Power Grid Corporation of India Limited (POWERGRID) Earnings Call Transcript & Summary

Greetings, everyone. On behalf of IIFL Securities, I welcome you all to the second quarter and first half FY '24 investors company meet up Power Grid to discuss the performance of the company and share performance outlook. We have the senior management team of Power Grid represented by Shri Ravisankar, Director of Finance and CFO holder, [indiscernible] Director of Projects; Shri Tyagi Director of Operations. I request the management to make the presentation subsequent to which the floor will be open for Q&A. Over to you, sir.

Thank you, [indiscernible]. So well good morning to everyone. So post publication of this Q2 results, I welcome you all for this investor and analyst meet. And we start with a small presentation. Okay. Yes, we will cover the valied overview and the major highlights and any performance highlights of this quarter with the growth outlook and any awards we received in this quarter in the overview. Next. You know that we are schedule Maharatna CPSC and the third is just we continue to maintain the third largest CPSE in terms of GasLog. We have a presence pan-India. We have a network in almost every state, every district. And we have growing subsidiaries. Now we have we have 39 subsidiaries with 11 joint ventures and 4 associates. The 4 associates are like we have a 26% stake in the previous, which we transferred to INWIT, that is 4 associates. In the -- and we have a global footprint in almost 23 countries. As far as credit rating, yes, we have enjoyed the highest credit rating in domestic and as far as international sites on par with the sovereign rating. As far as transmission assets, yes, we have on live 76,000 kilometers of kilometers or certain kilometers. We have 1,478 transmission lines. From last quarter, we have added one more substation with account becomes to 275 substations. The system availability continued to be above 99%. These are all just a breakup of like how many HVDC stations and 65 stations to break out of this INR 275. Next. This quarter, yes, we have 2 TBCB companies we have received with an annual tariff of INR 361 crores. The NCT cost is INR 370 crores. So both are like Rajasthan projects in Phase III, Part C1 and part H2 projects we won. So with that, up to Q2, we won 4 projects in the TBCB in the current year with an annual tariff of INR 703 crores and then CT cost is INR 6,393 crores. So this is up to Q2. Subsequent to that, yes, we won one more project in Phase IV, part. So that is the NCT cost is something like INR 4,700 crores with a tariff of INR 273 crores. So with that, the current year, yes, we have on the project worth somewhere around INR 11,000 crores. This is in addition to what we won in the last financial year in the February and March, something like INR 9,000 crores. We won 11 companies on last year and this year 5. So put together, it's around 16 companies. We will be acquiring maybe in another few months, we will acquire this 1 or 2 SPVs and so. And 2 more bids we have submitted for which the ERA is to happen. The major highlights covers the Le Lagan project, where the cabinet approved the Phase II 13 gigawatt Ari project. It is a line from bank to Cathal with a cost of INR 2,700 crores. It [indiscernible] 40% of the financial assistance in the form of grant. And it has a time line of like 5 years in the completion time line and being a difficult terrain at a high altitude of like 4,700 meters above C level and at as minus sub-zero temperatures. So this is the working conditions there is hardly 5 months to 6 months in a year. So it takes 5 years to complete. So this is equation of 13 gigawatts, but the line is the 5 gigawatt line. So maybe the generators may come up with the battery so that the APL of maybe a little more than that. So this is one project which is recently cleared by the cabinet, and we're yet to get the formal communication from the government regarding the modalities of how the grant will be given to us. And subsequent to that, we will take up for the investment approval. But we have already started the studies of front-end engineering design. And we said just in 2 parts, it is to be done and the first stage study has already started and then 2 HDC players have been given the job they are already undergoing the study. And then we expect that to complete by the month of March, April, they should be able to give the first case report. Subsequent to that, so they will undergo the second phase of study, and then we have to take up the bidding. So this is about the Lelar project. In the project execution, yes, we have commissioned one TBCB port Bikaner transmission and 2 Stacom at Bhadla and Bikaner have been commissioned and 6 numbers of ICT has been commissioned during this quarter, and this has added a 3,100 MVA capacity and 1 substation and 306 kilometers of transmission line. About the CapEx, the cumulative CapEx in the first half year is INR 4,246 million. This is against the yearly target of 8,800 we have envisaged this year. And since we have won some more companies, yes, this is likely to go up. Maybe we may be touching the 5 figures this time. So it should cross INR 10,000 crores this time. But as of now, up to September as we have achieved INR 4,146 crores. And capitalization is also almost equal. We have capitalized the INR 4,000 crores. It was INR 1,600 crores in Q1. Now we have added another INR 2,400 crores and then it becomes INR 4,000 crores up to Q2. As far as operational performance, yes, we continue to be above 99.75%, is 99.8% for the first half year. And the trippings also compared to the previous half year, yes, it has come down to 0.16 from 0.20. Stand-alone performance in the Q2 is, yes, our revenue has slightly gone up from INR 11,000 crores to INR 11,206 crores. And the PAT has also gone from [ INR 3,651 crores to INR 3,834 crores. ] Income also similarly in the consolidated accounts also, it has gone from INR 1,149 crores to INR 11,530 crores around INR 200 crores more. And in the PAT also, it is from INR 3,650 crores to INR 3,781 crores. In financial performance, for the half year, the revenue is INR 2294 crores and the PAT is INR 7,377 crores compared to previous half year of INR 7417 crores. Similarly, in the consol also, it is at INR 22,780 crores is the income as the is INR 3779 crores compared to the PAT of INR 745 crores in the previous year because last year, we had some onetime income, which normally directly contributes to the PAT. That is why the PAT is slightly more compared to previous half year and the -- in the console as well as the stand-alone. And these are only some of the figures, which are already available in the our NSE website so that the detailed results were the transmission charges total income as in the quarter, it rose by 2% and the PAT rose by 5%. Here, you can see that we not showing us the continuing operation as well as discontinuing operations. This discontinuing operations to signify the telecom services, which the Board has decided to carve out and then we have formed a separate SPV Power Grid teleservices in which the telecom operations will be taken up in the 1 October 2023. So as per the requirements of India's, this is to be shown as assets held for sale and to be shown as a profit from discontinuing operations separately. This is, of course, in the stand-alone as well as -- but in the console, there is no difference. It will be -- since it is in the same group, you will not find this line in the console. So put together, if you see the profit after tax, it's INR 334 million crores against INR 361 million crores of the previous quarter and registering a 5% growth in the quarter-to-quarter comparison in the stand-alone. Next. In the console, yes, we don't -- we are separately showing the telecom consultancy and transmission charges separately. Telecom income is INR 202 crores this quarter, and the cumulative half year is INR 393 crores. The last time also, we -- in the investor card, I think we targeted like INR 800 crores after transmission income for the telecom income. For the current year, I think according to that, yes, we have already reached INR 393 crores in the first half year. And consultancy charges is slightly coming down compared to the previous year because, yes, we have an RPS IP scheme for the last 2, 3 years, and then we have commissioned the major elements in that, and then it is slowly coming down. And then we're looking for rather business opportunities in the consultancy so that it will slowly again improve. And in the consol also, you can see that the profit after tax is INR 378 crores to against INR 365 crores, it is registering a 4% growth. These are all about the -- some of the balance sheet figures where we have gross fixed assets has crossed INR 270 crores, it is INR 273 crores, INR 276 crores, INR 2.73 lakh crores in the consolidated and INR 2.57 lakh crores in the stand-alone. And we have a capital work in progress of INR 14,900 crores, close to INR 15,000 crores in the console and our debt equity is now 58- 42 from 59- 41. It was in the last quarter. And last year, it was 61-39, it is touching 58-42. Return on net worth continues to be 8.51%,and the book value has shown as 93 because we have issued a bonus share. So last time, it was 114. So since subsequent to the issue of bond bonus issue, the book value is showing us 93.2%. Otherwise, there is no decrease in the book value because the company continues to be in the profit only. There are some other key important informations, which are all of interest to you, like these risks on income from previous periods and interest on differentiations, which contributed more in the last quarter last year in the Q2 as well as last year in Q1. So which is lesser in this current year. That is why you can see that the profit in last year was slightly more in the half year compared to the current half year because last year, we had the tariff orders for [indiscernible] so where we had to account the income of the previous year, so that's why it was more. As regards to the equity inclusion in TBCB, yes, it has increased from INR 3,600 crores last year, Q2 to now it is INR 4,100 crores, INR 500 crores more equity has been infused in the TBCB in the form of equity. Borrowing cost is average is 67.6%. The interest rates are slightly higher and last quarter, we were showing it at 7.5% subsequent to the increase in the domestic rates slightly the average rate has gone up because we have some bonds, which are all of fixed rates and then we have some floating interest rates, term loans and other foreign loans because of which slightly is increasing. Of course, some of most of the intrastates in the RTM are pass-through. And coming to the telecom performance, the income is INR 201 crores for the current quarter. And then we have added 36 customers and we have a presence almost in 3,000 locations in the pan India. So now this business has been transferred to the Powergate Teleservices Limited with effect from 1 October 2023. It is a 100% subsidiary of Power Grid. And this will be taking up the data center business also by the Power Grid teleservices, for which we gave an approval Power Grid has given all of INR 713 crores as investment approval. We will be setting up one data center in Manesar as a pilot project. So all is under progress and then maybe in another 15 months, it is expected to complete. And yes, we are exploring data center in other areas also. As regards consultancy, the income is INR 155 crores in the current quarter. We got 2 new international assignments. Of course, these are all small assignments to Fiji, one is on some consultancy and another one is on the training capacity building for Fiji. And there are new domestic assignments in the form of like bare maintenance. And then we have international businesses like we have talks with Kenya. We have submitted our proposal to Kenyan government in association with Africa 50. And then we are in Tanzania, and there is a consultancy work the 220 kV line in Sri Lanka. So these are some of the facilities in international businesses. And one more daily, we have formed the Bodal Graco with a past of INR 693 crores with the 50-50 JV with the NES. Commercial performance, yes, the realization has gone up from the last quarter. It is 92.37% is the percentage realization. And we were getting the payments due against the LPS rules of 2022 noted by the MOP. So far, we have received INR 1,383 crores against the INR 2,400 crores. This is the monthly installments have been converted against the NPS also by the 6 discounts, which we are receiving regularly. There are some major dues from Tamil Nadu, J&K, Telangana and Uttar Pradesh, we expect this to liquidate soon because the use of Tamil Nadu is mounting because there was an issue in the tariff of the Rigorous challenged by them. And then recently, 27 October, the order has been issued by the CERC for making this Ragatugalur as a 50-50 component compared to the earlier regional component of 30-70. So we expect the use of Tamil Nadu and Telegana and this account come down, and there was no alarming dues from other [indiscernible]. And as regards to the working hand, yes, it's around INR 50,500 crores. Of course, this improved some more projects which we have recently won and taken up. We can add another INR 800 crores to INR 9,000 crores in that. So somewhere around INR 60,000 crores, INR 65,000 crores will be there as a work in hand. Of course, in the new RTM projects, which we show INR 24,300 crores, this includes the Lead for which investment approval is yet to be granted because we are waiting for the formal communication from the government. So once that formal communication is received, so we will take up with the board for the investment approval. So that out of this INR 24,300 crores, that accounts to around INR 2,700 crores. And then INR 16,500 crores and other projects, which we are showing includes around INR 13,000 crores as TBCB and INR 2,800 crores as a smart meter. So current year CapEx guidance is like INR 8,800 crores which we projected earlier against INR 5,000 crores as RTM and INR 3,800 crores as others. Now we see a little upwards in that, and it should be somewhere around INR 10,000 crores. The business outlook, yes, the same slide, which we have shown in the last quarter also because only this is out of the INR 2.4 lakh crores, which they envisage against the investment of 500 gigawatt of generation by 2030. So in that, we envisage a portion of like INR 16,500 crores. And intrastate is corresponding, this is only our estimation like parallel investments in intrastate, somewhere around 70%, 75% on the 2.4 lakhs crores we assumed and then we assume that some percentage will be coming through TBCB. So that is why on a conservative basis, we are showing it at INR 37,000 crores. Cross-border, we envisage a INR 10,000 crores. Of course, these are all the targets in the next 9 years. On international projects, like Kenya, Tanzania and other African countries or other Naple and other countries, we envisage something like 7,500 solar generation, INR 1,000 crores, we estimate because already there is one plant we are setting up in Nagda, which was recently inaugurated, and then we have awarded the contracts also, and we expect it to commission in another maybe by 12 months. It has got 85 megawatt of solar generation. And smart metering infrastructure, we project INR 15,000 crores. This includes the 69 lack of smart meter contract, which we got from the 2 discounts of government of Gujarat. And the data center business, as we project INR 1,000 crores. Of course, this is a target for 10 years, suppose if we are successful in this monitor, probably, this figure has got a potential to be in the upward side. This is about the -- almost the outlay in the next 9 years. And regarding the sustainability aspirations to comply with the ESG guidelines. So we had an internal target of like 50% tougher auxiliary consumption through renewable sources by 2025. This is an internal target, though, we have a target of INR 2,047 crores as the net zero, but we have an internal target to achieve at least 50% by 2025. Net water positive by 2030 and then 0 waste to landfill by 2030. These are all -- some of the policies have been adopted [indiscernible], and we hope to achieve this. And some of the awards which we got in this quarter is the certificate of excellence in learning and development as such a mainland Danone Backstreet PSU Award in Power Transmission, we have Brandon Hall Group excellent Awards in learning and development area. So these are also some of the awards we got in this quarter. And I think with that, I'll just pass and then we can take up the -- any question and answers from the [indiscernible]. Thank you, everybody.

[Operator Instructions] Moderator, can you unmute line of Mohit, so that he can ask this question. Go ahead. Mohit, we are unable to hear you. Maybe there's some issue with his line. Moderator, can you unmute line for Shreya. Yes, go ahead.

This is [ Shreya from Cogent Capital. ] I just wanted to understand this CapEx target of INR 10,000 crores. While you've given the breakup of INR 8,800 crores. Could you also give a breakup of this INR 10,000 crore, which you expect to finally achieve? And then we have this -- I have another question on your international projects, which you mentioned that there is Kenya and Tanzania in the -- as targets. But can you tell me that we've read reports on the undersea cable lines that India is having with some countries the power grid will play a main role. So have you considered that also in your CapEx for 2022? And if you could just give a little more details on your data center business that you're planning? So these are a few questions.

Yes. Thank you. Regarding data center, I'll go from that. Data center, yes, we are setting up a data center in Manesar as a pilot data center. We will be setting up 2 floors initially. And then depending upon the business, it can be scaled up to 6 floors. It is a hyperscale data center, which is being set up in the Manesar. This is -- will be taken up by the power it Heliservices, which is the 100% subsidiary of Power Grid. And then your question on international business. Yes, we are doing with Kenya, we have a 40-60 JV with the Africa 50, and then we have submitted our interest to build a line in Kenya. It will be a line on by an SPV formed for that. And then the project will be executed by that SPV. And under similar lines, yes, we are in talks with Tanzania also to build transmission lines. And we will be joining hands with the Africa 50. And then we are in talks with them how the modalities of recoveries and how the tariff structure will be for that project. So this is about the projects of Tanzania and Kenya. As regards this undersea cable, yes, there are some -- it is in the very preliminary stage. There are talks with like connecting Oman or connecting Singapore or connecting Maldives, Sri Lanka. So there are some intra-country connection sea cable projects are under study. As of now, there is no concrete any agreement that order from any of the countries. Only we are undergoing the studies about the feasibilities and then we are studying with the similar infrastructure available in other continents and then we can submit proposal. As far as Sri Lanka, yes, we were given the job of preparing the DPR. So we are in the job of preparing the DPR of the project from connectivity from Pito Sri Lanka. And as regards the CapEx of INR 10,000 crores, you can assume it is INR 5,000 crores in RTM and then INR 3,800 crore what we have shown. So you can assume 50-50 like INR 5,000 crores in RTM and INR 5,000 crores as TBCB projects.

We'll take the next question from Anuj Upadhyay.

Okay. So slight confusion regarding to the Late project. In our last call, we have mentioned the total project cost was NBC at INR 27,000 crores, of which nearly about INR 9,000 to INR 10,000 was a grant from the central government, which eventually led to our CapEx target of around INR 16,000 crores. Now this figure of INR 2,500-odd crores. Is this the total project or is just a partial cost which has been approved by the central government data? And how much of this the grant will act?

It was initially INR 2,700 crores probably you would have heard us INR 27,000 crores, but it is -- this 20,700 includes the grant of INR 8,000 crores. As such, assumed the envisage the project cost is INR 2,700 crores, which includes the granted INR 8,000 crores. As such, our CapEx portion will be INR 13,000 crores as an date in that project. So this INR 20,700 crores includes the grant. It's not 20,700 plus another INR 8,000 crores as a grant.

[indiscernible] or do you have a follow-up. Okay. Moderator, we'll take the next question from Mohit, can you unmute his line.

I have a few questions. So first on the outlays, the outlay slide, you are speaking about the target, right? These are targets based on how much you'll wait for interest rate and intrastate. Is it the right understanding? Secondly, what is the total opportunity size which you think until 2032 for interstate and intrastate.

We have given that interstate has INR 116,500 crores and intrastate INR 37,000 crores. Basically, the purposes like all interstate are either it should come through TBCB or maybe some portion, maybe on nomination basis depending upon the project importance it and national importance maybe some few base has to come in my substation means maybe through our team. So this is how all the -- we have a visibility almost about the 2.4 lakh crores that is how this will come. As far as interested, why we have considered as the INR 37,000 crores is only yes. As far as -- interest rate is concerned, normally, we consider 80% of this INR 2.4 lakh crores. And in that only 33% of the opportunity suffered under TBCB and with our strike rate of 50,000 -- 50%, we are assuming it has something like 30,000 37%. So our CapEx as of now what we have shown, like INR 50,000 crores in hand and down, that doesn't include any of this intrastate because intrastate are supposed to come through bidding or maybe through any JV route, which they will have to decide. So that as an debt, whatever the projects which we have in hand, that doesn't include any of the projects have entrusted. However, the projects -- the outlook, which we are showing as INR 18,000 crores for the next 9 years, that includes a portion of INR 30,000 crores, INR 35,000 crores as interested, which we foresee, assuming that some portion will come through TBCB and maintaining a strike rate of 50%. Yes, we should be able to bag something like that INR 30,000 crores, INR 35,000 crores.

Understood. So you are expecting to win 30% or 30% share in the transmission bidding interested and that's how you did the number. Is that right?

Yes, because... Interest at normally -- and that they will have to come through bidding, something they may execute on their own or they may even give it on consultancy. They may they may form like they can give it as an EPC contractor. So there are so many ways of handling the intrastate projects. So since we are not done, it may differ from state to state also like now UPS has come up with 2, 3 projects in TBCB, some they were executing on the 1 MB, we executed on UPS, we executed 3. So there are -- maybe other states will follow that, and then we may get -- so that's why the assumption is on the little conservative side.

Understood. Sir, my second question was why the bidding activity is slow in H1, are you seeing a strong possibility of culmination of a lot of bids in the H2? And any update on the quantum of bids where tenders have been floated already?

No. I see that it is very slow. Now if you see in this is especially this calendar year 2023, we have won almost around 9 plus 14 projects we won. And if you assume this has a 50% strike rate, around 25, 26 projects have already been bid out in this calendar itself. It was low in the during COVID period like in 2020, 2021, there were not much projects coming up through bidding, but now that it has picked up and then we foresee that the bidding to come. And even if you see there are so many projects which have analytically identified and then it was in the BPC websites also, which for which we will have to submit our bids, like already there are around INR 9,700 crores of projects which are under bidding which covers the Rajasthan, Kanda and others. So I don't see that it's very slow. Now it has picked up compared to last 2 years, if you see this current year 2023, yes, it has picked up.

Understood. My last question is when do you expect to award a Lata project and when do you expect to commence what? Do you think this will get bid out in FY '25?

Yes. FY '25, it's a little tough years, but we see that how the FEED study of Phase I and Phase II to conclude after that, probably when the FEED II study completes, yes, we should have a clear-cut vision that how the BOQ should be there. And then even the HVDC players will be very clear that how their equipments will perform in that such high altitudes of 0 climate conditions. So it should be maybe award FY '25 in the last quarter, we can try in that. So we are also targeting in the FY '25 last quarter or maybe in the first quarter of FY '26. So maybe your assumption is almost is matching, yes.

So if you don't mind, I'll take a couple of questions from the chat box. So first one is actually from [ Babrica. ] His question is, what is the total CapEx on 11 TBCB projects won in FY '23, plus 5 TBCB projects won thus far in FY '24. Second part is what is the total equity component of this? How much equity has been invested so far? And then what is the total transmission revenue once these 16 projects are fully commercial. Yes.

Current TBCB projects will be something like INR 8,500 crores to INR 9,000 crores as the CapEx and then the tariff quoted is INR 950 crores. And for the 5 TBCB projects, it is something like INR 11,000 crores, and the tariff quarter will be something like 800 -- INR 975 crores. So put together, if you see, it will be something like INR 1,800 crores to INR 1,900 crores when we commission all these -- the 16 SPVs. As regards to the component, yes, it can be 80-20 or 90-10, depending upon the requirements, we can put the equity.

Second part of this question is what is the regulated equity of all the RTM projects as of September '23.

Regulated equity no, return on equity is 15.5%. So regulated equity is supposed we have predominantly all less RTM projects. And then it is something like 90%, 95% is only RTM only. So you can assume something like INR 86,000 crores is my results and surplus, and then you can assume something like INR 82,000 crores as a regulated equity in that.

Sure.

Any businesses, which we put the equity. So we are putting equity only translation business and certain yes, we don't need to put anything and telecom, we are not putting -- it's not a very major investment we have done. So whatever appearing in our results in surplus, and we have shown like INR 4,100 crores as the equity in TBCB and if you deduct that, it is INR 82,000 crores. [indiscernible] is a I'm just telling you, like figure appearing in my balance sheet is INR 860 crores and INR 4,100 crores I have shown as equity in TBC is maybe TBCB.

Got it. Very clear, sir. The second question from the chat box is from [ Vipul Kumar. ]

So this relates to the balance 26% stake in 4 assets you transferred to Power Grid invade. When are you going to transfer the balance 26% stake to iterate?

Actually, last year -- last financial year, only 1 project completed 5 years, that is a column and the quantum is hardly something like INR 20 crores, INR 30 crores. And current year so far in balance, out of 3, 2 projects have completed 5 years and 1 more to complete by December '24. So I think we can take a call in the fourth quarter, and we can take a decision of how mutually if we are agreeable, we can transfer the balance 26% also. So as such, since these are all small amount and then hardly this involves a stake of hardly INR 500 crores to INR 600 crores. So we thought that, yes, we can get the valuation done once all the projects get completed in the period of times.

Got it, sir. So Nikhil will take the question from the audio line.

Yes, sir, one more question on the previous line is only regarding Power Grid invite. So at the time of IPO, I think it was thought that this will be a vehicle for farmers to monetize their operational assets, and it will free up the resources for our pay to probably grow at a faster pace. But what we have seen in the last 1 year has been a complete u turn in terms of that policy. So a, they have not been able to get the stakes from you as per the scheduled time line of all these 5 assets. And b, there is no visibility also ever in terms of the additional assets, which would have flowed from Power Grid either for Power Grid specifically or for the one large. So sir, then going forward, what is the sort of stance of the management on these 2 issues?

Now one is about PG in [indiscernible], yes, I won't be able to comment on them because it is a separate listed entity. Last time, yes, there is a agreement where we can -- if we are mutually agreeable, we can transfer the balance 26%. So that I told you that this is a very small amount, which we thought, yes, we can see the fourth company also gets completed the period of 5 years, and then we can get the valuations done and then we can do that. This is one thing. About the other one, these other projects, yes, subsequently, because of the NMB guidelines, yes, the transfer of subsequent assets through the earlier mode is not feasible. So that is why we have adopted the method of securitization of the cash flows, and then we were monetizing the assets, which is as per the NFP guidelines, and it complies with the NMB guidelines.

So going forward, you will not be down selling any of your assets to [indiscernible] is that a centers?

So we can't assume like that. As of now, the NMB guidelines doesn't permit to transfer the shares permanently to next PG, not only PG so anyone. So this is what the NMP guideline says. So as of now, this is the position.

Understood, sir. And on the normal on the transmission business now, we've been hearing a lot in media for the big CapEx plan, which is ahead of us annually...

Your line is breaking. Can you be a little louder because it...

Yes, sorry. Is it better now?

Yes, it's better.

Yes. So the second question was on the transmission assets. So there have been a lot of media reports that we are seeing a very large pipeline of sort of transmission assets coming into play in terms of -- because the old assets also need to sort of get into newer ones as they come to 50, 60 years sort of a life cycle. So given that, sir, are we seeing sort of an extraordinary growth opportunity for us in the coming few years? Or we feel that we will be continuing along the same sort of a growth path that we have been doing in the last 2 years.

Unlike INR 80,000 crores in the next year is a little -- I think it's a decent figure. It should normally go up from the present level. So there are opportunities. That is why we have shown in that slide that yes, there are more opportunities. And then, of course, this doesn't -- this includes only the RE generation-related transmission assets. In addition to that, also, there may be some assets coming up. And from the present level of like INR 9,000 or INR 8,800 in the future years, just there are possibilities of the CapEx going up. Like next year, we have an initial target of INR 12,200 crores as of now. So this year also, when we projected INR 8,800 crores now we see that it's going a little upside, and then we should touch at least 5-digit figures this year. And then next year, it should be INR 12,500 crores as of now. And of course, the HVDC projects and are in the cards and then depending upon the outcome, the CapEx for next year will be formed off maybe in another 3, 4 months. But as you say, yes, there are opportunities in the next few years to higher potential CapEx.

And sir, finally on the data center business. So what exactly is our strategy in this? Because there are many big players like Reliance and Avi has also entered this sort of a business. And then you need some specific capabilities for building the data centers as well as for putting it out on rent. So what exactly are we planning a joint partners, JV partners for building it? Or are we planning to rent it out so we need some JV? Or do we have existing tenants who would be occupying this? So how are we thinking about the data center business?

So it is like competing with other players only. As of now, we didn't think of joining hands with either Reliance or large somebody. So we can also -- since we feel that, yes, we have done the communication business for a quite long time last 20 years, and we feel that we can get ourselves adopted in this one. And being a government entity, we feel that yes, we may haven't hedged about some of the storage orders, we may get it, and then this is the purpose like we can -- and we have like a piece of land in Manesar, so we thought we can utilize this for the setting up of data centers. And not only this one, we can even go in for other private lands also where there are the data centers in existence, we can set up and then we can do. And then as of now, there is no plan to join hands with anybody or joining a JV with any of the players. We thought, yes, we can -- we feel that we have the capability to do that on our own. If required, we can have some consultants to advise on that expert advice, we can take the exports and then we can carry on. So this is only -- that's why we are setting up one pilot data center, depending upon the success, we will have a co-location there. Also we can have a storage. We can do the business there. And depending upon the success we can escalate that we can expand that.

Sir, this is for how many megawatts.

There's about 10 megawatts. Actually about 8 megawatts. And in second phase, it will be 14 megawatt.

So INR 1,000 crores is for 22 megawatts.

INR 700 crores. So initial investment is INR 700 crores. So INR 1,000 we have projected of TL2032. Once we are successful in that, maybe the INR 1,000 crores will be going up.

This INR 60,000 crore seating pipeline that we have, what is the time line for that, sir?

You can assume something like 12 to 18 months maximum.

And then there will be around a 2-year execution period for those, right?

Yes, it will be like 24 to 30 months, you can assume. So something will be 2 years, something will be a 2.5, something maybe at 3 years like HBDC will have a little longer period.

And just on supply chain, is there some issue around availability of key equipment like transformer and all?

Yes. Actually, since the how many projects are coming up suddenly. So there is a challenging that transformers and other equipments. And even the DC equipments where the RE integration is in full seminar of that, yes, there are issues in that. But still, we are...

18 months motion.

If the -- normally, when the time line is 18 months and above, there are players who can supply the equipment. This is one part. And as far as TBCB and most of the -- our contracts are on firm price, we are somewhat insulated from the price escalations. And as of now, wherever the time schedule is about 18 months, we don't have any issue of supply chain issue. Therefore, this is one part of our transformers otherwise, predominantly, if you see, we have a lot of structures conductor insulator so many parts, and then this is 1 portion.

And last one is apart from the INR 60,000 crore projects which are under bidding for last 12, 18 months, I mean, what could be a new pipeline that could come for -- from the next 1 year perspective?

Yes, that will be another INR 67,000 crores, which are to come for bidding, which is already approved in the NCT and then another INR 45,000 crores for which the planning needs to happen. So this accomplished this INR 2.4 lakh crores. Basically, the transmission envisaged in this 500 gigawatt by 2030 and say the INR 2.4 lakh crores in that, when the long things happened and then the bids which are in the RFP stage. So if you exclude that, another INR 67,000 crores of bidding to come in future and another 45,000 is in the initial stages.

Moderator can we take [indiscernible] next. I think there's an issue with this line. Maybe we can [indiscernible]

Yes. again. [indiscernible] mentioned the cumulative equity we have invested in debt across the TBCB project. And this is excluding those 5 projects, which we have already transferred to invite...

Yes. Yes, whatever we have shown like INR 4,100 crores.

With the equity. And the revenue and earnings from the same...

Sets which have already been transferred. Maybe it has got that -- that is excluding the 5 companies because that equity has already been sold.

For certain projects, we do have 26% still retain, sir. So does this include those 26%?

That we are actually showing as assets held for sale. So that is not forming part of commerce PPE as per the standards, and there is an intent to sell. We cannot continue to show it as a PPE. So it has to be showing as investments held for sale.

Fair point, sir. And the revenue and earnings from the same during the quarter from these assets in TBCB. The revenue and earnings from these TBCB projects for the quarter, if you can share the numbers, it would be helpful, sir.

Which TBCB all TBCB's?

All TBCB, sir.

Okay. As a stand-alone and consol we have a yearly revenue of INR 1,300 crores in TBCB and the profit is INR 413 crores.

That's helpful, sir. And lastly, sir, you referred about INR 10,000-odd crores of CapEx target, which we are laying for the current fiscal. Can you provide a similar number of target for FY '25? And also if you can throw some light on the capitalization target, which we are ring for FY '24 and '25 as well.

25% from INR 10,000 crores, it should be on the higher side only. As of now, we are projecting INR 12,500 crores, but that is the figure as an debt, but suppose if we are able to win some bigger projects in the like [indiscernible] it should be on the little higher side. Capitalization, current year, we are projecting at INR 10,000 crores out of which INR 4,000 we have already done. Next year, we are projecting something like about INR 15,000 crores, something like INR 17,000 crores we are projecting. This includes TBCB also.

So I'll take a couple of questions from the chat box. The first one is actually from [indiscernible]. So I think you've addressed that this one is not Sashi. Have you finalized upon the smart meter supplier rate? If not, will it be through bidding or otherwise?

So smart meters...

That's right.

Ho have you... we have already tied up with the suppliers. The further 2 orders, which we got from Gujarat, we have back-to-back tie with the vendors and then they will be security.

Supply will start by end of December or early January. Technical parameters have been finalized. Now these are under manufacturing by end of December or early January, the supply will start.

Got you. The other question is from [indiscernible]. Sir, is there any progress on regulated equity. I suppose he is referring to the draft tariff regulations by the MCS.

Actually, the approach paper has already come out and then we gave our comments on done. Normally, as per the time lines, yes, by November and December, the draft regulations published. This is historically we see in the last back year also. So maybe next month, we expect the draft to get published.

The other question is from Codina, I guess I couldn't speak over the line. Does the INR 59,700 crores pipeline include 3 HVDC projects approved in NCT. What is the status of these HVDC projects... That's the first one.

Which is to come for bidding. INR 9,000 crore, only 1. Yes, in INR 15,700 crore, then is only Badlar is included. Other HVDC, which are to come for bidding. I mean, it has not come. So that will be in the second one, which is like I have told you like INR 67,000 crores in which it was already approved in NCT and to comfort bidding in that balance to HVDC Swish.

Okay. Correct. Second part of the question is, what is the kind of feedback you're getting on CSC towards the tariff control period.

They don't get any feedback. We only give the feedback on tariff -- we are giving our comments on the approach here.

Sure. I think we'll come back to the question in the queue. Can you [indiscernible] please.

Yes. Most of the questions have been answered. Just one on the surgeon. Could you explain the negative seen surcharge for this quarter?

For the quarter. No, charging No, no. There was a... Less...

They have separately in beta...

No, no, no, no. It was -- there is a -- in consolidated, we are showing it at minus 7% as a surcharge. Maybe some payments would have been regulated, like some collections happened and then it might have been regulated. That's why it is negative. We will check it up and then derivative at you.

All right.

Otherwise, you see that surcharges are coming down because of the regulations in place where like after 75 today, the regulations happens. So that is why the has improved. But this negative will be on for...

So we have last 2 questions. Second last one is basically from Mohit, go ahead.

I've already got the answer.

Yes. My question is, sir, do you see any issue in executing the StatCom project especially? And how many equipment suppliers are there for Satcom as of now in this country, who can meet your localization requirement?

No, I don't think there has been a major problem in commissioning of the Stratcoms because this is a technology, which is not very old. So therefore, the final commissioning takes time. And we think there are 2 or 3 Stratcoms suppliers still like one is Siemens, other is Hitachi then other players than wholesale is also that is also trying to come. So 3 or 4 suppliers out there in the market. All this is not a very old technology. That is why commissioning takes a bit of time.

Because I think our expectation is that Stratcoms investment will go up, right? I think there are a lot of numbers of to put by the CEA NCD. Is that understanding correct?

Yes. Then because of the -- it provides a very much done compensation because of this intermittency in the renewable generation. Therefore, a lot of Stratcoms have to be set up in view of this 500 gigawatt of target of nonpersonal. So that understanding is very much okay.

My second question is what are the dues against Ricard and Parlor from the Milato and Telangana. And how the payments will happen is we build to allow them some kind of leeway for the payment or the payment is due immediately?

It is -- you see earlier when the CERC orders came, we were billing and then they were paying also. And in between, they have contested in Madras High Court, and then it was referred to Atal. And then Atal has set aside the orders and remanded back to CRC for reviewing it, along with the grid controller and CEA and Citi. So this was -- and even when we approached the Supreme Court, they have also given a time line of before 31 October, it is to be resolved. And then on 27 October, CERC has already issued orders of making it as 50% as national component and 50% as a regional component. In between, they have adjusted whatever the INR 1,200 crores of payment they have made against that. So we have again requested them to make the payment of whatever the adjustment. And Telangana will be paying now. So they have adjusted around INR 450 crores, which they will be paying now. And Tamil Nadu also has to pay because we have recosted them. And the billing of 50-50 will be from the 27 October, that is the data further of CFC. As of now, we feel that yes, it should see an end.

So we have last question for Sonia. There seems to be some issue with the line. I think that we are more or less [indiscernible]. I sincerely thank the management for giving us an opportunity into what is the opportunity ahead of power on behalf of a very much and with the entire team of tissue or any happy divided. For the participants in case any of the questions remain unanswered do let us know ends to power grade ultimately 20 and they do the need -- so any last remarks would be great.

Yes. We will say that, yes, one is happy Diwali to everyone. And then company, there is no change in the basics and the operational maintenance and the availability continued to be about 99.75%, and then a lot of CapEx is on the growing side, and we hope that it crosses at least INR 15,000 crores next year. This is what our aspiration and then the -- a lot of outlook is right and then he has a lot of projects to come in coming years. So this is what we got. I would like to close and once again, wishing you a happy Diwali and safe Diwali and as we and post Diwali, we [indiscernible]. Thank you.

Thank you, sir. Really appreciate it. Thank you. So Nikhil, you'll stop the recording.