we provided in the regulation that security and water charges doesn't follow a normative thing. I mean water charges -- in each mine, water management charges are different depending on the size and also the geographical terrain. So in our regulation, the 1924 regulation, we had sought to provide the same kind of a thing. This was something which was objected by the Kerala this thing that you're introducing new elements, which was perfectly as per the electricity tariff regulation. Now there is a -- at the time of admittance of this petition, we were asked to keep this pricing under abeyance because in any way, the CRC new regulation is going to come into the place. So it is just we are keeping it under abeyance. So it will reach a finality once the order is passed on that particular thing. But we are reckoning this under recovery for the moment based on whatever is the outcome -- see, if -- let me explain this that while the capacity charges as far as the power side is -- by way of a 2-part tariff, there is not much clarity as regards the mining is concerned. If there are some surrenders on the -- by the beneficiary, the DISCOMs, we are ending up getting the capacity charges. But as far as the mine is concerned, which is predominantly the capital cost, so to that extent, there will also be an under recovery. So all this is adding to the under recovery, which will -- once the Kerala order reach finality, we'll accordingly reflect it as a -- at the final revenue realization.

Got it. That is what -- so for example, had the Kerala issue not been there and you were recording it as you were recording earlier, I thought this under recovery number would be lower. So I was trying to get that number because once the Kerala issue is sorted that will be 2 numbers I thought 1 should look at for under recoveries if the case comes in your favor. But probably -- no worries, I'll try to get it offline. Sir, just 1 -- the next question was just some clarity on RTM sales that we do. Now, for example, if what we recover in RTM sales is much higher than your cost. And when I say cost is because large part of our cost will be mining cost, where anyway, the DISCOM is surrendered, so there's no obligation to -- I mean, you have no obligation to give in the cost of mine. So say, for example, if you recover significantly higher amount than the cost of your mine or the cost of generation, can you keep that differential as part of your profit? Or do you have to share all part of the cost to -- all part of the profit to be DISCOM? Because your case is a bit different because you are linked to the mine, where the mine cost is effectively your own cost and not the DISCOMs cost.

See, whatever we are selling in the open market, let us say that our first objective is -- because these are surrendered power, and we have an underlying variable charges, which I'm recovering as per the long-term PP. Now let us assume there is a surrender, say, for example, if my variable cost is INR 1.70 and I will have to sell this power more than INR 1.70. So let us say I do at INR 2, then INR 0.30 would be my profit out of this particular thing. Now since the capacity charges corresponding to the surrendered power, anyway, the DISCOM is going to pay me. To that extent, I will have to share the capacity source to mitigate their thing. And I'll like to keep a share of that profit with me. In any case, the variable charges -- up to the variable charges, the mining charges are covered. Mining charges are purely the variable changes, isn't it? Because that's the cost of the [Technical Difficulty] which I'm entitled to for every incremental power I sell in the open market. But any profit I will have to share because the capacity charges, without consuming the power, the capacity charges has been borne by the beneficiary.

Yes. But sir, in case, for example, now see, the variable cost is, as you mentioned, INR 1.9 in the fixed cost, let's say, INR 2, which is effectively, say, for example, simplistically, the all-in cost comes to INR 4, which the DISCOM is anyways paying you as obligated effectively to pay you. But if you sell the real-time power at, say, INR 6, which is higher than what is the obligated cost of the DISCOM, do you get to keep this higher amount? Because effectively, what we're recovering is because of the mining profits.

Yes. Once I compensate them for the capacity charges, beyond that, we are entitled to keep this.

Okay. So the recent increase in this RTM prices that we see that should benefit us, right?

Yes. Benefit us, definitely.

Got it. Got it. And sir, the last thing is, then I'll join the queue. Sir, this government has come out with this new regulation on LPS, late payment surcharge, where the DISCOM if does not pay by 7 months, you have a right to -- I mean, they cannot buy this power -- they will be stopped to buy the power from exchanges.

Yes.

And so how do you see this for you? Because we understand Tamil Nadu has been paying with a lot of delays. So do you see a significant change for us once this regulation is in place? I believe, it's already announced -- already notified. So do you think a change that can happen in your receivable pattern?

No. We are not only thinking we are experiencing this change because with this particular notification in place, it has helped to a great extent in disciplining the payment trend of not only TANGEDCO but also other DISCOMs. Because the provision, if I may reiterate, is that -- see, LC, letter of credit, mechanisms were anyway there earlier also, isn't it? But here, the mandate here is in case the LC is not kept up to the requirement, if there is a deficiency, then the generator can simply inform the straight load dispatch that the requisite amount of LC is not there, so there is -- this DISCOM is default. So to that extent, the power can be regulated. The power will be reduced to the extent, let us say, they are maintaining only INR 70 crores of LC against INR 100 crores requirement. So the 70% power only will be allowed to be dispatched. And not only this, they will not be able to access the open market for substituting this power. So that comes as a huge credible deterrence against not paying. So definitely, we see that with the advent of this particular notification. The payment trend has been very good. In fact, it has been hovering around 90% to 95%, which is quite good if you analyze all the payment trends of the DISCOMs for the past several this thing. So in fact, during the quarter, this quarter, the company has realized around 90%. So it is definitely -- but however, one should also keep in mind that the DISCOMs are also in a peculiar situation that -- and we are trying to tighten our thing, they are not able to do it with their end consumer because of the several social issues involved during the pandemic period and also hitherto at least, I mean, now things are looking up, but hitherto their commercial, their industrial has been -- activities has been subdued, their collection has been a bit subdued. So just because we have this thing we will not be too trigger-happy going and trying to involve the new found mechanism. So we have to follow a very, very calibrated approach here because these are all long-term relationship, long-term consumers. So idea is to utilize this new dispensation to discipline the DISCOMs and try to maintain a healthy trend for futures, while we are able to -- while we are trying to deal with the past dues substantially through the Atmanirbhar scheme. We have been very successful, and we'll look forward to further receipts under Atmanirbhar also. Thank you.

Got it. And sorry, sir, last quick question is on the NNTP. If you can provide the PAF for unit 1 and unit 2 separately? Because I believe last year, it was a bit low.

Can you repeat your question, please?

The NNTP, the new plant that we commissioned, the PAF numbers for -- probably the current PAF numbers, if you can help us with?

Plant availability.

Plant availability. Okay, okay.

Yes. Plant availability. Unit 1 and unit 2, if you can, please, separately.

See, when we talk about the plant availability, it's -- the plant availability is for the station always. It is not generally given unit-wise. So the -- if you see the first quarter, the plant availability of NNTP was 70.19%. 70.19% for -- that is for unit 1 and 2 combined. We will -- generally, the plant availability factor or plant load factor is told about the entire station together. We don't take it as unit 1 separate and unit 2 separate.

Okay. And sir, what would it be now? I mean say, in August or say on a current basis because it would have improved, I believe, by August?

Pardon me. Can you repeat your question, please?

What would be the plant availability now, in August, for instance?

Performance in August?

Yes.

Performance in August.

Yes. Actually, in the month of -- before going to August, perhaps I can share with you because August the figures are just working out. The performance since the month of July 4, NNTP was more than 90%. It is almost 91.23%, both units were doing very well.

So -- okay. So basically, the units have stabilized? One can expect largely fully...

Yes. Against it is getting stabilized, I would say. Yes.

Okay. So sir, what would you expect for the full year plant availability for the NNTP now given July, you've seen a very strong number?

Right now, the total station NNTP is something around 70s -- let's say, NNTP is...

Would we cross the 85% mark or...

No. It will be slightly difficult, but -- because we have already crossed almost up to September now. And the plant availability factor now is, I think, it's around 77%. So I think we should be better, say, above 80%, we should be able to reach. Even though the norms are 85%, we will be above 80%.

[Operator Instructions] The next question is from the line of Apoorva Bahadur from Investec.

Sir, I wanted to understand from you basically on the national asset monetization pipeline. I believe, our renewable assets have been lined above there as well. So what's our thought process over there? Are we going to do an IPO or an InvIT or straight away sale, how do we look to monetize that?

Basically, we have identified 2 sets of assets, solar and wind capacity totaling to 1,420 megawatts, which are fully commissioned and operational. And this business can be hived off and 49% stake can be offloaded. And Thermal Power Project II x 500-megawatt at Tuticorin, JV company with NLC having 89% stake and 11% by Tamil Nadu. So these 2 sets of assets have been identified.

Okay. And sir, for the renewable bundle, by when should we expect something -- some progress? Or I mean, are we seeing any interest over there or it's in very early stages?

We are just waiting for the Government of India decisions. We'll be closely following, and we will be trying to give our value addition, our inputs for them to take a decision and accordingly, we will offload. I will now give it Director, Finance to supplement on this issue.

Yes. Just to give you a perspective on this. Asset monetization, this -- what was broadly submitted by our CMD was the thought process. But more recently, there has been the road map, which was received from the NITI Aayog, there the advisory is more emphasis on identifying solar assets rather than any thermal assets because at this juncture, monetization of thermal assets appear to be much because of the general sentiments of investors as far as thermal assets are concerned. And besides the solar thing which has been broadly identified because NLCL has good capacity already built up as far as solar assets are concerned close to 1,400 megawatt. Besides this, the asset monetization which has been identified is also the investments which we are doing in the coal mining sector through the MDO route. So this also is included under the ambit of the asset monetization, the coal washeries, the sidings. But however, as far as MLC is concerned, no coal washeries or siding is concerned because siding which -- is something which we are doing as our own investment. So the 2 projects, the Talabira coal mining project and the South Pachwara coal mining projects, the investment that is coming from the MDO route is also being covered under the asset monetization. So depending on the -- so, we are in discussion with the Central Government on this. So depending on the thing, the exact strategy for asset monetization will be firmed up. Right now, it is more at the discussion stage.

Okay. Got it, sir. And as per your discussions and as per the guidelines received, how do you intend to use the proceeds from this monetization? Will it be used for further CapEx or is there an intention to pass it on as a dividend?

We have not yet firmed up our mind on these issues. As we go further, we will be taking suitable decisions.

Fair enough. Fair enough. Sir, also, if you could share the DC overloading that we do in our solar plants, how much do we overload? What percentage?

Overloading of what, sorry?

As in typically install a higher DC capacity than the AC capacity in solar assets to improve the CUF.

I need to check up on this. We can go to the next question. In the meantime, I will gather the details.

Sure, sir. Lastly, just if you could share the regulated equity for the power business and the mine, that will be very helpful?

Yes. Sure. The regulated equity is -- total regulated equity is INR 6,593 crore out, of which mine-related regulated equity is INR 2,830.78 crore and thermal power station-related regulated equity is INR 3,762.41 crore.

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

First question, is it possible to break up the revenues for Q1 FY '22 between thermal and renewables?

Yes, yes. The revenue -- yes, revenue is -- total revenue which is received from thermal and mines, INR 2,159.50 crore, that was the total revenue of Q1 '21-'22, out of which we got thermal revenue of INR 1,866.58 crore and solar is INR 189.17 crore and wind is INR 10.67 crore.

Understood, sir. What was the profit contribution of NNTP and NTPL in the first -- in the Q1 FY '22?

NNTP, our profit before tax, including regulatory for the first quarter '21-'22 was INR 60.71 crore. And for NTPL, the Q1 profit is INR 139.10 crore PBT.

And sir, what's the expectation of the final capital cost approval for NNTP in terms of time line?

The capital cost -- actually the final decision of CRC has not yet been taken. But the interim orders, which has been received -- this total cost is -- INR 7,980 crore is the total cost. And out of that, we have been provisionally allowed some cost, based on that interim tariff has been given. So final decision is yet to be taken. And final cost is also not yet been firmed up, some of the contracts getting closed and final cost will also be later on after inclusion of FGD.

So you need to install FGD in this particular power plant, correct?

Yes, yes.

Okay. And sir, on the -- coming to NLC TS-II expansion of 500 megawatt, I think in the first quarter, the PAF was slightly better 70%, July it has again gone down. How is August faring? And how do you expect the power plant to perform in the balance year of FY '22? Can we expect around 70%, 75% PAF for this particular power plant?

Director, Power?

Can you please repeat your question?

Sir, my question on NLC TS-II of 500 megawatt which is not stabilized despite having installed in 2015 or something. I think Q1 FY '22, I think the PAF was better, it was 70%, but July it has gone down, right, at 39%. How is the performance in August? And how do you see going forward? Has the power plant performance improved and the expected 70% PAF to be achieved in FY '22?

Yes. Actually, what you're saying is correct. In the first quarter, TPS-II expansion has performed very well, and we had -- actually, we have been able to achieve a plant availability factor of 71%. But yes, that was -- definitely, we were -- we have done some modifications in the operational parameters also. And some corrections we have done in the maintenance side also. And we are observing for the performance of it on a sustainable way. Of course, there were some failures in the month of July as well as in August also. So we would be -- we are addressing those problems also. Yes, but this is -- these activities, like, the corrections or some modifications what we are doing on the operational parameters or operational processes are a temporary kind of measurement. As we had told earlier, we are -- we will be going in for a solution on a holistic way with -- that process is going on. And -- but till that gets into a final shape, our team along with BHEL, we are working on this process of doing some corrections. Yes, with this performance levels, we will be overcoming these problems, which have encountered or we have come across in the month of July and August. And we hope it will go back to the performance level of 60-plus that is what we are expecting now.

Okay. Understood, sir. And sir, on the receivable side, I think the Tamil Nadu is still to be paid second tranche, right, second tranche of the loan. Is there any update which you can share that when do you expect the substantial payment from Tamil Nadu? And are we -- and have we approached the bank for the factoring in our receives completely so that we get -- we can reduce our receivables to a large extent?

Yes. For the second installment of Atmanirbhar -- second tranche of Atmanirbhar released by Government of India through PFC and REC. We are in constant with TANGEDCO team and very fruitful discussions are going on. And based on the understanding reached, we are hopeful that they will be covering most of our past dues. But for the current year, most of the current year dues, we are able to realize through discounting. And we are getting quite positive response of all the beneficiaries, including TANGEDCO on discounting of current year invoices.

And sir, one clarification, sir. On the RTM, whatever you earn, you can keep 50%, right? And you have to share the 50% with the beneficiary. Am I right in this?

Yes, yes. Whatever is the profit, we'll share 50% with the beneficiary.

One more question on what is happening with the CPSU solar bidding of 5 gigawatts?

Yes. CPSU solar bidding, we have submitted our bid, and we are waiting for the reverse auction to be conducted.

[Operator Instructions] The next question is from the line of Anshuman from ICICI Securities.

Sir, just continuing on the receivables front, if you could tell us the number at the end of Q1 and at the end of August, that will be helpful?

Yes. In the -- if we see the Atmanirbhar receipts -- no, in '21-'22, out of the billed amount of INR 2,892 crore including NTPL -- NLC and NTPL, we have realized INR 2,999 crore, which is 96% of the billed amount. And bill discounting, already NLC receipts we have got INR 818 crore through bill discounting. And in case of NTPL, we have received INR 439 crore in the bill discounting. So -- and if we see the Atmanirbhar receipts till date, NLC financial year 2021, we received INR 4,044 crore. And in Q1, we have got INR 126 crore under Atmanirbhar. And NTPL, we have got INR 1,088 crore for the financial year 2021. And Q1, we have got INR 293 crore. So under the Atmanirbhar total, we have got INR 5,551 crore so far, NLC INR 4,170 crore and NTPL INR 1,381 crore.

Sir, this is the status still Q1 end. So has there been any receipts in July and August as well?

No. For the second tranche of Atmanirbhar, so far, we -- I think the disbursements are in the process.

Okay. Okay. Sir, my second question is on recent bid win of 150-megawatt for hybrid project through SECI. So if you could just give us some details on the project, for example, the mix between the wind and solar? What is the CUF that we are expecting for both, the capital cost, IRRs, which we are expecting and the time lines?

Yes. The 150 megawatt wind-solar hybrid, we have 150 megawatt at a tariff of INR 2.34. And in this, our configuration will be either of the 2 components, shall be at least 33%. And CUF will be minimum 31.3%. And we will be arriving at the firmed up figures only after the bidding with the SDOs, our contractors. And based on that, we will have the superior picture.

Sir, the CUF is the blended figure for wind and solar?

Pardon me? CUF is blended. Yes.

Okay. And sir, any time lines that we are considering right now?

Yes. Actually, completion time is 18 months from the date of signing PPA with SECI. And we will be waiting for SECI to inform us the PPA. In the meantime, we will be proceeding ahead with the tendering process.

Okay. Sir, the debt equity mix will be 80-20, is it?

Yes. We have envisaged a debt equity ratio of 80:20.

Okay. And any CapEx figures which you can tell us?

Yes. CapEx will be firmed up based on the bidding, based on the tendering.

Okay. And sir, my last question is on the Ghatampur project. So has there been any time and cost overruns due to the second wave? Or are you still maintaining the commissioning date which you have told?

You are right that because of the second wave, although our team has tried and resorted to all the measures to contain the COVID impact. But second wave, we saw a dip in the manpower from more than 8,500 workforce level to 2,500. And then immediately, as we got the full control, we again ramped up and present level of workforce is more than 6,500. So due to this decline due to this, there was -- there is a delay in the project for 2 to 3 months. We are trying to catch up.

Okay. So do we expect it to be done in this fiscal year, the unit 1?

Yes. We are trying our level best to get the first unit in this financial year.

And second unit is also delayed. So it will go to -- probably to Q2 -- Q1 and the next fiscal year?

Yes. Although the time lines for second and third unit will also be impacted, but we are trying to catch up. We have still more time to catch up and reduce the delay.

Next question is from the line of Vipul Shah from Sumangal Investment Consultants. Due to no response, we move on to the next participant. The next question is from the line of [ Krishna Kumar ], retail investor.

The inventory cost for the current quarter was around INR 430 crores, which is far higher than what it was in the previous quarters. Any particular reason for this?

I couldn't get you clearly. Please repeat the question.

Am I audible now?

Yes. Now better. Yes.

Yes. The inventory cost is around INR 430 crore for the current quarter, which is far higher than what it was in the previous quarter. Is there any particular reason for this?

Actually, in this current quarter because of the better performance of the TPS-I and NNTP -- availability of the NNTP, coal consumption -- lignite consumption has increased. So the stock level has come down, which has resulted into the expenditure side of the stock. Though the production level was same, the stock has come down. So that has resulted into the expenditure.

Okay. So this could get reversed in the coming quarters in that case?

Yes. With the enhanced production, it will be come back.

Okay. And sir, 1 more question is I think last time you saw double-digit EPS was around 3 or 4 years ago, probably in 2017. And after that, EPS has been coming down. Now with all these power plants now operational and more or less kind of stabilized, even though there was minor problems, do you think the EPS can touch again double digits this year?

As you can see that the PLF of our plants is improving, sale of coal from Talabira mine is also taking place and it is expected to start the coal consumption from Talabira and the solar assets are also firming up for a better performance in the time to come, we expect better results.

Okay. So basically, the under recoveries should come down substantially low compared to last year, correct?

There has been a better efficiency in our stations as we can see in the results, under recoveries have reduced and as we are envisaging better PLF, better PAF and efficiency levels are also going up, we should definitely expect better results.

Okay. So the RTM sale also should go up because of power demand and power shortage?

It all depends that if -- as we are focusing on the efficiency levels and better PAF, maybe that this should result into competitive tariffs, and this can even result into lesser surrender and -- but since we have in the first quarter, we have achieved 0 surrender for -- on 45 days, this should give us a comfort in the time to come. We can focus on more such period, and at the same time, if surrender gets reduced, although RTM revenue may lower down, but our total revenue may go up.

The next question is from the line of [ Vipul Shah ] from [ Sumangal Investment Consultants ].

Hello?

Go ahead, sir. You're audible now.

Hello? Yes, sir, what is the status of our Bihar thermal project?

Bihar. You mean to say Odisha.

Yes. We are executing on thermal project, I think, in Bihar, no? Bihar or if I'm not...

It is not in Bihar. We are executing 1 project -- power project in UP, Ghatampur. You mean to say our Ghatampur power project?

Yes. That is of how many megawatts and what is the progress -- status of that project, sir?

Yes. This NUPPL subsidiary in which NLC has got 51% equity stake. The project comprising of 3 units of 660 megawatt with a total project cost of INR 17,237 crore. This project has been under the construction phase, and we have -- up to 30th of June, we have achieved a physical progress of 72.60%. And our -- this project is expected to achieve the first unit commissioning during the current fiscal year and balance 2 units in the next year.

What is the total CapEx we have done on this particular project till date, sir?

Yes. Cumulative CapEx achieved up to 30th June was INR 11,993.55 crores.

Out of which, what is our equity contribution?

We have infused the equity, this project is funded with a debt equity ratio of 70:30. And this equity contribution is further bifurcated into equity stake of 51% by NLC and 49% by UPRVUNL. And accordingly, we have infused our equity in line with our financial expenditures to the extent of 30%, INR 1,834 crore.

Okay, sir. And what is the tariff for this project, if I can may ask?

The anticipated tariff of this project was INR 4.52. But based on the actual costs incurred and based on the coal pricing, coal cost, which will be calculated after we start operations, we will be able to get the clear picture.

So you don't foresee any difficulty in honoring -- because honoring this commitment by UP government because right now, renewables are at INR 2.50, INR 2.70?

So far, we have not faced any difficulty in getting the equity participation from our promoter. And as far as competitiveness of this tariff is concerned, solar power and thermal power are different ball games because solar power can meet demand only during the day time and whereas the base load has to be ensured to -- in order to supply 24/7 power. Therefore, the PPA has already been signed, and UP has taken 75% stake in that -- 75% share of the PPA. We do not have any reason to foresee that any difficulty in getting the competitiveness of the power and realization of the money.

The next question is from the line of [ N.M. Modi ], an individual investor.

I wanted to get myself updated on insurance claims, sir, on all of our TS-II plants?

TS-II...

As you have launched the claim for more than INR 250 crores, sir, and we have got only INR 1 crore as per the note given in the accounts of March '21. So what is the latest situation, sir?

Yes. We have launched an insurance claim of INR 76 crore for 7th May incident and INR 177.62 crore for the 1 July incident. And we have got INR 10 crore so far as an interim payment, and we are still pursuing the claim with the insurance company.

Only INR 10 crores has been allotted so far.

No. insurance company has acknowledged the claim to the extent of 50%.

50%?

INR 50 crore. Sorry, INR 50 crore.

Sir, is there any dispute in this, sir?

Pardon me?

Dispute?

[indiscernible] has only acknowledged so far INR 50 crore...

Just to give us the comfort, they have acknowledged the claim to the extent of INR 50 crore and further processing is going on. This is just an ad hoc provisional comfort letter which we have got from the insurance company as a conservative measure from their side, at least INR 50 crores they have acknowledged. And they are processing the claim. We are hopeful that we will be able to realize...

Sir, even that INR 50 crore they have not paid in full, sir, no?

No, no. INR 50 crore they have acknowledged just to give us some comfort as a part of the -- because once we are accounting and acknowledging the revenue, we need to have some comfort from the insurance company. So provisionally, they have given a comfort letter of INR 50 crore. But at the same time, we have received INR 10 crore so far.

Okay. Sir, other things like what about this TPS-I you have -- TPS-I plant disposal?

Yes. TPS-I has been decommissioned. And after meeting all the compliances, our team is in the process of disposing it off. It has a set process which is going on.

Yes. Sir, my last question is, sir, about lignite sales. Sir, what is the prospect of lignite sales? Because of this coal pricing going up, what is the prospect sir, and at what rate we are able to sell, sir?

Yes. You are right that in view of the imported coal shooting up, our demand for lignite has increased and therefore, the lignite sale has also seen unprecedented levels. We are hopeful that if the situation in the market continues, we will be able to realize better money for our lignite sale.

Yes, sir. And sir, this export prices of power has gone up tremendously. So are we benefited by that also, sir?

Pardon me?

This export prices of power has gone up, so are you benefited by that?

Yes. Definitely, we are expected to gain better.

No. [indiscernible] side that they said that in some cases, the unit cost has gone to INR 15 to INR 20 even.

No. We should understand that although the price of the power in the market, open market, has increased tremendously, but in case there is a high demand of the power and since we have tied up our thermal power and solar power with PPAs, these beneficiaries are not going to surrender this power. So we will be getting whatever is as per the CRC regulation and as per PPAs. But in case they surrender the power and by chance, if we sell in that point of time, the price in the market is higher, that higher volumes, we can be -- higher price, we can expect. And therefore, that has some impact on our revenue also.

So sir, just last year, we did not pay any final dividend, sir. But we're not got -- paying good dividends, so what could be the reason, sir, for not paying final dividend, only 10% interim dividend was paid?

Yes. Already 10% interim dividend has been paid. Last year, our financial performance has been down because of the COVID and because of the TS-II incidents, therefore -- but in order to keep our investors satisfied, we have proposed a final dividend of 15%.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Rahul Modi for closing comments.

Thank you, Nirav. I would like to thank the senior management of NLC India for the time for this call. This was a very informative and very, very good call. Thank you so much, sir, for your time and all the participants, a big thank you.

On behalf of NLCIL, I thank all our valued investors and participants on behalf of the stakeholders. Thank you very much.

Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.