Power Finance Corporation Limited (PFC) Earnings Call Transcript & Summary

Good evening, everyone. I welcome you all to this conference call. Today, we have declared our results for the fourth quarter and financial year ending March 2021. And I've arranged this call to share with you PFC's performance for the period. As you all note that the past 1 year has been extraordinarily difficult year for all of us, resulting in both economic and social hardship. In spite of all the challenges faced, I am proud to say that PFC has been able to withstand the headwinds and has delivered remarkable profits in all the 4 quarters of FY '21. The key highlights for the financial year 2021. On this note, I would like to share that in FY '21, PFC registered the highest ever annual profit of INR 8,444 crores, a jump of 49% from FY '20. Acknowledging the role shareholders play in our growth, we are happy to share our success with them. Our announcement this afternoon regarding final dividend of INR 2 per share stands testament to this fact. Thus, in FY '21, PFC has given a total dividend of INR 10 per share. That is 100%. With this, PFC continues with its trend of delivering extraordinary shareholders' return. Further considering the challenging time, our focus this year has been on strengthening our balance sheet. This is demonstrated by the fact that our net worth saw a 16% growth from FY '20. Our capital levels improved by more than 180 basis points over FY '20 and can be seen that our current CRAR is at 18.83% which is well above the regulatory limits. Also, I would like to share that in FY '21, PFC diversified its lending to new segments in power sector. Recently, PFC has extended financial assistance of INR 570 crores for deploying 700 electric vehicles under Fame-2 mobility platform supported by Government of India and Government of U.K. PFC funded one of the largest 1,200-megawatt solar, wind, hybrid pump storage hydro project with a sanction amount of INR 5,429 crores. Thus, PFC is constantly focused on exploring new business avenues in the power sector. Now sharing some of the key financial indicators. For FY '21, the yield is at 10.58%, although there is a slight dip in the yield compared to FY '20 but it continues to be within our targeted range. The debt is due to suppressed interest income on account of refund of interest on interest and delayed charges of around INR 291 crores charged during the moratorium period, in line with the Supreme Court order and RBI directive. Also in the second quarter of FY '21, to align with the market, PFC has reduced its lending interest rates across the board by around 25 basis points, maximum 40 basis points. Therefore, the impact of such reduction has also been seen the yield. Further considering the ample liquidity in the market, our cost of funds for FY '21 reduced by almost 30 basis points to 7.48% from FY '20. Driven by stable yield and reducing cost of funds, the spread for FY '20 is at 3.10% and NIM is at 3.54%. Also keeping in view the market scenario in April this year, we have further passed on the interest rate benefit to our borrowers. And accordingly, going forward, we expect the NIM to be around 3%. Further, I would like to update that both the domestic and international credit rating agency have reaffirmed our credit rating. This reflects PFC's strong business fundamentals. Coming to the consolidated numbers at consolidated level also, PFC Group delivered a robust performance. In financial year '21 PFC Group loan asset book crossed INR 7 lakh crores mark. With this PFC continues to be the largest group in India power sector space. Further the consolidated PAT for financial year '21 is at INR 15,716 crores, a 66% increase from FY '20. On the operational front to both PFC and REC are making concerted efforts to align their policies and operations to achieve business synergies. I am glad to see that PFC has successfully sailed through the pandemic and delivered a strong performance, which clearly shows PFC inherent strength and ability to absorb economic shocks. Now turning to PFC's loan asset side. Our loan asset book as on 31st March 2021, is at INR 370,771 crores. In this context, I would like to highlight that in FY '21, our distribution asset portfolio grew significantly primarily due to disbursements under the government Atmanirbhar DISCOM package. Also loan asset growth in renewable energy and conventional generation comparatively slowed down due to the COVID pandemic. Further, there has been extraordinary repayment of around INR 20,000 crores this year. This is mainly due to prepayment of loans by central and state PSUs on account of clearance of their dues by discounts under Atmanirbhar DISCOM package and due to refinancing of some of PFC's renewable loan assets. This has resulted in subdued loan asset growth of 7.5%. After excluding this extraordinary event, PFC loan asset growth is 13%. Going forward, we will continue our efforts of tapping new loan assets as the economy recovers. But given the current shrink expected in GDP numbers and the surplus liquidity in the system, as of now, we envisage the marginal growth for PFC over the current levels. Coming to the loan asset quality. On the loan asset side, I'm happy to share that even during the economic slowdown, PFC has successfully resolved approximately 25% of its asset -- test assets book. PFC's test asset book as on 31st March 2020, was INR 27,872 crores, which has come down to INR 21,150 crores. PFC achieved successful resolution of INR 6,844 crores in 4 test projects that is Essar Transmission loan of INR 438 crores, Suzlon Energy loan of INR 915 crores, R.K.M Powergen loan of INR 5,105 crores and Jal Power loan of INR 386 crores, which was resolved in Q4 this year. Sufficient provisioning was available against these loans, and we do not have any major impact on the P&L. Thus, our target resolution approach has resulted in lowest NPL levels in the last 4 years. The gross NPA ratio is at 5.70% compared to 8.08% in FY '20. The net NPA ratio is at 2.09% compared to 3.80% in FY '20. Further, we continue to constantly pursue resolution of the test assets. And then I would like to share that currently in 2 projects worth INR 2,109 crores, we are in advanced stage of resolution, and we expect the resolution to close soon. These 2 projects are Jhabua Power loan of INR 764 crores. It is a 600-megawatt commission projects being resolved in NCLT. The lenders to the project have given in principal approval to the resolution plan and the same shall be submitted to NCLT for approval. Essar Power MP loan of INR 1,345 crores. It is a 2 into 600-megawatt commission. Project being resolved in NCLT. The final resolution plan for the project has been received and is under discussion by the lenders. With the resolution happening in these projects, we expect the NPA levels to come down in the future. Also, I would like to update that our standard book has largely remained intact, except for majorly 1 borrower slipping to Stage 3 in Q4. That is Sinnar Power transmission loan of INR 161 crores. On the provisioning front, I would like to highlight that due to resolution of Stage 3 assets and their upgradation, provisioning in absolute terms has decreased against Stage 3 assets, but overall provisioning continues -- coverage continues to be maintained at 63%. We feel that these provisioning levels are adequate for future resolution. Further, provisioning has been announced under Stage 1 and Stage 2 based on our ECL model, which is being locked out by reputed external agency. Under Stage 1 as informed in our earlier calls, the increase is majorly due to creation of additional provisioning of around INR 600 crores against TANGEDCO on account of shifting of rating from Category B to Category C. Under Stage 2, the provisioning increase is firstly on account of appreciation of Stage 3 assets on resolution, wherein 10% provisioning has been maintained as a prudent measure. Further in 2 non assets, even though our overdues are beyond 90 days, they have been classified as Stage 2 in view of the stay granted by the courts on their Stage 3 classification. On these loan assets, provisioning has been created similar to Stage 3 assets, and interest income is being booked on cash basis only. Therefore, this has led to increase in Stage 2 provisions. Also in government sector loans, this has been classified in Stage 2 due to payment overdues, additional provisioning as per the ECL model has been created. However, currently, all dues up to March have been clear. Thus under our ECL model, PFC is sufficient to provisioning buffer for Stage 1, Stage 2 and Stage 3 assets. Now before we move up to the borrowing side, I would like to share a status update on Government of India Atmanirbhar DISCOM scheme. Under the Atmanirbhar DISCOM scheme, so far, PFC has sanctioned INR 67,699 crores and disbursed INR 38,089 crores. For PFC and its subsidiary REC, combined together sanction stand at INR 134,782 crores and disbursement stands at INR 78,855 crores. We are expecting the base of disbursement to pick up as disbursement for tranche 2 are in the pipeline. Now coming to the liabilities side. First of all, I would like to share that PFC is well positioned in terms of liquidity. PFC has liquidity surplus in all its time records up to 1 year. Moreover, we have adopted the RBI liquidity risk management framework for NBFCs wherein from first December 2020, NBFCs are required to maintain a minimum prescribed liquidity coverage ratio, which is to be gradually increased to a level of 100% by December 2024. Currently, PFC's liquidity coverage ratio is within the regulatory limits of 50%. As is evident, PFC is actively committed in managing its liquidity profile. Coming to the borrowing portfolio, PFC's consent endeavors has been to diversify its borrowing portfolio. In this direction, during FY '21 PFC stepped into the retail bond market and has successfully raised INR 4,429 crores through public issuance of taxable bonds. Further as part of our diversification strategy, we also mobilized USD 900 million from the foreign market, which helps in achieving market diversification. I would like to reiterate that PFC would continue to focus on exploring new funding avenues and tapping new investor base for its funding requirement. Further, I would like to emphasize that even during pandemic, PFC faced no challenge in raising funding from domestic and international markets. This reflects confidence of the market in PFC business and its credit profile. Also, you all may be aware that the pandemic has led to a lot of volatility in the ForEx market. Therefore, considering the risk associated with PFC's foreign currency borrowing portfolio, we have been continuously monitoring our ForEx positions. Accordingly, in FY '21, PFC announced its exchange risk hedge ratio from 66% in FY '20 to 86% in FY '21 for portfolio with residual maturity of up to 5 years. Further exchange risk for loans, with residual maturity of up to 5 years has been covered. We believe that with this, PFC's bottom line is adequately protected from foreign exchange fluctuations. Business going forward. Before I wrap up, I would like to share our thoughts on the business tasty going forward. Keeping in view the government plan towards the renewable and clean energy sources, PFC will continue to focus on funding renewable energy projects. Also, PFC is tapping emerging opportunities in e-mobility space. Further being a strategic partner of Government of India, PFC will be an instrumental financial partner in government reform schemes for power sector like the proposed INR 3 trillion power reform package, Atmanirbhar DISCOM scheme, et cetera. Thus, we believe that PFC has ample business opportunities going forward. To conclude, I would like to say that for more than 3 decades, PFC has been regularly delivering strong financial performance. We remain confident that with our focused approach, PFC will continue to register higher revenue and drive strong results for our shareholders. Thanking you, and now we are open to questions.

[Operator Instructions] The first question is from the line of Mahrukh Adajania from Elara Capital.

Sir, I actually missed 2 names. You had named 4 accounts that were resolved in Q4. Two were R.K.M GM and Jal Power, what are the first 2 and their amount?

So these were SR Transmission INR 438 crores and Suzlon Energy loans, INR 950 crores.

So in any of these 4 was there any recovery, you said provisions were adequate, but was there any recovery or...

Yes, we were able to recover in the range of around 45% to 65%.

Okay. And they were not fully provided for?

No, these were fully provided for.

Fully provided for and you -- okay. Got it, sir. Sir, apart from Jhabua and SRMP, are there any other resolutions in the pipeline? This may -- these may happen immediately, but any others which would take longer but still happen over 12 to 15 months?

So during the -- I think the current year, we should be able to look at Dans Energy and Shiga Energy. These are the hydro projects in Sikkim. So these are...

Which is the second one, sir. Second one is which one after Dans?

Shiga Energy.

Okay.

Otherwise, we have projects in NCLT at different stages and because of COVID, and these are slow. So we expect that those also will be resolved.

Sir, any big or prominent ones there?

The Lanco Amarkantak project is there, where 2 units are operating and 2 have been around 74% completed. So that is one of them. And KSK may take further time where 3 units have been commissioned and 4th is under construction.

The next question is from the line of Hardik Shah from SBI Mutual Fund.

Sir, could you guide us about your borrowing plans for the current year?

This would be around INR 1 lakh crores.

This is over and above whatever you borrowed so far?

No. This is the overall for the year we are telling.

For the year, it is INR 1 lakh crores as approved by our Board of Directors.

As of now, how much have you done for...

Till now, we have not done, except for a very small borrowing under 54EC.

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

Congratulations for full year's financial performance. So firstly, in terms of margins, given that we have revised the rates across the board quite significantly. So how should we expect in terms of the repricing to play through because we have revised it from 3-year reset to 1-year reset as well. So -- now how should we expect in terms of the yield behavior going forward? And this will be more on the incremental loans I believe, or it would be even for the existing loans. So if you can just help us understand over the next 1 or 2 years how this entire repricing would play to with the revision in the rate.

So as indicated, we have revised our lending rate in April, this year. And this is for the new lending, these will be the rates. And for the existing lending whenever the reset is there, that will be repriced. So normally, we have loans with the larger component in 3-year reset. So these will be repriced over the 3 years. And we are thinking of giving an option to the borrower also that if he wants to get that upfront, then we are thinking of sharing the advantage to the borrower with certain percentage. So going forward, these loans will be repriced and the present NIM, which is around 3.5%, we are expecting that, that will -- that will come down to around 3% to 3.25%.

Okay. But the proportion maybe with just the 3-year reset, what is the kind of a component which can come in for the maturity over next 1 year. And I think still compared to the rate cut, we are not seeing so much of a pressure on the margins. It will take some time. It will take at least like 2 to 3 years to get it fully reflected in terms of yield.

So considering that 3 years reset is distributed over the next 3 years, so 1/3 of...

So broadly 1/3 can come in for this system and that can get revised by the quarter.

This is just an approximate numbers -- percentage, which we are talking about.

Sure. Sure. And secondly, in terms of the provisioning, so in terms of the existing projects during the quarter, how have we increased the provisioning coverage towards any particular project, maybe 2, 3 projects wherein you would have increased the coverage, given that there are delays in the resolution.

So this I will -- Parminder ma'am will be -- our CFO.

See, the current disbursement in this quarter, whatever has been made are categorized under Stage 1. And as per ECL model, we are making the provision. And if we talk of the total, including that TANGEDCO, which sir has shared with you where we have increased the provisioning, which is falling under Stage 1. We have on an average 0.40% provisioning under the Stage 1 assets.

No. So Stage 1 has been more or less flat quarter-on-quarter. I was just talking in terms of Stage 3, the additional INR 500-odd crores, which has been done in this particular quarter. So which projects do they actually pertain to? And would it be like maybe the resolution which we have been getting delayed, that's more or less adequately powered in terms of the provisioning.

As sir has said, there has been increase in the Stage 3 assets. One, we have added a new asset, Sinnar Transmission line. Apart from that, we have increased provisioning in few of the loans like Sinnar Thermal Power also, we have increased the provisioning amount. Apart from -- there is an increase in the Lanco also and Southeast also. Since there has been delay in the NCLT process. So based on that, the additional provisioning as per our ECL model has been made.

Okay, okay. And what has got resolved because there is the absolute decline of INR 200-odd crores after this addition. So this would be Jal or there will be some other assets which has got upgraded from Stage 3.

See, for fourth quarter, it's only Jal Power, which has been upgraded.

It's only Jal Power. Okay. Okay. Got it. And the last question in terms of dividend policy. So this time, we had seen almost 30% kind of payout. There was INR 2 of final dividend over and above the interim. So now we would continue with this guideline of 30% payout or 5% of net worth, whichever is the higher. How should we actually look at it going forward?

No. Going forward also, we will endeavor to meet these DP guidelines of 5% of net worth and 30% of PAT.

Yes. And in case of any deviation or for any reasons, if we can't follow that, then we have to have the specific approval. We can apply for that, and we can get the approval from DP.

Next question is from the line of Shubhra Trivedi from SBI Life.

So first is, I couldn't follow when you said that state government sector, there are certain accounts, which had moved to Stage 2 and as of March, all overdues are cleared. If you could throw a bit more light on it, like which accounts where these? When had they moved to Stage 2. And as of March, are they completely 0 overdue?

So state sectors, sometimes there is delay in making payment because the state Gencos were not covered under the liquidity package So they have an issue for payment. And like in Rajasthan, we had some issues and in MP. So -- but ultimately, they are paid within the 90 days limit. And as on March, as indicated, there was not -- there were not much overdues.

And despite of, yes, state sector loan, all dues have been paid, whichsoever was Stage 2 as on 31st of March 2021.

As in they are still in Stage 2 or they moved to Stage 1 now after payment?

See, that is -- we are talking about 31st March dues have been cleared by them.

Okay. Okay. Okay. And second question was on funds raised during FY '21 and how much of it was through bonds?

That our DF will be answering.

We have raised out of -- from bonds, we have raised approximately INR 41,000 crores. We have raised INR 81,062 crores -- INR 81,052 crores, out of which approximately 50% was raised through private placement of bonds. And we have gone ahead with 1 public issuance of bonds of INR 4,429 crores.

Okay. So INR 81,000 crores included bonds, bank loans, everything put together, right, even the foreign currency debt?

Right, right.

This was the total borrowing.

Okay. Okay. And slippages, you mentioned only 1 account, INR 160 crores, that was the only account which slipped in the entire year or there were more?

No, this was in Q4. This Jal Power project was in Q4 -- sorry, Sinnar Transmission was in Q4.

And during the year, how many -- what was the slippage overall?

I don't think we have any other slippages during the year in the Stage 3.

Okay. Okay. Okay. So just one last question from my side. So for government sector, if you can give the Stage 2 number outstanding as on to date?

That upfront figure is not there. So it is we club it with Stage 1. So if you want, we can reply -- if you can [indiscernible] to you and we can reply there.

Separately, we will...

[Operator Instructions] The next question is from the line of Mahesh M.B. from Kotak Securities.

Just 2 questions. One is on the SRMP resolution, what is the kind of recovery rate are you expecting out of that?

So this is under NCLT and the lenders are debating on it. So this will be around 45% to 50%.

Okay. And the second question, sir, of CapEx, which are available on the ground, like the ones that you mentioned, Lanco Amarkantak. Are these assets operational currently? And how do you see the -- what -- how do you see the buyers in the market today? Because unlike steel, we don't seem to be hearing about too many buyers for thermal plants. What is your assessment on the ground?

So these projects, Lanco Amarkantak, this has 4 units, 2 of 300-megawatt and 2 of 660 megawatts. So 300-megawatt is operational. And they have a EBITDA of around INR 300 crores. So as you said it rightly, that there are few takers for these projects who are bidding. And you already know the names. So there is limited number of bidders for these projects.

Sorry, the question is whether it's KSK or Lanco, what is the approach, which the organization will take you think as you don't find bidders. Do you see a situation where you can operate these assets as a current stand-alone units or you will have to look for liquidation as only option?

So these are under NCLT. And if we get good value, then we will go ahead with that. Otherwise, what you have suggested, we will look at that.

The next question is from the line of Jignesh Shial from Emkay Global.

And congrats for a very good set of numbers. Just confirming it, 86% of your ForEx loans within 5 years has been covered, right? Is that understanding correct?

Yes.

Right.

And what about more than 5 years?

That are partially covered and...

Can you quantify how much will it be covered more than 5 years? Is it possible the bifurcation between less than 5 years and more than 5 years.

So our strategy is that within that 0 to 5 years, we find time to hedge that issue. Otherwise, we normally let it open from normally if we are 10 years and for 5 to 10 years, we are normally letting it open.

And, see -- this if you ask about the swap structures, so 10 years, we are not finding it that there are liquid structure, and we can get a good pricing premiums for the -- covering these liabilities. So as sir has said that generally, it's our policy or practice, you can say, that we keep it open, take 5 years. And once the 5-year, they come under 5 years, then we try to cover it slowly, slowly.

Understood. Understood. Understood. And of the total liabilities, which is there with us, is it fair to assume that a major portion of what would be maturing within 5 years or the split would be equal or more tilted towards more than 5 years?

Almost equal.

Almost equal. So 50% of your liabilities would be within 5 years and of which 86% would be -- already been covered, what -- wherever the ForEx exposures had been in that way?

Right.

Correct. Okay. And secondly, just you say there is Jhabua, which is supposed to be getting covered and you gave one more name, right? Was it Essar?

Jal Power and Essar MP, Essar Mahan.

Essar Mahan, where you're expecting 40% to 50% of the recovery, right? If I'm correct.

45% to 50%.

The next question is from the line of Bunty Chawla from B&K Securities.

Sir, so my question was on the MBED, the market base, economic dispatch, which was announced by the Union Power Ministry some days back, which would maybe in a way help DISCOMs in procuring the power that can optimize cost. So how do you see that in conjunction with the recent infusion that we also did in DISCOMs? So are we heading towards structurally changed space for DISCOMs? And also, are we not seeing any asset quality headwinds as far as DISCOMs are concerned for a meaningful time now? So one on that. And the other on dividend, last year, we paid around a similar amount of dividend about INR 9.5 and also from REC, it was INR 11. This year's profits have been much, much higher than last year due to absence of credit cost and also margins have been pretty steady. So why the dividend was kept at the same level? Yes, these were the 2 more questions.

Coming to the first one, the market-based economic dispatch. So presently, I think these state-level merit order dispatch is happening. So within the state wherever they have a PPA, so the lowest variable cost plant is being dispatched. So this provides efficiency within for the state. But now what is being proposed is being on a national level. So the cheapest power can be sourced from anywhere over the country. And that will -- even if they don't have a PPA. So that will, going forward, reduce the cost -- procurement cost for the DISCOMs. And it will be a win-win situation because efficiency would be the paramount -- important parameter and the efficient plant will be dispatched more and the DISCOMs will get lower cost of power. So it is a good thing which is happening. And I think -- I believe that NTPC plants are already under this as a pilot thing, which is going on. So this will be a positive thing for the financial health of the DISCOMs as a whole. And the second question with respect to the dividend. So we have paid almost the same level as you had indicated, but this was based on the capital levels which we have. So we have to see that for our business growth and to see that ForEx fluctuations also, so these -- and the provisioning. So we have to take a view with respect to that. And based on the DP guidelines, we have provided dividend this year also.

So sir, barring this year, wherein the growth was relatively high, Do we expect a growth -- high growth to continue over next 2 years? I suppose growth was likely to get muted as you add into FY '22?

So last year, there was COVID and the implementation of the projects were slower, but we got this liquidity infusion scheme, and we were able to disburse to the discounts for clearing their Genco dues. So some of the disbursement will in tranche 2 will happen in this year also. And we believe that the implementation of the renewable -- especially the renewable projects will pick up during the current year, and we should have a reasonable growth going forward.

The next question is from the line of Punit Srivastava from Daiwa Capital Markets.

Sir, my first question is on this prepayment that happens out of this $20 billion -- around INR 20,000 crores, how much was during this quarter, Q4 and how much was the previous quarter?

So it mostly happened in the third and fourth quarter. As I had indicated, because of the liquidity package, the Gencos -- central sector Gencos got this dues -- their dues cleared, so they were in a position to repay their loans. And some of the renewable assets also, there was some prepayment, but that was smaller compared to the...

[Technical Difficulty]

Sorry, we got disconnected.

Yes. So my question was that apart from this prepayment that happened due to the Atmanirbhar scheme, was there any other reasons probably the corporate scheme listed about some renewals also got prepaid. And how do you see the trends in FY '22 in terms of prepayments? And in that regard, you also mentioned that the loan growth will be just about slightly higher than the current level, which is already very low at 7.5%. So do you expect this to touch like double digits in FY '22?

No, we are expecting good growth this year, as I had indicated, the liquidity package scheme, some disbursement happening this year and the revival of the renewable projects. And I could not -- your first question was. So as we had indicated that we have revised our interest rates and we have made it competitive with the banks. And going forward, we believe that the state sector projects may not prepay us and that is the hope with which we had reduced these interest rates.

Yes. The prepayment primary happened because 1 due to the liquidity available under the Atmanirbhar Bharat scheme with the Genco. And the other reason was that there was ample liquidity with the banks. So in few cases, the banks have refinanced the loan, which, sir, is referring to. And since we have reduced our interest rates, so we are expecting that there will not be any major segments going forward.

Okay. My question was also like of this INR 20,000 crores, how much was coming because of this liquidity scheme and how much is other than that?

So that exact figure, we would not be having, but...

See, it is very difficult to...

State sector -- it was divided between quarter 3 and quarter 4.

Right, sir. On this margin front, you mentioned that it should come down to around 3% levels. So in that regard, is this like you're expecting something like in FY '22 or you are seeing more in the medium term? And like how do you see margins moving in FY '22 and even forward?

So in the medium term, we expect this range to be maintained between 3%, 3.25%. And last year, it was a little bit higher.

The next question is from the line of Vipul Shah from Sumangal Investments.

My question was regarding this resolution that is Slide #18. I think -- so what is the recovery over and above the provision for all these poor accounts?

So you were mentioning about slide?

18, the 4 projects worth INR 6,844 crores resulted during FY '21. So my question is, what is the recovery over and above the provision for these 4 projects?

So it was almost -- the recovery was almost similar to the provisioning. I think in some projects, the provisioning was a little bit more as far as I...

So no substantial recovery was there?

No, not substantial recovery. We had made provision at a higher level. So as I had indicated that around 45% to 60% was the recovery. And actually in Essar Transmission, we had 100% principal recovery. So that was a figure which -- average figure, which I had indicated.

Yes. So in some projects, it was more and some less. Okay. Got it. Okay, sir. And my another question is, sir, what is your collateral when you lend to distribution companies?

So like in this liquidity package scheme, we got government guarantees.

No, no. That is one time. But generally, when you lend to a distribution company, what is your collateral? That is my question.

We have a policy that we as a principal security, we take charge on assets or state government currently. And plus escrow account in the both these cases.

Okay. So you don't lend to the distribution company without any of these things, whether escrow or state government guarantee?

So that is what security we have.

The next question is from the line of Mahrukh Adajania from Elara Capital.

Sir, I had one follow-up question. Sir, do you know the status of Lalitpur Power? Do you have any investment there?

We don't have any investment.

That was the last question. I would now like to hand the conference over to the management for closing comments.

Well, thank you for this opportunity. We have posted stupendous results. And going forward also, we will -- PFC would be giving good results. Thank you very much.

Thank you. On behalf of Prabhudas Lilladher...