PTC India Financial Services Limited (533344) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 FY '22 Earnings Conference Call of PTC India Financial Services Limited, hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Kunal Shah from ICICI Securities. Thank you, and over to you, sir.

Thank you, Malika, and good afternoon, everyone present on the call. Today, we have with us Dr. Pawan Singh, Managing Director and Chief Executive Officer; and the senior management team of PTC India Financial Services to discuss their Q2 and H1 FY '22 earnings. Over to you, sir.

Yes. Thank you, Kunal, for, as you did call it, giving us the opportunity to interact with our investors. And today, in my presentation, I have been -- I'm accompanied by Mr. Vijay Bisht, EVP, in-charge of monitoring and disbursement and resolution of projects; CFO, Mr. Sanjay Rustagi, who is well known to me and has been supporting me on our previous con calls; Mr. Abhinav Goyal, who is in-charge of the Investor Relations and who is the -- in spot of our Animesh Adhikari; and also, the Head of Business, Mr. Ankur Bansal; and Head of Credit, Mr. Sitesh Sinha. We have a full quorum today from our side. And we'll be happy to answer any of the queries which have come. So first of all, that's -- once again, I welcome you. And also, it looks like that the challenges which we faced, the COVID issues and all that, are largely behind us. And the economy is now looking quite buoyant and improved from what it was. You know for us, the -- for us, the shot in the arm is that we have just had COP26, seems to be over. And we -- it has been -- our stand on business has been largely vindicated by COP26. And India's commitment to net-zero for 2030 of its emissions target likely is laid down. And since our business model itself is on the basis of work the COP26 promises, basically towards sustainability and environment friendly. And as we have told you that much before we have already taken our mass movement in this direction and we are trying to become -- become quite a bit of -- we are not going to be net-zero company, but we are trying to be a green financing -- infrastructure finance company. And a couple of things before -- numbers will speak for themselves. But, directionally, let me give you some -- a little bit of backdrop and idea where are we moving, how we have moved directionally. So from our perspective, directionally couple of things. Number one, that we have decarbonized our balance sheet and moved to from thermal to green infrastructure financing. Renewable occupies close to 45% of our loan book. And then we agreed in the additionality in sustainability and e-mobility, on water sanitation, water distribution regarding the e-charging, manufacturing of solar panels, and now recently we're embarking also on the manufacturing of wind turbines. These are areas where we are -- have started to additionally fund. And we also, for the first time in last quarter, we did first airport financing in India, and that was the Goa Airport. And there, of course, we came as a last moment financer when all the risk of the project were over, and the project is of the national importance and to be commissioned by August next year. So business-wise, we are moving in a particular direction. And 2 -- from 2 sides we will be grossly benefited. One is that COP26 not only makes the Developed Countries Fund to the emerging economies like ours. But we hope to be one the instrumental institution to which funds will flow the -- development, which will happen in the green infrastructure. Second is from the business side, since there will be a flip to green infrastructure and it would give good business opportunity to us, and we are in that way very exactly very comfortably. That is all. Second thing is that, one of the things which have been haunting since our legacy assets and the outcome of legacy assets on our operational or financial performance over the years. So I'm happy to report that the provisioning challenge which we used to face in credit costs because, which used to be the heaviest burden on our financial performance is behind us. And we have, last quarter and this quarter also -- last quarter -- the quarter which went behind the present quarter, the provisioning numbers have really drastically reduced and likely to be consistent in this form going forward as we move forward, which is likely to be in the same direction. So the credit cost which used weigh down heavily on my profits, which used to weigh heavily on my return on net worth, which is to very heavily on my return on assets, that is going to be over and it's almost over now or going to be over -- it's almost over. And net NPA numbers have fallen down to as low as INR 281 crore. And as we will explain in detail, that probably this INR 281 crore is the last mile -- the last mile of the stress assets and recoveries are all on the angle. So -- and that is why you will also look at my coverage ratio has jumped up from Q2, 46% to 66% in the Q2 of '22. So this is second thing which I would like to tell. Third thing I would like to present before you is my -- which question normally comes is that whether PTC will divest or might not divest. So on that, there is fair amount of clarity that PTC for now is not coming out of us. And our capital adequacy is very good, 27%. And the thinking is that PTC would expect us to grow very fast, expand very fast and give them good returns on their investment, and which we have already started to do in this quarterly result, and betterment of that is expected in the future. Third thing -- the fourth thing, which I'd like to tell is that, the weight of liquidity challenge, the COVID-19 and all that, which also used to be a drag, which led to a very -- if you look at my half yearly sanction figure of the last year, it was only INR 350 crores, which has now gone up to over INR 2,000 crores in the current year -- not in the current year -- for about 6 months. So we are poised to now grow. Business is going to grow at a much faster rate than what we have perceived. It will not be, as we stated good rate of growth, but it will be definitely a very, very -- now India growth rate is, of course, the higher, so I can only say that we will have that kind of a much higher growth rate for our company in the coming years. And I've told the opportunities are going to unfold invariably. So this is what the story behind the -- all numbers and all that is there. Some quick, of course, CFO, Sanjay will take you through the detailed numbers. But one of 2 things I cannot hold myself, because having shown that kind of an increase, I'm tempted to share that with you upfront. And most importantly, by ROA jumping from 1.01% to 2.20%. And especially the reduction in the absolute numbers of NPA falling down from -- net NPA funding down from INR 500 crore to INR 280 crore. And my return on network now coming very close to the double digit number and significant improvement in the NIM and spreads. And as I've said, that we are highly -- we have started focusing on this much earlier. Business growth, of course, I'm talking now, and that we have been able to maintain and we'll be able to sustain it. So with that backdrop, I request Sanjay to take you through the details of numbers. And we will be happy to take questions. Me and my team will be happy to take any questions. Thank you. Sanjay.

Yes, good afternoon, everyone. I'm just giving the financial highlights for the PTC India Financial Services Limited for Q2. So first I'm giving the comparison between Q2 '22 versus correspondingly last year quarter. The profit before tax and the profit after tax for the Q2 '22 stood at INR 69.96 crore and INR 52.47 crores, as compared to INR 48.46 crores and INR 31.85 crores in Q2 of the previous financial year. The yield of the earning portfolio stood at 10.57% in Q2. The debt equity ratio has improved to 3.21x in Q2 as compared to 4.30x in the second quarter of the previous financial year. The net interest margin, earning portfolio is improved by 4.14% as compared to 3.70%. And the spread on Q2 number is 2.99% as of in Q2 2.82%. Cost of the borrowed fund has reduced drastically to 7.58% as compared to 8.53%. And if we talk about the comparison with the previous quarter of the same financial year, the profit before tax improve again to INR 69.96 crores to INR 60.93 crores. Profit after tax has increased to INR 52 crores from INR 45.60 crores and the net interest income has improved to INR 89.60 crores as compared to INR 79.60 crores. And for the first financial year, if we club together the Q1, Q2 of this financial year versus the Q1, Q2 of the previous financial year. In profit before tax has improved to INR 130.89 crores as compared to INR 91 crores, and profit after tax has improved to INR 98.07 crores against INR 58.42 crores. The yield on the earning portfolio stood at the 10.76%. As on -- and the net interest margin on the earning portfolio stood at the 3.98% as compared to 3.52%. And the business disbursement within the first half is INR 1,687 crores during the first half year. The capital adequacy ratio as on 30th September is at a very comfortable level of 26.06% against the regulatory requirement of 15%. The return on the network for the quarter ended September '21, is 9.52%. So these were about the financial number. And anyone has any question can ask now.

Yes. Thank you, Sanjay, sir. We'll be able to take questions and also give clarification and explanation as we go forward.

[Operator Instructions] We have the first question from the line of Aditya Mundra from MyTemple Capital Advisors.

Sir, what will be your Stage 2 assets, sir.

Stage 2 assets.

Just 1 minute.

You want the number or you want --?

The amount, sir.

INR 558 crores.

And sir, this would be basically in which industry, which sector, if I may?

It is a solar and the hydro project is there.

Yes. Let me explain this. See, I'll give you a breakup of this, because numbers reveal very little then -- and they conceal quite a bit. So let me go through this. So out of this INR 558 crores, the 3 large chunks, which constitutes almost -- almost INR 500 crores, you can say -- a little less than INR 500 crores. So Madhya Bharat is INR 160 crores and Kundli-Manesar, the road project, it's monetized, it's a hand project and Vento Power in the solar project, INR 143 crore. Now let me give you this snapshot of where it is and then what is happening. In Madhya Bharat, it was a hydro project. So the project is now complete in June. The COD has been completed, and the power flow also has started. And, hopefully, this quarter, this will come out of the Stage 2. And then this Kundli- Manesar, the project -- it's a very important project, which connects Delhi -- it's a kind of ring road outside Delhi. It's a bypass around Delhi and which is a very popular road, which connects Western India with the Northern India. And there is a heavy traffic on it. So here also because the project was a little bit delayed, the PCO -- pre-COD has not happened because some -- which again inaugurated by current prime minister few months back. And this was INR 189 crores. And now the Haryana government, the secretary level committee and chief engineer level committee have cleared it and very soon, the cabinet will meet and give the exact COD date. So this will also come out of Stage 2. And third is your Vento Power Infra Private Limited, which is INR 143 crore. So here, it was -- basically, it belonged to the Essel Group and because Essel Group was not able to increase equity, but tariff on this project is very good, and the PPA is bit tricky. And we are trying to find a change of promoter, which should happen in 2 to 3 months' time, not more than that. And then the project, we have taken PPA, it's a solar project. So this will also move out of. So there are no areas of concern as far as Stage 2 is concerned. All of them will move out. And of course, others are some small while INR 2 crores, INR 3 corers here and there.

Sir, over and above, are there any restructured books?

Restructure? No, there are no restructuring.

And sir, in this quarter, what would be the -- if you could give a breakup of the sanction for this quarter -- for September quarter --

Sanction for this quarter. So see, sanction for this quarter was -- actually INR 541 crores was a sanction. INR 433 crores is disbursement. But after that, we have done another INR 1,800 crores of sanction.

Yes, yes. That you have mentioned. But sir, this INR 541 crore, what would be the breakup of -- like which sector would it be major.

So Sitesh will give you the breakup.

Yes. Out of INR 541 crores, we have sanctioned to a couple of renewable energy projects for renew and the Hero Group. That was majorly INR 541 crores and one going to discount. But in Q2, Q3, we have substantially sanction, as Dr. Pawan Singh has said, INR 1,800 crores. So that includes new sector we have portrayed, that is the airport which we have sanctioned Goa Airport. Other than those -- other than remaining sanctions are related to the again wind and solar portfolio. And another loan, we have sanctioned INR 274 crores to the electric mobility, which is pan-India -- the company is deploying this -- mostly southern part of India, so that will become operational by next June 2022. So that we have sanctioned INR 275 crores. All this together makes close to INR 1,800 crores in this Q3.

Sir, the major part is Goa Airport – Goa e-mobility and there was one more which I missed.

Renewable energy portfolio, Goa and one is e-mobility sector.

And this quarter -- that is September quarter.

Goa -- airport is only INR 170 crores.

And this quarter that is September quarter, it is majorly renewable energy out of the INR 541 crores.

Yes, yes, all power and renewable energy.

We have the next question from the line of [ Saumil Mehta ] from [ Mehta Advisors. ] [ Mr. Mehta, ] we are unable to hear you.

Hi, am I audible now?

Yes, sir.

Firstly, sir, congratulations for the impressive set of numbers with the reducing NPAs and the high disbursement figures. I just wanted to understand what sort of guidance can you provide for the disbursements at the end of this current fiscal year. Also apart from that, there is continuous improvement in the borrowing cost of the company, especially since the last few quarters, is there a further scope for reduction in borrowing costs in the near term?

Yes. So we have -- the current year we -- we have some budget figure. Sanjay, what is the budget figures for the current year?

INR 5,000 crore.

INR 5,000 crores disbursement figure we are hopeful of doing it. We'll do that. Not only hopeful, we'll do that.

We have already achieved about 50%.

We have already achieved 50%, and normally, the third quarter and fourth quarter is -- traction in the maximum, so we will do it. And do it -- probably try to do it more. Regards the cost of borrowing. So that is a constant endeavor because -- and one thing is very clear. See when my financial results improve, we have also to get a lower cost of volume. So I always say I teach finance also, that's my hobby. So I always say that a good balance sheet leads to a good balance sheet. The results which we gave the clearance of stress assets should help us to bring down the cost of volume. Third, which I want to very clearly point out is that I was -- before you was talking to you -- a team of India, U.S. business housing was here, and I was talking to them. And now after COP26, the developed countries are going to commit huge funds for India. And we can be a very strong intermediary as we are poised very well because we have the flexibility of private sector, and we are also seen as something which the government supports. So we can be a very powerful intermediary we are quite hopeful of tapping very cheap international finance in the next few months as they go by. And, of course, domestic cost of borrowing also we have reviewed and we hope to get some reduction in this quarter as well.

[Operator Instructions] The next question is from the line of [ Srimal ] from -- who is an individual investor. There seems to be no response. We move to the next question from the line of [ Vivek Singh ], who's an individual investor.

I have 2 questions. Just wanted to know that is there any challenges on liquidity front? How much further credit line the company is expecting in the near future? And another one is, is there any progress for resolution of fresh loan accounts like INSS. ILFS, and NSL? When it will get resolved, can you throw some light on it, sir?

So for the first, I’ll ask Abhinav to give the details of the drawdown leverage, which we have. And second part of -- Mr. Bisht will give you more [indiscernible] he will give you the details…

Very good afternoon. Regarding the first part, we are not facing any liquidity challenge. In fact, we are facing enough sense of liquidity in our company. So we've utilized the situation earlier that when the COVID significantly started [indiscernible]. And with our great efforts and continuous follow-up we've been extending the relationships. We have been able to not only reduce our [indiscernible] credit line from bank. So if we talk about for last quarter, we got INR 1,000 crore addition from Bank of Baroda, INR 500 crores from New Bank of India, and another INR 500 crores at a very competitive rate. And now probably SBI has also sanctioned about -- to get a confirmation from their side. And Canara Bank is also working for another INR 1,000 crores, Jammu and Kashmir Bank for another INR 500 crores. And the Bank of Baroda for another INR 500 cores. So combined credit line will be INR 2,500 crores, and that would be a long-term line. So if you look at our -- this long term to short term utilization, so that is also very fantastically. And as of now, we are having FD of around INR 300 crores in form of [indiscernible]. Now second part would be addressed by our Administrative Vice President, Mr. Vijay Bisht, continue.

Regarding this current asset -- as we have told in the last investor call that we are at the final stage of -- there is around 2 stages. And Board has cleared one of them and it is sort of about this analysis and -- We are -- if we are the stage of contingent settlement and then we will file in the CRP because it is a -- this analysis is a transition scheme and it has to be approved by CRP, that we're changing the management, changing the payment [ percent ]. So we are going ahead with this. And hopefully, once CRP approves it, it will take -- the normal time it takes getting approval from CRP and then we would enter into the entire document. So we are hopeful that during this financial year, we will be able to clear it. So [ PFS ] Board has already cleared it. So these are the nitty gritty of documentation is there. And about the second -- about the INSS, the -- it is in the NCLT, as you are aware. And the next date of hearing is around December 8. And there is a good amount of money in the TRA, which is around INR 1,800 crores lying there. And the consortium looking to get a favorable judgment from NCLT. And once we -- once the NCLT gives decision, then we will be able to get around a 10% of our loans there itself and there in a one chunk. And we are hopeful of getting a favorable decision there. And I think the third one was about NSL. Well, NSL, though our Board has taken a view, but we are awaiting some -- because it has been referred to [ RBL ] for some issues -- we are just awaiting that. And in case if you don't get any decision from [ RBL ], then again, we will go to the Board. And we have got a good one time settlement, and we are just in the -- the total amount is around INR 125 crores against which we have already got a OTF offer from the promoter of around INR 90 crores. So it is a good recovery. And we have already gone to the Board twice and I think once clarity emerges, well, then most probably in the next month, we'll go to the Board and maybe the Board gives approval, I think that will all be taken care. So INR 206 crores, INR 125 crores, it takes care of around INR 330 crores of our stressed assets.

Just add to what Mr. Bisht said. So to understand we have said we have created the position. So already we have a INR 90 crore offer, INR 125 crores of the loan amount, which we have already provided. So this is the INR 90 crores, which should come back to -- straight way to my bottom line. And second, he talked about INSS, so INSS, the resolution plan is all approved by them. And now we had to get it stamp out from NCLT and I think in the first week of December, it is meeting -- December 8, and we'll get the stamp and then the cash flow will start. So Mr. Bisht, talked about the that, that will be upfront payment. But the loan amount written and we'll continue to get our regular payments on it. And this plant is operating at a PLF of -- nowadays about 70%, 75%, so good cash flow -- at INR 1,500 crores is lying in the INSS. So once the stamp is up there, then we [indiscernible]. We are on the – you can say that we have to rank in terms of -- they are almost there. All 3 are almost -- maybe few days here and there, but they are almost the fag end of the resolution. This question of base maybe -- maximum a month or 2, and we should be able to clear it's -- a large portion, which is INFS, which is INR 164 crore, and NSL, I would say INR 90 crores, because that -- that is -- which are going direct. And NRSS we will get -- we have already got the offer of INR 134.5 crores. So that makes it INR 224 crores plus INR 160 crores. So it makes -- clearly close to INR 400 crores from the [indiscernible] and that will take care of my bulk of stress assets.

[Operator Instructions] The next question is from the line of [ Manoj Pandey ], who is an Individual Investor.

Sir, my question is about the business source --

Sorry, Mr. Pandey, may I request you to speak a little louder. Because the volume is soft.

What do you think about the business growth of the company? It's not happening every year. Between '15-'16 financial year when your loan book was INR 14,400 crores, and now after 5 years, your loan book is only INR 9,200 crores. So if we take on leverage basis, your business growth has declined every year by INR 1,000 crore. Now in this environment and the government and all government is being in passive on infrastructure pipeline and -- but the company is not able to grow its business. So how do you foresee -- how this could be reversed?

Yes. Mr. Pandey, I'm so happy that you raised this question, and I really wanted to address this. I was waiting to address this point. And, in fact, your point is very valid that there has been some degrowth. But let me also tell you a substantial portion of this degrowth in the resolution of stressed assets, which we took out of our balance sheet. So that has been one of the reasons for degrowth, which -- we were carrying assets which are not giving us any return. So that, of course, is positive thing which has happened. Second thing, which I wanted to point out is that, last year, we did only total sanction for the first 6 months was only INR 350 crores, that was because of the corona issue. And because of that, we were not able to meet any growth target. And prior to that we in -- industry was facing huge liquidity challenge and it was capital conservation for -- many of our peer group has gone. It has disappeared from the market. Your ILFS has disappeared, [indiscernible] recently disappeared, [ Dewan ] Housing disappeared, Altico disappeared. Piramal has moved away, [indiscernible] Capital has moved away, Edelweiss is gone. So perhaps the only private sector, NBFC Infrastructure Finance Company, which is holding its flag high. And I do agree with you that on the growth point, it didn't happen. But we were also focusing on capital conservation and improvement of the operational parameters. Now having achieved that capital conservation, having improved on all operational parameters and having focused on profitability, more than the growth, especially in the time when there is a liquidity crisis, there is a COVID crisis, and of course, resolution of stress asset. It was the wise thing to do, I think, in hindsight. I think we have been very, very -- and today that we have these numbers before us -- the kind of numbers which we are going to sustain. The provision coverage ratio which we have been, credit cost, which we have been able to reduce because of the resolution of stress assets. And I said this year against last year, half year, which we did INR 350 crore sanction. Already, we have done INR 2,300 crores sanction and further, this quarter, we have done --

Close to INR 750 crores -- sanction INR 1,800 crores.

Already INR 4,000 crores -- INR 4,900 crores sanction we have done, which is -- last year's entire thing was how much --

INR 4,200 corers.

INR 4,200 corers entire year.

Entire year.

So entire year INR 4,200 crores. In the half year itself, we have done -- but you do take one month more, we have done INR 4,100 crores. So we are going to far exceed. So now we are on the growth path. So you can catch us when we come to you after the final results. I would expect you to be there, and I will wait for you. And perhaps I'll show you a substantial growth in that number.

As investor we would like to see that at least loan book growth at 15% per annum. That is not happening, but when the input which you have given, should we expect that the 15% loan book will grow probably --

Yes. Sure. You will find -- as I said, we already have done a sanction of INR 4,000 crores -- over INR 4,000 crores, which we did for the entire year. As I said again that the third and fourth quarters where we push more sanctions compared to first 2 quarters. So you can expect a very substantial increase in my sanction number and disbursement number. So you can expect a good kind of a growth and that our capital adequacy is -- and of course, I asked my unit head to give you a pipeline position as to what is the pipeline position. Mr. Ankur is here. Mr. Ankur will give you what is the kind of pipeline which we have for growth.

Thank you sir. So, we have -- we have around INR 3,500 crores plus pipeline as on did, which is also getting built up over the time. And out of this INR 3,500 crores is really diversified into renewable energy, into manufacturing of coral glass, into EV sector, into waste management, into water desalination, sewer treatment plants. So we have a fairly good pipeline and that to in diversified sectors. Apart from that -- apart in the pipeline, we are also focusing on the ROIs and the yields of the loans also. So we are fairly -- in a really good view, which is also setting in our net margin of round 4%, which has been said by our CFO, shortly.

Thank you.

One last question. Sir, you people are managing the affairs very well and the company has come out from challenging level. The another thing which I find is that, the company has very less visibility in the financial sector. And you only one head offices are from Delhi. Do you have any geographical expansion plans so that your pan-India business adjust.

See, our business is all over India. It's not linked to -- none of our borrowers are from Delhi -- 0. Most of our borrowers are from either Western India or from Central India, or Southern India. So we have very little borrowers from Northern India, and we have no borrower from Delhi. So we have a geographical -- I think, we are infrastructure finance company, it has to be -- and it's a chunky loan. So it's not retail loan, but we have offices everywhere to do collection. We are highly digitalized and highly automated all our collection systems, payment system is latest and up to the mark. I think it's all of the best NBFC practices. So -- but we do agree with you, but we have to also -- so we have extended arm. We have one office combined with PTC at Hyderabad, which is manned by a very senior person ex-NTPC Executive Director. And we also have an arm somebody representing us in Mumbai. So we can give the contract details of that also. But as you rightly said, that we'll expand. And Mr. Pandey, rest assured, the way we are not trying to grow, you will not only find us in India, maybe we'll find us across the border also.

[Operator Instructions] We have the next question from the line of [ Srimal ] who is an individual investor. There seems to be no response. We move to the next question from the line of [ Darshil Mehta ] from DAM Investments.

Sir, I do have one question. Can you share the status of renewable infrastructure debt fund management, which was mentioned in last investor call.

Yes. So on that, you see Global Green Growth Institute Korea, so they are giving us technical assistance. They are helping us to set up this fund and incurring all -- giving us all technical advice as well as also incurring all the expense on behalf of us. So as a part of developmental activity or process. So now see, our mode in principle has given us green signal. And Green Growth Institute has already appointed KPMG as their consultant to raise equity. And KPMG is very actively looking for us counting for equity partners in this regard. And they are in touch with many multilateral modules. So we are progressing quite well. And this has -- again coming back to -- at the cost of repetition, with COP26, I think the kind of support should come to RIDF, where it should be very, very promising. So we are in the right direction and things look quite optimistic.

The next question is from the line of [ Veeral Shah ], who is an individual investor.

I just read in your PPT that you have provided financial assistance to Sunshine sectors. So just wanted to know your vision and like what's your plan to diversify more into the sector? And how do you see this sector more profitable or just a vision on this sector.

Yes. So Sitesh will throw light on this.

So if I understood it is a sustainable intrafinancing sector. This is related to the water, what we understood -- we are diversifying -- water sewage treatment, waste management, e-mobility. Those 3 areas we have picked up because of the counterparty comfort with all 3 other program and promoted like NMCG. In water sewage treatment it is from NMCG. If I recall e-mobility it is from BSA subsidy. So based on that amenity based model, we have picked up these 3 diversified areas and in the last one or 2 years. And we have also planned to grow in the same sector, much more sanctions in the investment sector another couple of years. And we are proud to say we are one of the early mover advantage in water treatment as a long term loan product. Similarly for e-mobility sector, we were the first lender to be able to disburse in the e-mobility sector as a long term financing arrangement. So keeping with that the waste handling management is also we have analyzed and sanctioned one of the proposal. And so another, like say another like Ankur Bansal there is another some -- one or 2 proposals as in pipeline. So hopefully, we will be able to do the some outstanding on those risk management system. And we are picking up the -- in the waste manage we are picking up the municipal corporation or state local bodies, which is a financial healthy. They have the healthy position of the finance. So based on that, we are doing the business. And apart from that, of course, the promoter who are doing this all this investment in this sector, we are also analyzing their balance sheet, their past track record, their strategic tie-up with technology partner or the financial investor. Based on that, we are taking all call or credit call on the sanction of the sectors. And moving ahead, we will also be interested to see similar kind of business model appearing in this another sustainable area. We are hoping that next is the hydrogen generation. So that will take time -- another quarter time or 6 months time to pick up the real business proposal. But we are interested and here we are analyzing such sector movement for those new upcoming sustainable area developments.

And just to add like with PM vision of like promoting domestic manufacturing of solar modules. So we are also analyzing a proposal into solar glass manufacturing, which is coming in a very renowned residential area in India. So that is also adding to our sustainability credentials that we are also supporting manufacturing of local [ debentures ] and the solar module manufacturing. That is also an area we're looking at right now.

[Operator Instructions] Next question is from the line of [ Srinath ] who is an individual investor. [Operator Instructions]

Sir, previously, you mentioned about the [ Dhanu ] wind one of these 3 accounts. So what happened about that?

Bisht sir would like to say something on that.

Actually, [ Dhanu ] wind is -- and you are aware that there is some issue of the state DISCOM, which is pending in the high court, right? And we are just awaiting the decision. And once the decision is given, we are very hopeful. Otherwise, the plant is already operational, and there's no issue at all and that. The only issue is we regarding the DISCOM, not pay obligation to the DISCOM -- the power ability. And we are hopeful of taking a favorable decision shortly.

In fact, what has happened is that the high court last November when the last hearing was recently held in that, they have said that they have to immediately clear dues up to INR 2.40 that they have to clear up to November -- latest they have to clear. So that is 2 areas. One is the delay in payment and second is the tariff. So they are paying a INR 2.40 and original PPA is at INR 4, and they are not paying that also. So although PPA is about INR 4, but they are paying at INR 2.40. So INR 2.40, they have paid up to January. January payment has happened, which is not worse than we adjusted. Only thing there for differential tariffs they have gone to High Court. So at -- even INR 2.40, if the payment is in time, this account will be regular. But here, there are 2 issues. One is that payment here also -- that INR 2.40 has to come in time, number one. Number 2, [indiscernible] states, but then the differential tariff, the High Court is a seized out the matter and the government also of India has seized off the matter, and they are likely to do next hearing in this month only or early December. And we are hopeful. On the back end, we have got an offer also from [ BRC ], which is closer to the loan value. But we are contemplating if the order comes in the favor, then we will not go ahead with the [ BRC ] proposal, but we will continue with the account. And otherwise, as Mr. Bisht mentioned, there's a power flow happening. There is no problem in -- it's a completed project and power flow if happening.

So in what time line, sir, you will resolve all the remaining stress assets piece. Because that disinvestment process is delaying, I think, only because of this no clear balance sheet.

No, no, delay was nothing to do with disinvestment. Disinvestment is not happening, I made it very clear at the beginning. Now PFC PTC is not disinvesting, and that is another reason why we are going to grow faster because of the disinvestment and uncertainty, we had also the growth -- one of the reasons apart from liquidity, COVID-19 challenge was that PTC's disinvestment also was weighing on the minds of the Board here and there. And that was also one of the reasons why our -- and that is why you will find that suddenly once this position has been taken, there is a huge jump in our sanction and disbursement number. And you will find that this whole company has been reengineered from the angle of sanction and disbursement. Unprecedented growth we'll be able to have as once this overhang or shadow of disinvestment process is behind us. And I'm categorially saying that now, the time PTC has very clearly said that they are not going to disinvest. They are going to support us, and they are going to see that we grow. And so that they also get good financial returns, good returns from whatever investments they have made in PFS. So we are looking forward to that. As far as resolution goes, clearly, I did clarified you on the status of [ Dhanu ]. Other assets, which I said my NPA -- net NPA at the beginning only I said, has been brought down to a number of -- from last year from INR 510 crores to INR 281 crores. And this INR 281 crores, again, I'm telling you the final stage of resolution. And if I add to the NSM recovery, which will happen, so our recoveries will be higher than the amount of INR 281 crores. So if you -- and including NRSS, NSL -- so if I take all that, the recovery will be higher than the INR 281 crores net NPA number. So we are net-net -- there's no net-net it is going to be a gain for us. So on the stress asset, we have done remarkably well. There are certain things which are at the fag end of the resolution. As Mr. Bisht very clearly mentioned that next maybe one month or 2. There are -- 3 big assets are almost at the last stage of resolution. We'll find that resolution. So stress asset, we have handled fairly well quite well. We have brought it down substantially. It used to be close to INR 1,800 crores. From that, we have brought it down to a net NPA of INR 281 crores. So -- and that also I said that it is towards. I don't think that is a cause of worry from any account. And if it is to be seen, it is to be seen as a positive thing and not as a matter of concern. And it's cleaned up. And one of the reasons why PTC is also very happy with us that having cleaned up the balance sheet. They are looking forward for good return, and that is why there could be some [ growth coming by. ]

So in your opinion, sir, PTC India is going to cancel the disinvestment process for now?

I said that at least for the time being they are not looking at it and they are looking to support us so that we grow and give them good returns.

The next question is from the line of [ Ashwini Bhatt ] who is an individual investor.

So my question is, if there is any update on the dividend proposal from the management side. And I also had one more question. So I remember company was planning to have total equity of about INR 500 crores, so have any discussion materialized on the same yet?

Yes. So on the dividend front, we have been maintaining -- of course, last year because of this MSL provisioning, we were not able to declare dividend, but we have been declaring dividend. And of course, it will be premature for me to now say what dividend we'll pay, but you can look out at the kind of dividend payout ratio, which we have been maintaining. And what I'm showing you is now the profitability in the -- we have already touched close to INR 100 crores and 2 quarters should be better than the previous 2 quarters. So I think you can look at our payout ratios, and you can satisfy yourself. Regarding second question, your INR 500 crores, we have -- we have a very decent debt equity ratio. We have a capital adequacy of 26%. We were always waiting for things to improve so that we can enter and raise capital. Meanwhile, what we are doing parallelly is that we are expanding our book. We have ample room for expansion with the current debt equity ratio and current capital adequacy ratio. But as we expand, because I said that the kind of what was [ bringing ] our growth was the liquidity, COVID-19, and the certainty of PTC disinvestment. And all 3 are behind us. So we have shown in the first 2 quarters, what we have done. The next 2 quarters will be a higher number that I can promise you, at least with certainty and confidence. And in the -- so as we grow, the numbers improve, the valuations improved and parallelly, we would continue to now engage in the greater -- because now we travel and all have also started to begin. So we were engaging ourselves in a greater intensity to raise capital. But our capital would be not only just raising money, but we want to bring value on the table. So whosoever I bring should be a strategic partner, who should add some value, and who should be able to help management to take this company to the --

Ladies and gentlemen, due to the time constraint, that was the last question. I would now like to hand the conference over to Mr. Kunal Shah for his closing comments.

Yes. Thank you, Dr. Singh the entire senior management team of PTC India Financial Services for answering all the questions patiently and giving all the clarifications. Thanks, and all the best for the future quarters. Thank you.

Thank you very much, members of the management. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.