Powergrid Infrastructure Investment Trust (PGINVIT) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 and FY '25 Earnings Conference Call of Powergrid Infrastructure Investment Trust Limited hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Nidhi Shah from ICICI Securities. Thank you, and over to you, ma'am.

Thank you, Pooja. Good morning -- good evening. On behalf of ICICI Securities, I invite you all to the Q4 FY '25 earnings call [Technical Difficulty]. Hello?

Yes, ma'am. Go ahead.

You interrupted me. Are you able to hear me?

Yes, ma'am, I'm able to hear you now.

Okay. So just to repeat again, from the management, we have Mr. Naveen Srivastava, who is the Chairman; Mr. Sanjay Sharma, the Director; Mr. Amit Garg, Director; Ms. Neela Das, Chief Executive Officer; Mr. Gaurav Malik, Chief Financial Officer; and Mr. Shwetank Kumar, Company Secretary and Compliance Officer. We will start the call with brief opening remarks by the management, which will be followed by the Q&A. Over to you, sirs and ma'am.

Good afternoon, everyone. On behalf of POWERGRID Unchahar Transmission Limited, the investment manager to PGInvIT, I extend a warm welcome and sincere appreciation to all the participants for joining this call. Today, I'm joined by Mr. Sanjay Sharma, Director of PUTL; Shri Amit Garg, Director of PUTL; Ms. Neela Das, CEO of PUTL; Mr. Gaurav Malik, CFO of PUTL; Mr. Shwetank Kumar, Company Secretary and Compliance Officers, along with other senior officials. Further, I also wish to inform that Dr. Anupam Arora has joined as Independent Director of PUTL with effect from May 19, 2025. Earlier today, on May 26, 2025, Powergrid Infrastructure Investment Trust, PGInvIT, announced its financial results for the quarter and financial year ended March 31, 2025, along with distribution details for Q4 FY 2024/'25. These documents are available on the website of BSE, NSE and PGInvIT. The detailed investor presentation covering the Q4 FY '25 and full year FY '25 financial performance has been uploaded to our website. In the interest of time, I will now share a brief overview. PGInvIT's investor base has grown steadily from approximately 15,000 unitholders at the time of IPO to over 1.89 lakhs unitholders as of March 31, 2025. We sincerely thank our investors for their continued trust and support. Let me begin with a brief introduction of the trust to our new investors. PGInvIT is an infrastructure investment trust with Powergrid Corporation of India Limited, a Maharatna Central Public Sector Enterprises and India's largest power and transmission utility acting as its sponsor and project manager. POWERGRID Unchahar Transmission Limited, a wholly owned subsidiary of Powergrid, serves as investment manager, while IDBI Trusteeship Services Limited is the trustee. PGInvIT currently owns 5 SPVs, special-purpose vehicles, namely VTL, KATL, PPTL, WTL and JPTL. It holds 100% equity in all the 5 SPVs. These SPVs operate 11 transmission lines, covering almost 3,699 circuit kilometers and 3 substations with a combined transformation capacity of 6,630 MBA. All are fully operational, revenue-generating assets, governed by a long-term transfusion service agreement, TSA, with an average remaining life exceeding 27 years. These interstate transmission system, ISCS, assets implemented under tariff-based competitive bidding framework on a build, own, operate and maintain basis, have a 35-year contract tenure. This minimizes regulatory risk on tariffs and ensures long-term revenue visibility. Backed by India's largest transmission utility as both sponsors and project manager, PGInvIT benefits from operational strength, consistent asset availability and high reliability and safety standards. With availability-based tariff transmission service agreements and low leverage levels, PGInvIT ensures predictable cash flows while maintaining flexibility for debt-funded acquisitions to support future growth. These trends position PGInvIT to create sustainable value to its unitholders. Our objective remain clear to deliver consistent, stable and predictable returns to our investors. Distribution. Let me now move to the distribution for Q4 FY '25. Earlier today on May 26, 2025, a distribution of INR 3 per unit was declared for the quarter ending March 31, 2025. This marks the Trust's fourth distribution for FY 2025 and the 15th consecutive quarterly distribution since listing. Unitholders will receive this distribution on or before June 5, 2025. With this latest declaration, PGInvIT has distributed a cumulative INR 46.50 per unit since its IPO, which was issued at INR 100 per unit, amounting to total distribution of over INR 42.31 billion. This quarter 4 distribution brings the total payout for financial year 2024/'25 to INR 12 per unit in line with the guidance provided in the earnings call for Q4 FY 2024. We remain committed to maintaining this momentum and aim to deliver INR 12 per unit distribution for FY '25/'26 as well. Our quarterly distribution are guided by PGInvIT's distribution policy and in compliance with SEBI InVIT regulations which mandate the distribution of at least 90% of NDCF, net distributable cash flows to unitholders. In accordance with this policy, distributions are declared and paid not less than once every quarter. Now I'll come to the highlights for the quarter and financial year ended March 31, 2025. Operations. Leveraging cutting-edge technologies and maintaining a strong focus on safety, our project manager has ensured the efficient and accident-free operations of PGInvIT Transmission assets through a quarter. The average availability across each SPV exceeded the stipulated targets, reflecting their strong operational performance and reliability. Based on provisional data, the average availability of FY '25 was over 98% across all SPVs. Please note that these figures are provisional pending the receipt of monthly availability certificates from regional power committees under Ministry of Power Government of India for the period January to March 2025. As many of you may be aware, one of our SPV PPTL is currently undertaking a project under the Regulated Tariff Mechanism. This project titled implementation of 400 kV line bay at 765/400 kV Parli Substations for RE Integration. This was awarded by CTUIL with a completion scheduled by December 2025. The project has been granted transmission license by CRC, award has already been placed and -- for the execution of the project and is progressing well. I'm pleased to share that there were no accident reported during core financial year 2024/'25. On the CSR front, corporate social responsibility front, PGInvIT has provided medical equipment to 14 primary health centers across multiple states. The total CSR expenditure across our 5-year series amounting to about INR 6.75 crores. We are proud to have achieved 100% compliance with CSR obligations under the Company's Act once again this year, continuing our consistent track record. Now I'll come to the financial highlights for the Q4 FY '24/'25. PGInvIT reported a total consolidated income of approximately INR 3,201.35 million. This includes INR 3,113.26 million revenue from operations and INR 88.09 million from other incomes, primarily comprising interest incomes from deposits. Total consolidated expenses for the quarter, excluding impairment charges stood at around INR 1,247.50 million. For the full financial year FY '24/'25, the total consolidated income also stood at INR 13,050.55 million with operational revenue of INR 12,664.93 million, and other income of INR 385.62 million. Consolidated expenses, excluding impairment, remained at INR 4,608.58 million. Profit after tax for FY '24/'25 has increased to INR 11,718.93 million as against INR 9,817.32 million in financial year '23/'24. Earnings per unit has also increased to INR 12.92 in financial year '24/'25 from INR 10.18 in financial year '23/'24. Total assets are also increased to INR 101,872.35 million in financial year '24/'25 from INR 99,826.37 million in financial year '23/'24. Fair value NAV per unit also increased to INR 94.12 in financial year '24/'25 from INR 85.28 in financial year '23/'24/. NDCF calculated at SPV level has also -- has been included in the consolidated financial results. The Trust received cash inflow from SPVs in the form of interest income, dividends and debt repayments. In line with SEBI InvIT Regulations and PGInvIT Distribution Policy, over 90% of the NDCF generated at the SPV level was upstreamed to the Trust by March 31, 2025. PGInvIT's NDCF for the quarter ended March 31, 2025 stood at INR 2,858.65 million. NDCF for the full financial year FY '24/'25 stand at INR 10,810.15 million. The declared distribution of INR 3 per unit for Q4 FY '25 comprises of following components: interest income is INR 1.67 per unit, taxable dividend is INR 0.48 per unit, exempt dividend is INR 0.09 per unit, SPV debt repayment is INR 0.75 per unit and treasury income is INR 0.01 per unit. The total distribution exceeded the regulatory requirement of distributing at least 90% of the NDCF at the Trust level, reaffirming PGInvIT's commitment to its distribution policy and regulatory compliances. As of March 31, 2025, PGInvIT's outstanding external borrowing stood at INR 10,723.19 million, which includes an outstanding loan of INR 5,669.51 million loan secured from HDFC Bank in March '22 and additional INR 5,053.68 million loan raised in December 2024 to fund acquisitions. Both are floating rate loans linked to a 3 months treasury bill and the repo rate, respectively, with an average cost of debt at 7.92% for FY '25. I want to thank -- thanks to PGInvIT's net debt to AUM ratio, the Trust is well positioned to finance future acquisition entirely through debt, while maintaining the financial flexibility. The Trust continues to enjoy the highest credit rating, AAA with a stable outlook, from ICRA Limited, CRISIL Rating and CARE Rating. Bill trade receivables as on March 31, 2025, stood at INR 854.10 million, representing 25 days of billing. Acquisition of balance 26% equity shareholding, PGInvIT in its Q2 FY '24/'25 earnings call had informed that remaining 26% equity share, equity stake in 4 of the SPVs, KATL, PPTL, WTL and JPTL will be acquired from Powergrid during FY '25. We are pleased to inform you that this acquisition was successfully completed on December 30, 2024. The development was duly communicated to all unitholders and the public through stock exchange filings and updates on our website. Revenue from the acquired 26% stake in these SPVs has started occurring to PGInvIT from Q4 FY '24/'25 onwards. Now I'll come to the outlook. Our growth strategy remains focused on acquiring operational power transmission assets in alignment with InvIT Regulations, requirements and the long-term interest in our unitholders. While we are fully committed in generating values to our unitholders, it is important to acknowledge that the limited availability of operational assets for acquisition continues to pose an enhanced challenge, a point we have consistently highlighted. At present, the pool of operational transmission assets available for monetization is limited. However, the National Electricity Plan for Transmission 2024 outlines an ambitious road map, with an estimated investment of over INR 9 lakh crores in the transmission sector. This underpins a robust future pipeline. Currently, 84 interstate transmission system, ISTS projects awarded through TBCB, tariff-based competitive bidding, these are under implementation, of which 39 are being developed by private players. As these projects are near completion and become revenue generating, they are expected to present a significant acquisition opportunity for infrastructure investment vehicle like PGInvIT. We continue to actively track the progress of these under construction projects to remain prepared for near-term opportunities. In parallel, we also recognize the potential of stable asset monetization. Should states choose to monetize their operational transmission assets to raise capital, it could unlock a new avenue of growth for PGInvIT. To support this, CEA, Central Electricity Authority in collaboration with PGInvIT conducted a dedicated workshop for the stated release on December 6, 2024, on monetization of state transmission assets. Additionally, CEA has been placing this topic as an agenda item in various RBC, Regional Power Committee meetings to assess and encourage the state utilities. While the process of state-level monetization may be gradual, sustained policy engagement is underway to facilitate progress in this area. With substantial debt headroom, a strong balance sheet and the confidence of the diverse investor base, both institutional and retail, PGInvIT is well positioned to capitalize on upcoming opportunity in this sector. It is important to emphasize that any potential acquisition will be subject to a rigorous due diligence process. Each opportunity will be evaluated for operational performance, regulatory compliance, alignment with InvIT norms, adherence to our corporate governance standards and consistency with unitholder interest to ensure it is a value accretive addition to the Trust portfolio. We would like to mention our distribution guidance of INR 12 permit for financial year '25/'26. I again, thank you. And now I would like to hand over this moderate -- to the moderator for the proceedings. Thank you.

[Operator Instructions] The first question is from the line of Mahesh Patil from ICICI Securities.

Sir, my first question is on the state level -- monetization of state transmission assets that you highlighted. Just wanted to understand if you can give some details, like are there some assets that have been identified? Or is this currently at policy level that is being discussed, if you can give some details?

Okay. So Mahesh, it is already in the circular that it was told that state -- intrastate are to be monetized. And at present, I cannot say anything is there. This we cannot disclose, but we are in the process of -- we're in the talks that whenever they are interested to demonetize, we are there to help them out.

Okay. But sir, is there any visibility like, let's say, in this fiscal is something likely to come up as per your maybe discussions with various stakeholders?

We cannot say any this one, but there is a -- Central Government is clearly continuously touching with them and they are talking to them. And there, we can see the visibility there. From there, the pressure come. There's always a -- at present, we cannot say anything.

Okay. Okay. Got it, sir. And sir, my second related question is, I think a couple of quarters back, you highlighted that there is some new policy from CEA, which allows you to go for -- as for other private players. So is there -- if you can give some details what is this policy? And are you looking at any assets from other players at this moment, transmission asset?

Can you repeat again?

You had mentioned a couple of quarters back that there is some new CEA policy which allows you to be open for assets from private players as well. So just wanted to understand what was it? And are you looking at any assets from other private place, transmission assets?

I don't feel anything like that.

Actually, there was nothing from CEA. And as a matter of fact, there is no bar on PGInvIT to acquiring private sector assets as well. CEA is into the picture for monetization of the state level assets, so they are into the dialogue with many states. And as Chairman have mentioned, that we have been partnering with CEA for many of the workshops and dialogues with many states. But unfortunately, yes, I mean, there is no concrete outcome as of now. But as far as the private sector goes, nothing bars us and CEA intervention is not at all required.

Okay. So sir, the next related question is, are you looking at any of the assets as such from other private players? And another related question is I'm not just talking about transmission assets, are you looking at any other related assets like renewables, et cetera? Or is that not on the horizon right now?

As far as that discussion with the state, we cannot disclose it right now. It's -- but yes, whenever we get like opportunity, we will surely come out with it. At present it is -- presently, we are concentrating on the transmission aspect.

Mahesh, just in the opening remarks, Chairman had mentioned that on the private side, there are not many opportunities available and there are around more -- around 30-plus projects are under construction by the private sector developers, which would be bidding in the next couple of years which may present. So this has already been highlighted in the opening remarks.

Sure, sir. But renewables you are not looking at, correct, as you just confirmed?

I mean, in the market, Mahesh, actually once, there is something, yes, we'll do, yes -- presently, nothing we can [indiscernible].

The next question is from the line of Ankit Minocha from Adezi Ventures Family Office.

On this distribution that you have mentioned for FY '26 of INR 5 per unit, I believe last year also it was INR 5 per unit, and we had to dip into some reserves, and it was above the stipulated cash flow guidelines that we had to give. So how are we kind of managing this INR 12 per unit distribution for the next year as well? Will you be planning to dip into reserves again? Or is there some sort of accretive earnings or cash flows that you're kind of seeing coming ahead?

So Ankit, I mean, as far as the additional incremental revenue growth, these are the fixed revenue assets with limited scope of earning through other means. I mean, there is no scope of organic growth in these assets per se. But having said that, you must have noticed in our results that our data days have reduced substantially during this fiscal '24/'25. And as a matter of fact, we started with a cash of INR 216-odd crores in May '21 when the InvIT was started, and we were roughly at INR 400-odd -- INR 398-odd crores as at March '25. So in fact, cash released, and the primary reason was reduction in the debtors or the debtor realization. So saying that we are dipping into those reserves in a big manner is a fallacy per se. And we believe that with this kind of debtor turnover, we will be able to deliver the guidance given by the Chairman, sir, of INR 12 for fiscal '25/'26 as well.

Okay. Fair enough. And secondly, just an extension to the previous participant's question on acquisition. I believe there were -- so I just want to be clear. In the current year, in the next 1 year, should we, as investors, be looking forward to PGInvIT doing some acquisition at all? Or do we think that there might not be any acquisition on the table?

That we cannot say no, but we are in a continuously this way. If we get a good chance, we'll surely come out of that.

And these private projects that you mentioned were on the verge of completion, when do they kind of start coming into your investment purview? And when do you think you can start visiting these discussions? Say when does the first project come online?

Maybe in 2 years' time, they will be in a commissioning stage and they will be requiring, then we'll surely -- I feel it will -- after 2 years' time, this will come out.

And at the end of the day, this would depend upon whether the asset owners want to monetize their assets or not. But at least, yes, there is a lot of pie that is coming up for monetization, will be for completion, not monetization.

And as the regulations mandates that we have to acquire -- InvIT can acquire only the assets which have the operating history of [indiscernible]. So say, if the asset matures or achieves the commercial operation 2 years down the line, we can start the process per se, but the acquisition can only be made after 1 year of the operations are established. So yes.

Okay. And is your existing sponsor looking to divest any further assets this year? Any view on the monetization from Powergrid?

From Powergrid side, it is not there at present.

We'll our next question from the line of Aniket Nikumb from ABN Capital.

Am I audible?

Yes.

My question is in relation to maybe some of the earlier questions. Sir, if you can talk a little bit about what the opportunity set could be for us maybe in the renewable side or in the battery and energy storage side, et cetera. Can you look at some of those opportunities, will you evaluate them? Our listed peer IndiGrid has sort of added some of those assets. So just wanted to have your perspective on this.

We are -- basically, I can tell you this, see, we are primarily on the transmission assets, we are on that. But I can say very well that if we get a good chance of -- we find that this thing, we may go into that. And at present, it is basically like BSS what you told about our renewable. Presently, we are more concentrating on the acquisition of the transmission assets.

So Aniket, kindly also appreciate the fact -- I mean, you must be a regular visitor to the market. So you must have seen the kind of valuation that a company like NTPC Green got for its green portfolio. So InvIT is not an instrument which can offer that kind of valuation to any -- for any renewable assets, it is out of question. But having said that, as Chairman pointed out, that if we get an opportunity wherein there is some value for our investors, we will be definitely having a look and then moving ahead. And for the -- the investors will be appraised or informed accordingly.

Sorry, to add into that is, basically, CEA as well as every -- they are continuously educating the states to monetize their intrastates. So we are seeing some of the growth in that, if you can -- and they have called us also to have a training sections. So we can see some growth in that area also. I have already told in my opening remarks that this much of works are coming up. So I can see a good outlook in transmission assets, which are coming, and they may go for their monetization.

No, sir, I appreciate that. So would it be fair if my understanding, I guess, from some of the comments is that there is a little bit of a valuation mismatch maybe that you're seeing in some renewable side and so on, which is why you are not doing, but otherwise there's nothing stopping you from doing it?

There's nothing stopping us, but we'll see that if we find a good opportunity, surely we'll come out of that.

Got it, sir. No, fair. The other -- maybe second question was, as the interest rates have now fallen, what do you think -- can our cost of funds go down too? And is there some uplift we can expect from them?

Definitely. I mean, definitely, the interest rates are on the downturn, thankfully. So my cost of loan has come down to maybe 7.33-odd percent presently, which was more than 8 at one point in time. So as far as the uptick in the returns is concerned, yes, that return will always be passed on to the investors. But as you will appreciate that my loan portfolio presently is quite limited only, INR 1,000-odd crores. So it is not so substantial as to make a meaningful difference in the DPU.

Got it. No, that's fair, sir. Again, I'm sure you can also appreciate, I think some of the questions here, and maybe I speak for a couple of other people here, is that -- look, we are trading a little bit -- our NAVs around 90%, 94%, right, as you reported just now. And we are trading on the market at almost like 10%, 12% discount to that. So I think all the investors maybe are looking for a little bit of guidance on that. But no, I appreciate the good work you are doing. All the best.

Thank you.

The next question is from the line of Dhiraj Dave from Samvad Financial Services.

Yes, can you hear me?

Yes, yes, we can hear you.

My first question is basically, when I look at the valuation report, broadly, while FY '26 and FY '27, we get approximately INR 1,260 crores, INR 1,250 crores kind of revenue. But in FY '18, particularly Parli, Warora and Jabalpur assets, we see almost kind of INR 290 crores decline in the revenue as per the valuation report, which is on 31st March 2025. So can you just give some perspective of why we see because mostly the projects are like a fixed revenue base as a bidding kind of it, so why these in 3 assets we see such drop?

So this is basically I can say only one word, it is in line with the TSA, I can say.

Okay. Now so if that is the kind of thing, that's perfectly fine. The second question is basically, like if I look at your guidance, so FY '26 is INR 12, FY '27, but if we don't do any addition and we do not see significant decline in interest rate, what should be a kind of -- like rather than just a yearly guidance, which is -- I understand we are in a very volatile world and difficult kind of it. But if somebody is looking at, say, 3 to 5 years holding period, should one be prepared based on this to see a decline and how much decline? Because even that would help market to assess our unit valuation properly.

If you ask this thing, normally we cannot give any future prediction in that area. I cannot say in that the future, what will be the after 3 years or something like that.

But Dhiraj, you are very right in pointing out that if acquisitions are not met, going forward, the expenses will keep on increasing. And with the declining revenues, 27%, 28% being the major the year in which there will be a sharp decline. So the NDCF are going to -- bound to go down and so will be the DPU, probably it will not be fair for us to answer that at this point in time.

Yes, yes. Appreciate it. Even direction is fine. But then what is the management going to do? Because basically, while we appreciate your efforts on getting these assets and running, which sells with accident-free all throughout FY '25, which is quite a commendable thing, and we appreciate management for that. But in fact, that's -- in fact, even previous investors expressed the concern about discount and I think market is discounting that factor. Because for last 3, 4 years, we have added like 24% or 26%, whatever minority stake of power grid remaining debt we acquired. But after that, we don't see -- and while it will be managed for 2 years, effectively, it started discounting it assuming after 2 years INR 12 distribution, only maybe INR 8, INR 9, I also don't know, but it would something like that. And that is why we see this big drop in discount between NAV and the current market share. So any thought of management, basically, you have put -- referred to -- say you're looking at, say, transmission line. But if there's anything else -- what can bridge the gap? In the sense that what can manage our distribution at INR 11, INR 12 in FY '28, because that is a major concern?

Dhiraj, see, since we have understood that the dip is going in happen because of the revenues going down, so the only way it can be corrected is by adding more assets so that the top lines can increase. So that's why we have been in touch with the states. We are trying to take full advantage of the government of India's policy and advisories to the states, educate them so that they have come up for monetization of their assets. So we'll keep looking at acquisition opportunities as and when they come up whether on the private side or on the state side. And that is the only way which can -- by which we can have our revenue streams higher so as to support a higher dividend payout post FY '28.

I appreciate. My just one suggestion and basically whenever you are looking at acquiring assets, please look at consolidated way to minimize the -- to ensure in a way that it becomes tax efficient. In fact, if we look at the current structure, we find significant dividend is getting into taxable rate. Well, that is not in your control because that asset kind of it. But any kind of NCLT structuring, restructuring, whatever way you can do, just a thought, you can explore and probably make this dividend as a tax friendly to the investor. So everybody gains in the process. Wish you all the best.

Thank you. Thank you.

[Operator Instructions] The next question is from the line of Sarvesh Gupta from Maximal Capital.

Am I audible?

Yes, you are audible.

Yes. Sir, just one question. Given that in this valuation report, we have declared an NAV of close to around INR 94, INR 95, and our weighted average cost of capital is around 8% for all the assets. So roughly, if we don't acquire, then from the current price the yield to maturity is around 9-odd percent. Is that the right understanding, sir?

No, no, no. That's not...

Sarvesh, we will refrain. I mean, you are free to do your own maths. So kindly -- I mean, it's our humble request that kindly do not seek that kind of valuation from the management team. You can do your math. But you know the numbers are in open. So yes, presently, the discount rate is it -- last year, it was 8.95% quarter -- September, it was 8.79. Last year, it was somewhere around 8.85, 8.95. So that will keep on fluctuating basis the movements in the interest rate market and the equity risk premium. And there is no guarantee that the interest rates will not be on the boil again or, for that matter, the equity premiums will not be on the rise again, which will affect my valuation and accordingly, the NAV. But this NAV is hardly to do -- has hardly to do anything with the kind of IRR that an invest can extract holding till maturity. I mean, so for that, probably you can have a look at the cash flows which are being presented in the valuation report and do your own maths. That will be more beneficial for the investors, I can only say.

Okay. And secondly, sir, if I look at your INR 46.5 that distribution that you have given, so roughly around 20-odd percent has come in a tax-free manner, mainly because of some of it is rooted in the form of capital repayment. So is that the same ratio which is going to be there in the coming years? Because -- or are you seeing some changes or are you sort of pushing for some changes to make it more tax efficient? Or how should we look for that?

There is no scope for further tax efficiency as of now. So going forward, probably, the repayment of SPV debt will be something which will start accruing more often and in a greater quantum. But as per the Companies Act, dividend can only be paid out of the retained earnings or for the profit of the current period. So retained earnings, we have already eaten to a very large extent, not much is left. So whatever the profits these companies are going to throw up, that will be upstreamed in the form of dividend. And you very well appreciate that the costs are bound to increase due to the inflation. So if the revenue is constant, costs are increasing, the PAT is bound to come down and so will be the dividends.

Yes. So our exempt form of dividend will also come down, is it? So what would be the rough guidance for, let's say, dividend exempt and return of capital that you are going to deliver?

Exempted.

Exempt dividend and capital repayment.

Flowing from the valuation report, actually.

You can see the valuation report. In that, we have already declared in that. I don't...

See, 76% 78% of our debt is to be paid after 10 years. So you have that particular information also available with you. And as my colleague, Amit, has told you that the valuation report provides all the numbers to do your own analysis of what kind of numbers would look like. We would not like to crystal gaze into the future and saying that this is how the percentage composition of various kind of upstreaming would look like.

But in general, I think what you said is that...

Sorry to interrupt you, but we request you to rejoin the queue for followup questions. We'll take our next question from the line of [indiscernible] from Motilal Oswal Financial Services.

Am I audible?

Yes.

Actually, I don't ask a question, it's more like the data that you have shared today and the stats, just wanted to -- can you share us the -- in writing, basically, or the slides?

It is there on the exchanges as well as on our website itself.

It's on the website. I mean -- okay, that's the slide that I'm supposed to refer to, right? Everything is there on it?

Yes. Yes, it's there.

We'll take our next question from the line of Nilesh Doshi from Prospero Tree Asset Management.

Am I audible?

Yes.

Sir, many, many investors have asked about the acquisition. But my question is, is the acquisition only route to add the new operating asset? Can't PGInvIT itself not able to develop any operating assets?

That is clear cut. It is not in the regulatory -- see, RTM projects which are coming to Parli, we are generating ourselves. So that is coming out, in RTM project it is coming out. And suppose we go for some -- other than acquisitions suppose we are, that question was asked earlier also, we are thinking an opportunity. If we get an opportunity, surely we'll go in that.

But you are saying that PGInvIT is not allowed to develop any asset, they have to acquire either from the private player or from the public sector unit?

No, no. Nilesh, kindly try to appreciate how the transmission sector works. I mean, I cannot build my line anyway I wish to. It is a license activity and it is a [indiscernible] activity. So the government of India, there are different committees and different forums where the transmission systems, depending upon the wherever the strengthening are required, or for that matter, where the generations are coming, the committee approves that these many transmission systems are required to be built upon and either it allows those transmission system on the nomination basis under the regulated tariff mechanism to the existing holders of the asset or bids it out under the TBCB mechanism. So unless and until -- as Chairman has pointed out, that we got two of the assets or two of the projects, one in [indiscernible] and one in Parli, through CTUL on the nomination basis. But as an infrastructure trust, we cannot go and quote under the TBCB mechanism because that is not allowed as per the government of India guidelines. So I cannot go and build the asset on my own. So that is the basic principle where upon the transmission sector is functioning in India.

We request you to rejoin the queue for follow-up questions. The next question is from the line of Gopal from BigTech.

And congratulations on delivering great numbers and projections. I would definitely like to congratulate the management of PGInvIT. My question around here is where I think -- when we have projected INR 12 as DPO for FY '26, definitely, I think you must have taken all the revenues that are coming in and the results, et cetera, into account when you're putting the numbers together. Is there any rough number that you have estimated that you will take the money out of the results that are there? And second one, a follow-on to this is, okay, when we have already -- I think I've been listening to your explanations about the dip that's going to happen in FY '28. What is in the kind of additional revenue that we need to bring in to make this INR 12 perpetual payment in the going -- coming years? I think these are the 2 questions, sir.

Thank you very much for appreciating our figures. The first question I just want to tell you, you see that this time we have taken 101% of that, means around -- maybe around 1%, 1.5% extra. That -- I feel out to be that will be continued in next year maybe. I cannot declare how much it has exactly come out, but since RTM projects are coming up, the revenue is -- we can think of that way. But that's why we have calculated it should be INR 12.

That's fair, sir. The second question, probably...

Can you repeat? What is the second question, can you repeat it?

I said, sir -- see, there's going to be a revenue decrease that's going to happen in FY '28 and going further. I think that's what I was looking at. So what is that delta that you need to add or the revenue to maintain INR 12 DPU perpetually being paid for maybe next 5 years, 10 years, whatever?

Of course, you know that we are keep on telling that we are in working of -- we have to come out with some assets to -- in our portfolio, we have to add the assets and we have to do in that. It will be continuously -- if it comes, then it will be surely build on...

How much is that gap which is going to arise...

See, Mr. Gopal, just now one of your fellow colleagues mentioned that dip that is going to happen from FY '26 -- '25 to FY '28. So now if you want to maintain the same thing, you need to take care of that kind of dip to bring it back INR 12.

Correct. The same thing I'm asking, sir. How much is the gap that you need to...

Gopal, I'm paying out INR 273 crores odd per quarter, all right? So INR 273 x 4 will be annual payout of INR 1,092 to maintain INR 12, right? If you go through my valuation report, during the year '27/'28, my top line will be roughly around INR 900-odd crores, right? Presently, my EBITDA margin is somewhere around 94-odd percent. Keep an inflation rate of, say, around 5% in that expense side. Those numbers are for yourself to work out, sir. What else can I say? Those are very much crystal clearly available in my valuation report.

We'll take our next question from the line of Bharat Gupta from Fair Value Capital.

Am I audible?

Yes, it's audible.

Just one quick question, sir. In your valuation report, you very clearly list out all of assumptions for revenue as well as expenses. So just looking at any of the assets, the O&M expense is the largest expense. First question is, is this contracted with Powergrid sort of over a longer term, like the TSA, so that the charges are fixed? And second is the value you have estimated assumed escalation of 3.5%. Do you think that is reasonable for your largest expense, given that you just now said its 5%?

See, the O&M contract it is continued and it is going to over by 2026, I think. And after that, it will be further -- it will see that how to go into that. It will be -- same, we'll see that it will be given to the Powergrid. Because Powergrid is sponsor to us, and we are seeing that there is a continuously -- we are getting a good O&M work and they are -- the person who has constructed it, who is operating it continuously and their manpower is also there, so it will be always beneficial to all of us to continue with them.

Yes. But the rate are being renegotiated, right?

As far as -- see, here, I want to say, it is basically what we are doing it. We are not -- basically our negotiation based on the CRC O&M charges what they are telling. If there is a change in that, there will always -- otherwise, I don't think there will not be any much difference will occur in that way if it is -- but because Powergrid is sponsor, so I feel out to be, there will not be much in that. They will not so -- because for them, it is not a very profit-making item to -- that they will come out of that. So it will be like almost same, I feel out to be.

So the 3.5% you have assumed...

No, that is okay. There may be -- we will negotiate, but I cannot predict it right now about Powergrid, it is for them to decide. But I can say why -- see, we will try our level best to put it in that area, but it is for them to decide. But I don't feel being Powergrid is a sponsor to this organization, they will do something extra in that.

Bharat, I think the assumption table in the valuation itself indicates that this is what we are presuming as of now. We'll revisit it as and when the situation comes.

How long are these contracts for with Powergrid?

See, as sir just mentioned, the recent -- the running contract is valid till March '26, and this will be renewed after that.

When did it start?

Maybe around the -- yes.

Maybe in the last quarter.

Okay. Okay. So what has the behavior been in the past?

No, this will be the second extension if at all it happens. Last time, it was on the very same terms and conditions. And so I think it has been nothing more than a speculation if we say anything. So we request you to be patient for some more time. Maybe 6 months down the line, we can talk again and appraise the investors regarding the development, yes, on this front.

We'll take our next question from the line of Nilesh Doshi from Prospero Tree AMC.

Sir, last year, we have acquired the balance 26% stake from the SPV. So how much it is distribution accretive? By acquiring these assets, how much distribution can be increased or what benefit we have acquired?

Sir, thank you for the question. I can say that after approval of unitholders, we have -- the test has completed this equation of 26% of all the 4 SPVs. The objective of acquiring these type of assets is to give some bump up to the returns -- to the unitholders or elongate the life of consistent return over some years. The baseline remains that it needs to result into some kind of value accretion to our unitholders. So obviously, it has been somehow -- and cost of debt, plus some risk. However, it will be very minimal. And you see that now this 26% dividend which was going to the Powergrid, now it is with InvIT now.

Okay. Okay. Sir, from 1 or 2 years, our revenue will come down. And as mentioned earlier that because of the inflation, cost will increase. So naturally, the distribution may come down after 1 or 2 years. So whether acquiring the asset, which are reducing the revenue possibility is the wise decision or acquiring the fresh asset is a more wise decision?

See, this 26% has been acquired, one for the 100% ownership as Chairman mentioned. The other thing is then there is the SPVs are also building some assets under the regulated tariff mechanism. So as we -- it have been told that one asset is being built in Parli and the other in Kala Amb. Now by acquisition, the 100% proceeds of these new assets also comes back to the InvIT only, which we -- otherwise which would have been distributed to the sponsor also to a 26% exchange. Then the dividend, whatever was going to the SPV, to the sponsor, is also coming back to the InvIT. Now for this, we have acquired -- this all acquisition has been done from some debt. So the income and the debt that we have to repay for this, which needs to be serviced, it leaves a very small positive margin for us which is not detrimental to us, but definitely, it's not significant enough to make any significant change in the kind of DPU that you are expecting.

So the acquisition was more from the controlling point of view rather than the distribution accretive? Is it so?

Yes. Yes.

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

I'm really thankful to all the -- thank you very much. Thank you very much, Nidhi, for -- and your team for -- and heartful thanks to all the participants who have joined us in this call. So I, on behalf of management, generally, where you are active involvement in PGInvIT earnings calls, and we eagerly anticipate continued interaction with our investors through these calls. At PGInvIT, we remain committed for providing consistent, stable and visible returns to our valued unitholders. From my whole team, I just, again, want to express my deep gratitude and anticipate your ongoing support and confidence in PGInvIT. Thank you. Thank you very much.

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