PTC India Limited (PTC) Earnings Call Transcript & Summary

Thank you very much. Good evening, ladies and gentlemen. On behalf of the management team of PTC, I welcome you all to the conference call for the quarter 4 of 2020 and also for the full financial year 2019/'20 results. I'm slight -- some nostalgia comes into my mind because it has been 15 years that every time after the annual result, this time, and earlier it used to be May. By May end, we have to declare the results, et cetera, and we used to be in Bombay and meeting you all on a physical basis. So this is new India, new norms to which we all have adapted very well. So this time, we are doing through virtual world. It has been a challenging period for this industry, for not only this industry but for the industry in general. We all know that the broad macro indicators continue to sit for the better -- best part of the year. And the revival of power demand in the fourth quarter led to a nominal growth of about 1.3% in power demand for the year. However, even the smart revival of Q4 '20 could not be fully sustained due to the fall -- sudden fall in demand, and the nationwide lockdown started at the end of third week of March. And post unlockdown 1.0 from 1st June onward, we have seen recovery happening in electricity demand, which has been driven by domestic, agriculture and industrial demand. Obviously, the heat in -- heat of summer in the north as well as south in some places and the paddy sowing season have been good news for the power sector people. It's an early trend, and it may be not fully matured, not that premature, but not fully matured to make a meaningful inference for the current full year. But at PTC, we are hopeful of better days ahead. Now coming to different steps taken by Government of India, including the draft electricity amendment act, which has been circulated and comments are being received, and the start of the real-time market are all small incremental steps towards making the sector sustainable in the long run. Overall, in this environment, PTC's operations have demonstrated sustained volume in the short term and more important is the resilience of the business model for the long run. We have been saying for quite some time that this is what we always wanted that more than 1-year contract should be 50% at least. And this is for the first time in the full year when we are seeing that it is more than 50%. Second thing is important, the liquidity package, which was announced by RBI also. And subsequently, the DISCOM-focused liquidity support by Government of India will take time to convert into revival of the MSME sector, auto and ancillary sector and the consequent demand coming from there. And power being an essential service for our way of living will continue to move up in terms of the base demand. But obviously, quantum just will start coming through revival of large and -- large-scale industry and the MSMEs. It has started happening in many parts of the country. And over a period of time, we believe that we should see the similar type of demand, which we have seen in pre-COVID times. Now all those things have led us, also in PTC, when suddenly the lockdown was announced, and we have to maintain a 24-hour control room, and -- which is round the year. Thanks to our IT team -- preparedness of IT team and our support system that we could keep prior for June also for those 30, 40 days, not -- more than 60 days, continuously, a set of people continued to stay there and ensured that April, May, all this time, the power flow continues. So I wanted to pay a special emphasis and thanks to the -- those people, the front warriors of PTC also. Now in spite of all these type of things we have seen, the company has registered a volume growth of 13% on Q-o-Q basis and 6% on year-on-year basis. And it could have been slightly higher if the lockdown could have come from 1st April. And I'll leave it to the question and answers and where Director of Marketing can answer any question, if it is there in this regard. Also, we have seen the operating margin has registered a growth of 11% Q-o-Q to about INR 118.79 crores and 9% year-on-year basis to INR 517.8 crores. We have been always talking about the consultancy income, which has further consolidated this year. And a total of -- and it has contribution certain percentage to the total operational income of the company, which was better than what we did in the last year. And overall, I mean, last year, there was a certainly -- if you've seen the full year, there were certain fluctuations which were on account of Bangladesh trading, which we are doing. But, however, if we take out -- knock off these fluctuations, which were onetime or for a limited time activity, our margin remains at a decent unit, and we believe that this is one thing which should be sustainable in the medium to long term. Also, I just wanted to point out 2, 3 events which took place. Complete operationalization of that Pilot 1 project, which was accepted as thermal power project of 1,900 megawatt fully operationalized. So in thermal, we have done our job. In hydro also, Mangdechhu is fully operationalized, and the results of that will kick in -- we will see the full benefits coming in this financial year '20/'21. Invariably, in renewable also, wind, about 1,000 megawatt whatever was there has been operationalized. And, of course, good news, which you all are aware, so I don't have to repeat that, that we have been also selected for the Pilot 2 scheme, the 2,500 megawatt of the Government of India scheme. And we had started going in a full circle. But suddenly, because of this lockdown and there's loss of almost more than 2 months, but I am sure the activity will pick up soon, and detailedly answer if anyone has any other query can be given by Director of Marketing, Dr. Mishra. So, I have today my full top management team supported by CFO, Mr. Pankaj Goel. Goel is making the financial presentation to you -- financial presentation. And then, we have Dr. Rajib Mishra, who is my Director of Marketing as well as Head of the Business Development; and Dr. Ajit Kumar, who is the Director of Commercial and Operations also, in-charge of Director Operations also; and Mr. Rajiv Malhotra, whom you all know he is the Executive Director and Chief Risk Officer and also the corporate communication in-charge; and last -- for the -- the last member is -- not the last but one mostly important person, who has continuous interface with you, Mr. Anand Kumar. So I handover the mic to Mr. Pankaj Goel for making his presentation. Thank you.

Thank you, sir. Good afternoon everybody. Now I will take you through the Q4 FY '20 results. The volume has increased by 13% to 12 billion units from 10 billion units. Total operational income has increased by 10% to INR 124 crores from INR 113 crores. Profit before tax has increased by 4% to INR 86 crores from INR 83 crores. Profit after tax has increased by 19% to INR 64 crores from INR 53 crores. Total comprehensive income has increased by 8% to INR 64 crores from INR 60 crores. And the earning per share stood at INR 2.17 in comparison to INR 1.82. For the year ended -- full year ended March '20, the volume has increased by 6% to 66 billion units from 62 billion units. Total operational income has increased by 10% to INR 542 crores from INR 491 crores. Profit before tax has increased by 6% to INR 422 crores from INR 397 crores. Profit after tax has increased by 22% to INR 320 crores from INR 262 crores. And the total comprehensive income has increased by 28% to INR 320 crores from INR 249 crores. Earnings per share stood at INR 10.81 in comparison to INR 8.86 in the last year. Thank you, sir.

Okay. So it was a short and comprehensive presentation. Had we been in Bombay, we could have run into longer this thing. But may I request Dr. Mishra -- Rajib Mishra, and then followed by Dr. Ajit Kumar to give their opening remarks. And then we can leave the floor open for question and answers. Dr. Rajib Mishra?

Good afternoon, everybody. Yes, good afternoon, everybody. As Chairman has just informed that this year in spite of difficult situation, as you all know, that the COVID started at the fag end of the quarter 4 and almost 11 days at the end of the year, the demand got subdued because of these lockdowns, which started from 20th onwards. So there was some subdued demand in the month of March. And after that, in the month of April, we could feel the brunt of this COVID-19 because the demand was subdued to the extent of 33% on one particular day, but it ranged from 18% to 33% fall. But of course, PTC could come out of it very soon. And in this quarter, in the month of June, we are almost back to normal and, on some of the days, we are doing better than what we did previous years. So we are back on track. So I am not talking about this quarter but previous year, as Chairman had just mentioned, we have operationalized all the 1,900 megawatt Pilot 1 projects, which was a task for different DISCOMs, and it is -- power flow started during the year. Mangdechhu 720 megawatt, we could commission. The 2,500 megawatt Pilot 2, we have started getting orders. And we will be informing you as and when the orders are complete, and we will sign the PPA and PSA with different DISCOMs. The most important thing which we could achieve last year, which I would like to mention for all the investor community, is that the long-term and medium-term volume, which was 56% for the entire year of the total volume, was one of the things which we desired for long. And we always wanted it that in our portfolio, we should have more than 50% of long term and medium term, which gives us a lot of certainty in offtake. So there was a 32% increase in the volume in this long term and medium term, and we could achieve 36.9 billion units out of 66 billion units from long term and medium term against 27.8 billion units, which we did in the previous year. As Chairman has just mentioned, in spite of so many hiccups and other things which happened, particularly the economic slowdown in third and fourth quarter in the country, the margin we could sustain at the same level, if we take out the Bangladesh fluctuations and -- against a margin of 4 point -- 3.7%, we could achieve 3.65% without the surcharge and rebate income. If we take surcharge and rebate income, per unit margin has gone up marginally in this financial year. So these are some of the things which we were trying and communicating to you people in the last so many years, and we could achieve this year. Particularly, one thing which I would like to share with you all is the threshold level of consultancy income. We have almost reached to a level of INR 25 crores of revenue from our consultancy income, and the consultancy areas also have increased. And we are now giving consultancy to many new areas, particularly one I would like to mention is the portfolio management of one particular state in eastern region, where we are managing the entire portfolio for them. And this is the first portfolio management, which we have undertaken this year. With RTM being introduced, we have -- we are expecting that there will be many more consultancy opportunities, which will come. And we will keep sharing these information with you as and when it comes to us. So with that, I would like to hand it over to Director Commercial and Operations, Dr. Ajit Kumar. He will be telling you the highlights during the year.

Thank you, Rajiv. Good evening, everyone. Most of the details have been given by our Chairman as well as CFO and Director of Marketing. I will just take you through numbers of commercial and operations. If you take our debtors and creditors outstanding, we have a net working capital deployment of INR 2,196 crores, which is around 9.3% of our total revenue as compared to 7.8%, which was deployed as compared to last year. As it has been told that the last 10 days of the March were under lockdown, so we could have -- we could not collect -- we could not receive money from these firms. Otherwise, this figure would have been similar to the last year in spite of increase in revenue. And the number of outstanding days as on today, considering the lockdown, is 35 days compared to 29 days of working capital outstandings. And if you see the collection, we are close to 85% to 90% collections we are able to do our billing amounts, which we have been billing this year. And as far as the operation part is concerned, we have dispatched this time 66.3 billion units as compared to 62.4 billion units last year. There was a marked reduction in demand in the last 10 days. Otherwise, this figure could have been greater than 1.8 billion to 2 billion units. I leave it to the Chairman for further instructions.

Thank you very much. I think results -- detailed results already published, and therefore, CFO has not taken it out on an oral basis because of teleconferencing, not on a screen. So now I leave the floor open for question and answer. Thank you very much.

[Operator Instructions] The first question is from the line of Mohit Kumar from IDFC Securities.

Congratulations on decent set of numbers. Sir, 3 questions. First is on the PTC Energy. Sir, what are the receivables situation right now? And how do we see in a situation, how do -- what is the progress with the APERC hearing? And when do you think this all -- these things to get resolved given the current information? And secondly, on this, we had one 300-megawatt, I think, or 250-odd megawatt long-term PPA with Meenakshi and Bangladesh. Is it not being scheduled right now? And how do you see it panning out? And thirdly, on the Bangladesh -- sorry, on the -- sir, on the RTM. How does RTM create an opportunity for us in the next 2 to 3 years apart from consultancy?

Okay. Thank you. Regarding PTC Energy Limited, I will request Ajit Kumar to explain the things. And regarding the Bangladesh and the RTM, I'll request Dr. Rajib Mishra to answer. Please go ahead, Ajit.

Thank you, sir. Regarding PTC Energy, we had a total billing of INR 310 crores this year, and we collected INR 267.45 crores. But we have a huge outstanding also of INR 219 crores. Whatever huge amount, INR 120 crores was collected from AP based on the AP High Court order, where they have paid at the rate of INR 2.43, the petition is being now heard in the division branch in the AP High Court because we have gone and petitioned against the single bench order of INR 2.43 because our petition request is to give us the full value rate as per the PPA. As far as the outstanding part is concerned, the Madhya Pradesh outstanding is of 3 months as on 31st March and Karnataka and AP is 6 months. But subsequent to that, Karnataka has paid some amount. But Andhra, yes, we are expecting that after this COVID package, which they are availing from PFC, all the states MP, Karnataka and AP will pay up their amount. I leave it to Dr. Mishra to answer other questions.

Mohit, regarding Bangladesh, we are supplying power continuously from the month of January for a long-term contract of 200 megawatts. Of course, there was some difficulty supplying it from Meenakshi. So we are supplying it through alternate source, but we are supplying continuously since the month of January. And we are honoring the PPA since the very inception. Regarding the second RTM part, you are very right that there will be many consultancy opportunities regarding the RTM, but other than the RTM -- the consultancy opportunity, the most important thing is RTM is nothing but a kind of a transaction on exchange. And as you may be aware, in the present context also, in the day-ahead market, PTC has a substantial share of around 40% of the traded volume, which is being contributed by PTC. So similarly, we are expecting, if not more, the similar kind of market share in the RTM also. Because the RTM is nothing but a shorter term, where the bidding is -- takes place just 60 minutes in advance compared to 24 days or 24 hours in the day-ahead market. So there are more nitty-gritties, complexities involved in the RTM, but it is a kind of a trade where PTC is contributing significantly in the current market -- RTM market since 1st of June when it was introduced in the exchange. I hope I clarified both the questions.

Yes. Yes. Sir, one more question, if I may squeeze in. Sir, is there -- sir, this 2,500 megawatt, what is the validity of the bids? And what kind of challenges you see in closing this particular bid. Given the COVID circumstances, the demand has fallen, and so the DISCOMs won't be willing to sign any new -- for any new PPA.

Great. The validity of the bid is there. And we are -- as Chairman has just mentioned that we got initial response very good in the month of February, ever since we got this. And we have contacted almost -- rather, we have touch based almost all the states where the response was, and we were getting a very good response in the month of February. But as you know, the demand fell, and there was no new demand. But after the unlock 1 (sic) [ unlockdown 1 ], we have started this process again, and we are getting very good response. So we expect that we will be closing all the 2,500 megawatt very soon. And the bids, which we have received, are all valid now.

The next question is from the line of Amitabh Sonthalia from SKS Capital.

Congratulations on a decent performance given the circumstances. I wanted to ask you about your dividend policy and how sustainable that is likely to be in the coming years?

You talked about which policy?

Dividend policy. You have declared a liberal dividend this year, which is...

I will say, we have declared as per the dividend policy. I'm not talking about liberal or not liberal because when we made a policy, we might have thought this had gone inside that. And we are as per the policy, and I believe that we should be sticking to our dividend policy in the future also. If the black swan event -- black swan, the whole idea has happened, like we had in 2007, the international crisis, but if the black swan event starts happening every month or 2 months, then, obviously, no one can make a prediction. But otherwise, as my Director Marketing has said that we are catching up -- India is -- also, electricity demand is catching up, and we believe that this 2,500 megawatts also, and as I said about Mangdechhu also, the benefits will come during this year. Benefits, partly it was there for last year, but being a hydro plant, the sustainability -- I mean the maximum output is just May to September. So all these factors should add in whatever our dividend policy is, whatever facts we gave, at least 50% will have to be really paying.

So that would be on the stand-alone basis, you think? Or will you also take into account consolidated...

No, we do it on a -- no, no. We do it on a stand-alone basis because consolidated is an accounting necessity. And obviously, the company LODR, et cetera, they talk about. So -- and PFS, as you have seen, last to last year, their dividend had fallen down. Last year, they gave a better dividend. Again, this time, the dividend has been slightly less. So such kind of fluctuations will keep happening. But on an -- I can talk about on a stand-alone basis.

And this year, you've also benefited from the dividend tax, right? So you've passed on that benefit to some extent to the shareholders?

I would not like to comment on these...

The government has eliminated the dividend tax, right, which you have to pay?

See, I believe that we have stuck to our dividend policy.

Okay. And how do you view -- you mentioned consolidation is an accounting issue. So how should -- would you like investors to view the company on a stand-alone basis? And your consolidated performance should ideally not be given too much importance because you're...

I'll tell you the reasons. Yes, I'll you the reasons. I mean, as you're rightly saying, 10 years back, it was different, but now we have moved into financial -- our financial investment, they have become. When they become financial investment, the management has been thinking that -- they have been not only thinking, they have been stating also very clearly, not on the analyst call but at the respective Board level also that PTC will not be putting up any further money into that. And these companies, they require like the way in PTC Financial Services, last year was very subdued because of the whole economic atmosphere when NBFCs starting from ILFS and DHFL and so many. I mean I don't have to go to that because I'm sure Dr. Pawan Singh, he himself is a listed company, and he must have answered all the analysts very well this time. So we believe that over a period of time, in the near term, we should be able to get more money into that ecosystem. And we are not going to put more money into this. So we -- even if we get diluted or totally divested, we have left all the options, and we are working on that. And therefore, you should be looking at more -- looking at much more on a stand-alone basis because trading is a business, which we created in this country, and we understand trading. That's our blood, basically.

And so -- and there are no cross-guarantees or any liabilities that you are -- you may have on account of any of your subsidiaries like PTC Financials or...

Other than being a promoter. So whatever comfort people can derive and that promoter, the brand name, et cetera, we are very conscious of that. So to that extent, and I'll expect -- I'll ask my CRO to answer this question. But however, I mean, all -- both these companies, India underwent the most turbulent time in last 1.5 years, starting with ILFS October '18, but they have been able to always serve their debts, et cetera, and we have not seen any pressure at the Board level when we are sitting in these companies. Rajiv Malhotra, can you further expedite -- sorry, further explain this question?

Yes. Thank you, sir. I'll just try to add from where the -- you have left for now. See, the question that you're asking is about any cross-fault or liabilities we have being the holding company. The answer is no. As Mr. Amitabh just explained to you that basically over a period, these have become pure financial investments, and that's the reason we are looking to divest. If one is saying apart from being in the position of the majority shareholder and promoter, there are no undertakings, liabilities of the nature which we'll all want us. Does that answer your question or do I need to elaborate?

Yes. No, more or less. My only -- I guess, where I was coming from is that can you in case PTC Financial or PTC Energy sees stress on their balance sheet, would they expect you to bail them out in the short term, put in capital to shore up their capital adequacy or to avoid -- help them avoid any liquidity constraints in the short run, if required? Would you be willing to provide them any loans or short-term financial assistance to -- if it's a survival issue for them?

See, it's a somewhat hypothetical question. First of all, as we're saying, and I'm repeating, there's no question of further equity investment in these companies. And if something catastrophic is awaiting, which we don't anticipate, we'll cross the bridge when they come to it.

Just to add to what Rajiv is saying, if you see the capital adequacy ratio of like PTC Financial Services, it stands, I don't know -- I don't remember, at 23% or so, 23% plus?

Yes. It's 23%, sir, 23%.

Yes. Okay. So you don't see -- at the moment, you don't see any reason why you should have to support any of these companies financially through equity or as a loan or a need for short term...

That's what Rajiv said. As on today, there is nothing, no signs which have come, but it's a hypothetical question. As the situation arises, that is the time because we don't believe in such type of situation coming. And that's what I said. That's when event happens once, maybe once in a decade or whatever it is, there, I hope, the event which has happened, the worse we have seen and worse is over and everyone is moving forward.

Right. And quickly, sir, last question. On your own receivables front, et cetera, is there any reason to feel as if that -- the cycle may get elongated? Or...

Ajit Kumar and Pankaj Goel, if anyone can answer this?

Sir, I will just say, as I have already told you that our FY '20 and FY '19 receivables have been at the same level. And now with this COVID package coming, where PFC, REC is arranging the INR 90,000 crores in 2 tranches and most of the states where we have outstanding are applying for this loan, we hope that this situation will ease out to a large extent, and the payment cycle will improve rather than getting deteriorated. Pankaj, if you want to add anything, you can add.

No, nothing.

[Operator Instructions] The next question is from the line of Aditya Mundra from Mytemple Capital.

Sir, the debtors has increased from -- in the stand-alone from INR 4,700 crores in March '19 to about INR 6,800 crores in March '20. So sir, out of this, how many debtors would be more than 6 months? And how many would be private sector? And how many would be public? And have you taken any security for the same? Are they secured in anyway? And sir, I have one more question. I can say that right now or maybe after this?

Pankaj Goel, you can answer this question?

Yes. As you are saying that our debtors have increased to INR 6,000-something crores, out of this -- because we always see our debtors and creditors together because when we have debtors, we have also not paid to the creditors. So if we net off the position, then naturally, we -- all our balance sheet takes some exposure that the money has not come from the states, and we have plan to be the generator. So in real terms, we only map that type of an open exposure. So if you see that our open exposure for more than 6 months is around INR 800 crores, and out of this INR 800 crores, actually, we have received -- out of this INR 800 crores, we've already received around INR 254 crores, including the bill discounting amount. So the position is not so alarming. And the major amount which is outstanding for more than 6 months is the amount due from J&K, around INR 300 crores. So because we are expecting the central government to give this INR 90,000 crores to them and will realize our money. Director Commercial, do you want to add anything into this, sir?

Yes, I think you are absolutely on the dot because we expect that this amount will be liquidated after the states avail the -- this COVID-19 package from PFCIs.

Sir, no private sector exposure in the -- more than 6 months?

[Foreign Language] is there a -- how much is the private sector debtor?

Sir, there is -- all debtors are public -- the state distribution companies only.

Okay. Thank you.

Okay. Okay. And sir, we don't -- we -- do we have any security -- are they secured in any which way? Or any guarantee...

Yes. No. No, recently, what we have done, that we have started the bill discounting process with them wherein they will -- we are drawing the hundi on them, and they are accepting our hundi, and we are discounting the bill. Let's say, we've drawn a hundi for 1 month from now on, so they will pay the interest upfront in that case, and they will make the payment after 1 month when we will -- when the payment is due. So we have just started.

Let me also explain this slightly. Pankaj, sorry to get into. See, obviously, there was -- in the June 2019, the Government of India Ministry of Power came out with a policy and then LCs, et cetera, which are supposed to be given by the distribution company. So it has been -- it was -- it started in August. And it was going on, obviously, in the beginning, they could give for only 7 days, 8 days, 10 days, et cetera. And things were improving, and then this COVID has suddenly come, which has put everything into challenge. But obviously, I really appreciate Government of India was very proactive on this thing. They could understand that it may lead to a liquidity crisis. So quickly, the Government of India worked out. RBI also worked out for something else. And they all got in touch with each other. And we are looking for this, whatever, INR 90,000 crores or INR 50,000 crores, INR 60,000 crores, whatever crores of package, that will ease out the pressure.

Okay. Sir, my second question is, sir, what is the status of the divestment that you are thinking in our subsidiaries, PTC Financials as well as PTC Energy? And how do we -- what is the status? And if at all, how do we plan to utilize the funds if it is in the near future?

See, for the status, I'll ask Rajiv Malhotra to answer the question first. And then I'll take in the second part of the thing.

Yes, sure. If you could repeat the question, please?

Sir, what is the status of the divestment of the subsidiary, PTC Financial as well as PTC Energy? And if it is in the near future, what is the plan to utilize the funds? And will it be a full divestment that you are thinking of? Or is it a part divestment, how is it?

Where is the thing coming from? Just let's step back and see. We said that these are investments, which transcended from being strategic investments to being purely financial, and therefore, knowing the cash hungry kind of nature of these businesses, we decided that PTC could not fund these indefinitely. And therefore, it was time to unlock that value. Now -- which means we are open to a complete divestment to a majority divestment as it turns out. That depends on the incoming investors preference, whether they want us to be in a minority position for a short while, do the -- some handholding go on. So it's a little ahead of that time. Obviously, complete divestment is our preference, but that -- it's always something which is going to pan out as far as the actual buyer-seller dynamics go. Second, what is the status? All I can say is that the processes are on. We did have an aborted process when it came to PEL, which was the divestment that we started earlier, but we revived it. And as we speak, it's only the action, which got suspended because of COVID-19-related situation. For instance, site visits, et cetera, by our prospective investors could not have been organized at this time. The process is very much on. That much we can tell you. And in the near term, if not in this calendar year, maybe the financial year, we should be able to come back to you with definite announcements in one or both. Same for PFS, I should elaborate a little more. Again, we have started the process some time around November, December last year, then again, between March and now, we have really concentrated on seeing how the action, which can be done off-site and in a lockdown kind of situation, that keeps on. What we would have liked to start in March, we are on the threshold of starting that now. That's where we -- I would like to leave it for now. What are we going to do with the money when we realize it? Sir, would you like to answer that?

See, one thing which we can -- we have been now doing our capital allocation very intelligently, which you are seeing and the impact of that on our operational income, on operational margin, you can see the impact there coming into. So it is too early to say what we are going to do. But as we have said, that we will be not putting money into heavy capital-intensive things. Capital will be used for maximizing our trading business. And without commenting, certain things which we have tried to do is also reflective of our concern of shareholder wealth. If my colleague wants to add anything, they can always do that.

The next question is from the line of Chenna Avinash from Spark Capital.

First one is on the market. So just trying to understand this bilateral volumes transacted between DISCOMs has increased substantially this year, whereas you will see the declines on the volumes through traders. So could you throw some light on what exactly is the trend that is -- as we go forward?

Dr. Mishra.

Yes. Apparently, I mean, if you ask me about the short-term bilateral volumes which is getting lower each year is because of the fact that now the prices in the exchanges are really low, particularly for the last 3 quarters, if you see, the prices are low and state DISCOMs are interested to get the benefit of the lower prices in the exchanges. So they are not going position -- they are not taking positions, which they used to take for 3 months, 6 months for a bilateral transaction. So that is one reason. The second is the volumes what we are seeing is basically the final surplus or the deficit which states are finding. So because of the low consumption in the third and fourth quarter, and particularly, during the COVID periods, the states are not having shortages. So they are not procuring on a short-term bilateral market. What you just mentioned is states are themselves doing it. Some of the states were doing it for long. And they are continued -- they have continued doing it in these quarters also. But on the face of it, if you ask, these are all dependent upon the kind of portfolio they are managing and where they get the maximum benefit out of it. So I can attribute the reasons on these grounds.

Sir, that explains the volume decline through traders, but what about increase between DISCOMs, direct transactions between DISCOMs, why there is a surge?

That's the reason why I said, I mean, some of these states, which were doing it for last so many years. It's not that this is the phenomenon, which has happened in the last financial year. Some of the states were doing the direct transaction of their own. Of course, they have -- it has its whole pros and cons. I'm not going into that area. But some of the states were doing it, and they have continued doing it last year also. But on the face of it, some of these states, which were generally the deficit were not deficit to the extent they required to go to the shorter term of the bilateral market. So there was a decline in the volume last year.

Understood. Sir, next one is on the status of this exchange license that we -- any update on that or any time line that you can?

Ajit Kumarji, you can answer this question.

Sir, our application is with CERC. And the observations and the comments have been received from IEX and PXIL. The hearing have been done on 11th of June. The filings by IEX and PXIL have also been completed. And we hope that the final hearing will be held in next couple of weeks. And we expect positive results thereafter.

Okay. So how much time -- even if the final hearing happens in a couple of weeks, what could be the time line that we can think of, like Q3?

After the CERC gives us the go-ahead signal, we are ready to start the operations, but then this has to be checked by the CERC and the POSOCO and NLDC, et cetera. Once they give the clearance, we will start. Otherwise, we are prepared to start, yes.

Understood. Sir, one last question. On this receivables, I understand -- one follow-up question. Can you give us the state-wise exposure outstanding as on March?

Yes, CFO?

Sir, I will give the -- a major breakup of the states, sir, for the open exposure. The open exposure for the whole this thing, as on date -- as on 31st March, around INR 2,451 crores. Out of this, the major outstandings is from UP of INR 600 crores; Rajasthan, INR 300 crores; J&K, around INR 370 crores; Telangana is around INR 270 crores; and then again, the Bihar is INR 478 crores; the Tamil Nadu is INR 146 crores; the Haryana is around INR 111 crores; and there are other small this thing add up to around INR 300 crores. So that is the major breakup of the -- but out of this -- I have already told that out of this INR 2,451 crores, till date, including the bill discounting, we have already received an amount of INR 1,100 crores out of this. That is the status, yes.

The next question is from the line of Krishna Kumar, who is an investor.

Thanks for holding the con call. This gives an opportunity for an investor, who is outside Mumbai, also to participate and ask questions. And it is also important, especially because your Investor Relations generally do not answer to all our queries. So my question was, firstly, and thank you for a very good dividend. This has been very -- it's been a big relief for retail investors like me. But when I see your cash flows, I get a bit worried. Because this is the third consecutive year, you're having negative operating cash flows. So does this mean that this dividend is going to come from additional borrowing? And what is going to be your limits on your borrowing? What is the cash flow management going to be going forward?

Okay. Dr. Pankaj Goel?

Yes. Sir, as regards to the negative cash flow from operations, I would just like to mention that cash flow from operation is reflective of basically 2, 3 things. One is the profit before tax, then we have to pay the tax also. And then, there is working capital adjustment, sir, and the collections thereof. So as far as we -- if we compare the last 2 years, so our cash outflow from operations were INR 481 crores in '18, '19 as against in the current year, it is only cash outflow of INR 235 crores. And if you see, sir, our balance sheet, that we have a positive profit before tax, but the negative cash flow from operations come from the working capital adjustment because, sir, our turnover is increasing. You know that we have to trade the electricity at INR 3.50 or INR 4. And then when the DISCOM is not paying, so all this debt, our debtors are accumulated on our balance sheet, then for a temporary mismatch, we have to borrow. If we -- if you see our borrowing, during the last 2 years, sir, it is ranging from, I will say, from INR 400 crores to only INR 700 crores or INR 800 crores on an average. So this is not so long borrowing. We have -- just on a temporary basis, we are doing it. And that is, I will say, as against for the cash flow, sir. And if the Director Commercial will want to add something on that, sir, regarding the working capital adjustment and collection, sir.

What CFO has told is absolutely correct, but we are also ensuring that whatever we bill, we collect that amount. And as I told you that we are able to collect 85% to 90% of our amount of every bill we do in a -- on a yearly basis. So we have absolutely no worry about the availability of cash and matching the debtors and creditors.

Okay. And one follow-up question on that. The reason I was asking is because now your rebates and surcharges have become the substantial portion of your profit. So if I look at your profit before tax, your rebates and surcharges forms around 65%, which used to be like less than 40% 2 years back. So your character is becoming more like a financing company rather than a trading company. Because even if I look at your margins, your margins are INR 0.03, but your rebates and surcharges forms around INR 0.06 per unit. So is there any substantial change in your characteristics of the company from a trading company to more of a financing company?

See, I appreciate your question. But what we are doing, as I said, we are now doing more efficient capital allocation, a. B, our thrust because everything comes -- because our trading, we are the #1 traders, and we have been continuously increasing our trading volumes year-on-year basis. So trading is going to be the core. And if you see any contract, off trading, I think, is done through a contract. So any contract contains both the trading margin, the rebates as well as if there is a delay in payment surcharges. So it's not that we are not doing trading and we are trying to do the financing. It's a part of the same contract, which is a trading contract. I hope that answers your question.

Okay. So my only query was it was increasing, the percentage was increasing. That's why -- I understood your answer. So I'll keep following. And one more request, in PTC Energy, you haven't given the breakup of the revenue and profits. So I would appreciate if you can give that also.

Okay. Okay. I think -- if it is readily available, CFO, please give it.

Yes, sir, revenue is INR 304 crores for PTC Energy for the whole year, and their profit before tax is INR 28 crores, and PAT is around INR 10 crores.

Okay. And going forward, I request, sir, your Investor Relations also to be a bit more prompt in answering.

That's what -- no, I was -- that's what I was slightly -- I mean, though it's an open meeting, which we are doing, but we believe that anyone reaches to us and anyone wants to meet me also or to meet this thing, Anand and Rajiv Malhotra, they are the first point of contact. And most of the queries, et cetera, they are able to answer. But if anyone wants to talk to me, most welcome. I mean last -- that's what I'm saying, 16 years, this is the 16th year now of my 16-plus years in PTC also and 16th year we are addressing the investors, we have never -- but if it is -- if some technical mistake or some communication mistake is there, I apologize on behalf of the management. And I will ensure you that I will -- whenever you want, we can have one-to-one online discussion also on a very fundamental questions to 2 questions which you have raised as an investor, most welcome, sir.

Okay. Sir, I have been the shareholder for the last 7 years.

No, no, I appreciate that. That's why I'm saying. I mean it would be our pleasure also, if there is a doubt.

The next question is from the line of Abhishek Puri from Axis Capital.

Congrats for good set of results. Sir, 2 things. First, just wanted to understand, as an observation, I think your long-term volumes -- PP volumes have frist time crossed the short term for the full year. How could we look at this trend going forward given this can make your volumes very sticky in a volatile environment because short-term market keeps going up and down with the demand the way it has moved over the last couple of months?

See, as we have always -- right from 2004, we have -- what you said, we have been always stating that, that do not look at quarter-to-quarter fluctuations even in volumes or margins, but we believe that we'll keep increasing the volumes also. And margin, obviously, because short term, we started in 2002 with 4% or 5% margin. And today, in the exchanges, we may have to charge -- on the sell-side, we may be charging INR 0.005 also, INR 0.01 also, INR 0.02 also. So the whole objective was to keep increasing the more than 1-year contract, basically, I'll say, which we got focused. And in 2012, '13 onwards, you started talking about a medium-term market. And earlier, it used to be just a Bangladesh transaction, which was started on a medium term, but now you see many other transactions, and this will keep increasing that. This will keep increasing the medium-term transaction, I mean, anything more than 1 year, where there is a more predictability, more sustainability and more profitability. So we are focused towards that in creating these new products. But simultaneously, the short-term, the real-time market, these are also there and ancillary, and maybe real-time market will kick off really from the next year, when they will be making the DSM more stronger or more stricter which will take some time. But once they do that, we are focused on RTM also. So our purpose was more than 50% should come from more than 1-year contract, and now, at least, we have been able to achieve. And we believe that the -- our marketing will continue doing job, so that this ratio is maintained at least. But Dr. Rajib Mishra, if you want to add anything to Abhishek's question, please go ahead.

No. Abhishek, I mean, I'll just reiterate what Chairman has mentioned. And as you know that we have another in the pipeline that is 2,500 megawatt Pilot 2. So certainly, we expect that whatever we had in our mind when we were targeting more than 50%. So this year, we have 56% from medium and long term. We would strive to have that kind of volume in the range of 50% to 60% coming from the medium term and long term. And with the current trend, we expect that this will continue for some time.

Okay, sir. Okay. Sir, my second question is on the long-duration contracts, which exchanges are talking about launching soon after the Supreme Court case is over. It may take 3 months, it may take 6 months, but would that be a direct competition to us in a way in terms of bilateral trades that we do? Or it will be complementary to our strengths, and we can also participate there?

Absolutely. You're right. We always believe there is competition because we were the first who created the exchange. And PTC, if you recollect in 2007, sitting with Jignesh Shahji and other people, we created the India Energy Exchange. So that time also, people have said that you are -- aren't you creating a competitor? We believe, no, there is a complementarity. If they have platform, platform requires market makers, whether it is a foreign exchange market or anything. We cannot take the SBI or this thing may not be required, all this or intermediaries, they are not really required. So they are complementary. And we always believe that more -- and the depth of the market if it goes -- keeps increasing whether through exchanges, bilateral or this deep platform, any such type of thing, being the largest trader, and we understand the market, the international market also and how we should be going 3, 4, 5 years down the line, so we are looking it as a complementarity. But Dr. Mishra, if you want to add anything, please do.

No, you're right in saying that, sir, the volumes, what we are expecting from the long-term bilateral contract is a contract, which is nonstandard and which can be customized to the requirement of the clients, buyers and sellers. Of course, the Pilot 1 and 2 scheme, it is more or less structured contracts. But in the exchange contracts, even if it comes on a long term, it has to be a totally structured contract where there's no flexibility, and the liquidity has to be upfront. So these are some of the things which we need to understand before we say that whether the volumes will migrate from this volume to that volume or from that volume to this volume. Of course, PTC on date has a 40% market in the shared markets in the -- on the exchanges. And that is kind of a market we are having 40-plus market share in otherwise also. So we always have a substantial volume in any kind of a product, even if it is traded in the exchange. So we always welcome new products to come either on exchange or otherwise. And we should get the maximum benefit out of it.

Just one more point on the exchange since you have filed the application, and it has been 5 or 6 months, in fact, last hearing has happened, and there are various contributions from other participants. So what are some of the key objections that is holding back our exchange platform to be launched. And I understand the last CERC order, they had asked for shareholding conditions to be met upfront. So has that been achieved? Or where are we on that? That will be my last question.

Ajitji and Rajiv Malhotra, I think, you can answer -- any one of you can answer this question.

I will answer. Maybe Rajiv you can add later on. The CERC has asked us to satisfy the requirement of the Regulation 2010, PMR 2010. See, once we have submitted the application, we are an applicant. We are not on exchange. Applicant requirement, we have satisfied that we should have a net worth of INR 25 crores. But we have gone a little beyond in our affidavit we have submitted that we will be meeting the requirement of 25% immediately on -- in principal grant of approval. We have given binding letters from the participants, who are ready to contribute equity into this exchange. Moment that in principle requirement is given, the other requirements of being a member or what will be the requirement of the shareholding pattern, that also will be satisfied. That submissions have been given to CERC. And whatever objections or the observations had to be given by other exchange, they have been submitted, the arguments have been done, maybe 1 or 2 more hearings, and we will be up and running. Rajiv, CRO, if you want to add anything?

Abhishek, I'll just add one aspect here. The way apart from the shareholding or the -- complying with the PMR, one of the issues that somebody has tried to insinuate, and I'm not saying there is substance in it, so -- but since you have asked, I think it's worth telling this on this call also. It's about the potential dominance of PTC in running that exchange platform. Now this is not a question that we are dealing with for the first time because being an early mover in the trading industry and having public sector majors from the power sector as part of our parentage, so it's possible to try and weave together something outside of this nature. Having said that, we'll say that we know that there's no substance in that particular said because what we are talking about is, in any case, a demutualized structure. In any case, we are talking about the member, and it's not the first time that an exchange with a trader member is being set up. The -- well, historically, how the other exchanges have operated and any dispensation specially given to them have been in the interest of market development. And that is what we are alluding to, that Section 66, which talks about market development, our actions, and indeed, our intent is really to develop the market. And that's where it will go. Another point there is that the regulatory approval process follows a 2 steps windows for objections. There is the first window, and then there is the final window. Clearly, the participants who are there have missed that opportunity as far as the first windows goes. So really speaking, they cannot be objecting at this point in time. But when it is a market development issue and the regulator chooses to hear them, I think it is in the interest of all the stakeholders. So that's the reason we are seeing an extended time line here. That's about all that I had to add, Abhishek. Anything that you want...

That makes sense. I was also hearing the same argument from both the exchanges earlier. So thanks for that clarification. I just wanted to -- as a final point, you will have to abide with 25% or 5% shareholding norm here?

5% because at the end of the day, we are a trader number.

So we have to go by PMR. See, let me indirectly answer his question, if -- we don't want to trade in that market. I'm just putting a hypothesis, see, because a lot of hypothesis is always, so we should think if we don't trade in that market, in that exchange, how much I can hold as per the PMR. And if I want to participate, how much I can hold. They are all given in PMR.

Right. So it will be 5% in that case.

That's something. Whatever PMR is there, we will abide. I mean these are the regulatory concepts. I mean we came before the regulators came, we came before the electricity act came in 2003. So we believe and we fully -- we'll fully do what we are supposed to be. There should not be any doubt about that.

I'm just surprised with the fact that PXIL has been given longer rope for this shareholder compliance, whereas you have to abide by any one.

[Foreign Language] We believe with the fairness of the system. We believe with the fairness. And as Rajiv said that sometimes, the journey can be longer, but it is not a surprise to us because right for the day 1 we were born, we have been facing these challenges, and we continue to -- we'll continue to face challenges, and we are ready for them.

The next question is from the line of Ashish Kacholia from Lucky Investment.

My question is basically, one is that it's very difficult to shift volumes from any exchange, which has been established. So what would be your business case for kind of taking volume share from the existing power exchange? That is my first question. My second question is, as PTC, and if we are allowed to hold only 5% in the new exchange, is it worth the effort and the time and the management bandwidth that we will have to kind of put into it to get this exchange up and successful?

Certainly, one thing, which is very clear, which we have made always a statement that we will -- PTC, as a trader, will always participate where I can see new products, new exchange and most efficient, we will be participating there. So whosoever is going to be the most efficient, the same thing we had heard at that point of time in 2006, '07 also when both these guys, I remember that MCX and NCDEX, and they are backed by their respective exchanges, et cetera, they've approached us. So we said, whosoever will get the license first, we'll participate there. So we believe that because behind us, there are hundreds and hundreds of customers whether they are industries, whether they are DISCOMs, whether they are generators, IPPs, and we have to ensure that they should -- their business, what is the best, which will happen to the -- as an intermediary, whether I'm an exchange, whether I'm a trader, we are all intermediary between a buyer and a seller. Someone is offering a platform, someone is offering, I mean, a license. I mean we have certain [indiscernible]. It is for the benefit of both the sides. So wherever we see that, we would like to participate there. I will not answer anything beyond that.

The next question is from the line of Dhruv Muchhal from HDFC Mutual Funds.

Sir, on the receivable discounting, who would bear the cost of this discounting? Is it on us or the DISCOM?

Yes. The DISCOM will pay it upfront.

DISCOM. Okay. So it is at no cost to us?

Yes, yes, absolutely.

And the -- if the DISCOM does not clear the bill in the duration period, and I mean, is it a recourse? It comes to -- back to us and the bankers will come to us and ask for us...

Yes. As per the RBI guidelines, currently, the bill discounting has to be with recourse only.

Okay. So the duration -- for that duration period, if the DISCOM does not pay, you will have to pay the interest also, but you can recover it from the DISCOM?

Yes. No, till date, I'll give you the -- because till March, we have discounted a bill of around INR 270 crores. Out of that, whatever is due in April and May, we've already received the payment on time. So till date, there is no default on the DISCOM side, yes.

Yes. But in a situation if the DISCOM does not pay the amount, we have seen that happen in some of the other cases, then the interest will be paid by you, but you can recover it from the DISCOM, right?

Yes, absolutely. Yes, then in that case, in that case, up to the period of bill discounting, they are paying the interest. If suppose on the due day, they will not pay the amount, then we will recover the surcharge from the starting date actually. You're getting my point? And we will recover the surcharge at the rate of 15% from them.

Got it. Sir, secondly, was -- on the balance sheet. Now we understand the situation of the DISCOMs. They are facing demand issues and connection issues. Now their outstandings will -- most probably will increase despite the PFC/REC scheme. Now 2 questions here. One is, how comfortable are we with -- by increasing our debt portion? I mean how -- what level of debt are we comfortable with? In a situation that the working capital increases, what is the level of comfort that we have in terms of debt?

Director Commercial, if you can answer this. The only thing is our volumes, et cetera, if they keep increasing, and as you said, as I've always said, 80%, 85%, we are getting on time. So the 10%, 15%, obviously, if the numbers keep, INR 20,000 crores becomes INR 30,000 crores, so say INR 2,000 crores will become INR 3,000 crores, I mean, to that extent. We believe that -- please ask the question.

So I was coming from the point that will we be focusing more on -- in such a situation, we'll be focusing more on using our equity as an investment to fund that trade receivables, the net-net position outstanding? Or we will be comfortable by raising -- to raise our debt?

Debt, so we are not long-term debt, so we are not raising the working capital. And working capital limit still -- the working capital limit, if the bankers are comfortable, which they have remained till now, we will able to -- we will be able to keep managing from working capital only.

Okay. So we can -- so currently, about -- our debt is about INR 800-odd crores. We will be okay to increase it further if a situation arises?

Yes, if the situation arises or if the volumes are arising is what we are saying. Today is INR 20,000 crores, it becomes INR 30,000 crores. So let's say, 50% or 40% increase in the revenue collections also, obviously, we'll have to -- we may have to increase that. I'm not saying we will -- may be DISCOMs, et cetera, over a period of time with the new amendment, et cetera, before the 1-year time will get pass-through, et cetera. Obviously, structural changes will happen there.

Sure. And sir, a connected question was now we have back-to-back arrangements with our generators and between the DISCOMs and the generators. Now we understand how SECI works is that if the DISCOM does not make the payment, you have -- the SECI has to make a payment -- has to make the payment to the generator. Is our situation a similar situation that even if the DISCOM does not pay, we have to make the payment to the generator? So for example, if a DISCOM delays it by 6 months, would the generator -- we will be forced to pay the generator within that due date period?

Director Commercial?

As per the present guidelines of Ministry of Power and CERC, there is a healthy mechanism, which is being enforced, payment mechanism. So we have got the LC from the states, and we have provided LC to the other suppliers also. So if we find any problem which is going to come that the outstandings will remain for a longer time. Whatever our CFO has told that outstanding for more than 6 months, it is beyond -- it is prior to August 2019 period, which is the J&K or with one or the other states. So subsequent to August, we are finding no problem. We are getting payment. In some cases, we are paying on advance, maybe that 10% to 15%, we are funding from our working capital requirement. The issue is not that difficult to manage as such. The states are paying after giving the LC.

I mean I'm just understanding a situation in the future if it arises, just to understand the mechanism, how it works. So would we be forced to pay the generator upfront? I mean upfront or on the due date versus the DISCOM can delay it for some time? Is that kind of the situation?

That is what we are doing. Our working capital requirement is only for that purpose, and our efficiency lies in paying through the vendors on time and collecting money also from the DISCOMs on time so that we are able to maintain our balance and the business runs on efficiently. That is what we are doing for the last couple of years. And we will keep on doing it more efficiently.

The next question is from the line of Mohit Kumar from IDFC Securities.

Sir, on the tariff policy, is there something in the making for the open access so the open access will become more and more attractive? Have you heard anything on that front?

Dr. Mishra?

Yes, sir, we would not like to mention anything which we have discussed or which we know for that reason because there are a lot of things before it comes as a tariff policy. So at this point of time, we would like to avoid maintaining anything which we know.

Okay. Okay. Okay. Sir, my second question, sir, given the fact that this COVID situation and the DISCOM situation will get only worse in the short term or, let's say, 3, 4, 5 months, and we had faced a huge situation in Tamil Nadu, if I remember correctly, in 2012. So what are we doing to make sure that we don't repeat that mistake? So that is my second question.

It's not a question of mistake or something. I think we -- after that, if you see our '14/'15 or '15/'16, the amount of surcharges that -- we were duly compensated for whatever delays were there. Now COVID is a situation, which has not happened to PTC. It has happened to the country as such. And you have seen RBI also coming out with these type of schemes and every 3 months or 3 months, et cetera. So it's not -- we cannot discuss something, which is beyond -- much more beyond any business house also. We are -- we believe, the package, it's not that -- it's not something which we are thinking of. We, obviously, were very active in the month of March when the COVID was announced. It was PTC team, and we got help from the -- some of the large developers, et cetera. We went to the Government of India. They also understood that seriousness of this thing. So it was not born out of suddenly. So a lot of background work, which we all have to do, and this is something which is real. So Government of India also understands or the RBI and everybody is understanding that this is going to be -- in the short term, if the business doesn't come back, let's say, let's say, another lockdown is again introduced for 3 months, whatever suffering will be common to everyone there. I really couldn't get your question.

No, no, no, sir. I was trying to ask the question from this point of view that what is risk management we are bringing to make sure that given the situation may deteriorate very, very drastically in these 2 or 3 months, I don't want us to suffer once again, that's it.

That is true, but we don't believe that such type of things are happening because, as we said, in the -- right in the very beginning that we are seeing that after the easing from 1st June, the things are really coming back, especially electricity. And you all see the demand, et cetera, Delhi crossed 6,000 megawatt a couple of days, 5,800, 6,000 also. States also, except where -- some of the places, which are badly hit, the industries have not yet picked up, but I'm sure [Foreign Language] sooner or later, they're also going to pick up.

Okay. And my last question, sir, are we from PTC Energy divestment or something, what is the kind of time line you can -- we can guide given the -- all the uncertainty?

I think Rajiv Malhotra gave his answer. But if you want Rajiv Malhotra to repeat this, can you repeat, Rajiv?

Mohit, in case we missed, I mean, I can chime here. But that doesn't matter. I'm happy to repeat it. As I said, the processes for both the divestments are on. And while -- there are stages in terms of reaching a definitive agreement and taking it through shareholder approval and so on. I would say that on one or both, you should certainly hear from us in this calendar year, slipping maybe to the financial year because there is uncertainties, which you can appreciate. And the activities that we had planned for the end of March, that's something that we're able to do now because, I mean, everybody in the investment ecosystem was withdrawing and like hedging a bit. So we see a sense of moving forward now at this point in time, plus there is free movement to do activities like site visits, et cetera. So it's on, and you should hear from us in the near future.

Sir, is it contingent on the resolution of the AP tariff or it can happen with all the tariff also with some conditionality attached in the agreement itself?

We're getting into very specific [indiscernible]. But it all depends upon what is -- that's what Rajiv has said. Ultimately, we have to clear those buyers. Whosoever is going to buy out, whether a majority, full, partly, we don't know. So only when the buyers generally come forward, then only terms and condition, et cetera, that will come at that point of time.

The next question is from the line of Keshav Garg from Counter Cyclical.

Sir, my question is very simple, sir, can you tell me that in your history, one investment that you have made, which has paid off? Sir, just one?

So what does it -- I mean I couldn't get your question.

Sir, let me explain. Sir, you have invested INR 754 crores in PTC India Financial, INR 654 crores in your wind power. Sir, together, it is INR 1,400 crores, which is more than your market capitalization. Sir, plus all the associates have been written off, INR 150 crores investment in Athena Energy written off. So I mean, sir, Teesta Urja. Sir, so I mean I can go on and on, sir, and -- yes, yes, please tell me, sir.

Yes. Because you have already mentioned all the investments which we have made by PTC, I'm talking about PTC balance sheet. So when these were made, they were not just blind financial investments. As Rajiv Malhotra had said, at that point of time, there was a strategy. If you -- because I have been a part since 2003, you won't believe when we went to market -- 2004, we had gone to the market; 2003, when we started the IPO, et cetera, process, no one knew what is power sector. The only listed company was Tata Power, and that was listed in 1980. This was a black box for the investors. The amount of effort we had to explain to India, especially to India. So internationally, they knew because they had -- in '90s, their trading had started, so they understood. So I'm talking about that point of time. So the investment we have made, which not only just for the sake of investment, the bankers at that point of time, they were new. They said that PTC, you understand the trading business because we -- in 2002, we started doing trading, and I'm talking about 2004, '05. They have said that if you also take a sweetener equity, then your skin is also on the game. Meaning thereby, we are taking preconstruction risk. You put some small money into the table. And then we will also know, okay, you are going to be a trader for 25 years. So when we put the money, other financiers were putting the money, we also were going to get the majority of the trading volumes as and when the financiers get commission. Now Teesta Urja, you have rightly pointed out, INR 200 crores which we have invested, we will see the benefit post PTC, and as you said, INR 1,400 crore in PFS and PEL, in Teesta Urja also, the monetization will take place, maybe after 1 year, maybe after 2 years. So there is a series of monetization, especially of these 3 companies. Yes, Athena Energy, which we had put money, we took -- we have taken the provision because it's not that they did not invest into the right thing. The Supreme Court in 2010, '11, when it comes and cancels the contract, which were entered for 10, 15 years, I'm not going to be a perjury or something, but I can't comment about that. But you all are financial investors, does it happen in any nation? So that was the starting of the problems of power sector. When our highest court, with all due respect, and I know I'm on record, but that created, anyone, we -- who had invested in 2006 or '07, and including the Blackstone, including the Goldman Sachs. So saying about PTC, when we had the benefit -- double benefit, not only financial but also the -- getting the volumes, et cetera, so that was there, and that's the reason Teesta Urja, when it has got commissioned now, we are able to sell on a long term also. We are able to -- whatever surplus power is there, we are able to sell in the short term, the exchanges also. So it has given multiple benefits. One case, yes, Athena Energy, as I said, because when the cancellation of the coal blocks takes, State Bank of India put 80%, 75% money, the debt also there. So you can't go to State of Bank of India, why did you put that money at that point of time, see, because -- I hope I have answered your question.

Sir, you have answered. And secondly, sir, I want to ask you, sir, I think the stand-alone entity, sir, you are in the -- you are an NBFC -- you are just financing the state electricity board. You have approximately $1 billion worth of receivables from state electricity boards which are basically bankrupt. And sir, last 3 years, you are INR 1,000 crores basically negative operating cash flow. And basically, you are taking debt and paying dividend. So sir, one fine year in future, there will be a huge write-down. All this receivable will get written off. And sir, that will be the end.

[Foreign Language] Could I comment, sir? I would like to. I'm Rajiv Malhotra speaking.

Yes, please tell me, sir.

See, if we are predicting a doomsday scenario for the sector as a whole, still, I can assure you, my friend, that we would survive. I guess I have a couple of points to kind of clarify to you. One, you started your question with talking about the investments vis-à-vis the market capitalization that we have today. I would urge you for the best of my understanding that let's not mix market capitalization with investments, which we've made and as part of our strategy. The power sector itself has gone through some waves of -- and changes, part of it elaborated to you. Now when we are talking about 2 subsidiaries, we believe we have valuable businesses running there. PTC Energy, we've built some very good plants, operating to very good operating parameters at this point in time. There are cash flow issues, but then we also believe that enough has been done at the macro level to sort out those cash flow issues, which we -- I mean we don't think distribution companies one and all of them to blow out one day in our space. But that's the scenario we seem to be getting from you. Second, again, let's talk of PTC Financial Services from a point where it had a concentration in thermal power-related exposures. It has moved to renewables and then to other infrastructure. There are in some cycles value hits. But then if you were to look back at our previous financials, you will also perhaps be able to appreciate the track record of financial returns that this particular investment has given us. Now at this point in time, if we are only talking about -- I think we are oversimplifying the business model, which is -- basically, the core of this is trading. And once we are doing electricity trades, you have to understand that there is a complete ecosystem. And fundamentally, no distribution company receivable, not even a rupee has ever been written off by PTC, and we don't expect to do that. So I guess that we need to understand this and understand the nuances of an ecosystem, which, yes, is cash constrained. I would be foolish to deny that. The receivables book will be a bit of a reflection in the short run on what's going on. But there is enough value, which is coming into our books to be able to return money to our shareholders. We don't need to borrow. So I just wanted to clarify these 3, 4 things which I heard you saying, my friend. Sir, please, if you want to take over from here?

Sir, so out of our total receivable, how much is more than 1-year due?

Yes, already CFO had given the figures of more than 6 months also. But if you want to repeat, you can...

No, sir, more than 1 year, I just want to know, more than 1 year?

Yes. More than 1 year is INR 393 crores. Out of this, the major amount of -- is outstanding from J&K only. That is around INR 300 crores.

And J&K -- let me just come in here. J&K, you all know what happened in J&K in October of 2019. And therefore, when the whole structure changes, then it takes some breathing time. But to say that J&K, which is a Union Territory, will not give us the money, I mean, I will not be able to accept it having been in the part of the trading business and in the sector for the last 16 years. So -- and to answer your question, the constitution of India, when it was written, let's -- I mean, it's a very good discussion you are doing. Constitution of India, when it was written, they have talked about certain emergencies. What you have seen is general emergencies in a couple of years in the -- once in 1970s is also at the All India level, and in states also, some emergencies are declared for some time when the governor takes over, and then that is the general administrative emergency. There is a clause of financial emergency also because to say that India itself will collapse in 1 year will not happen. This never happens till the time they become something, I mean, I don't know about that. I mean I can't say beyond that. So at that point of time, the -- in 1947, '48, people had visualized that in 200 years, for some time, one of the states may go really up, one may go. And therefore, there is a clause, especially in the Constitution of India, which talks about financial emergency. Means if something like that happens also and that there is an emergency -- the clear financial emergency, which has not been used for 25 years, I hope it is not used for next 100 years. But in case it happens, the central -- that state finances will merge with the central finances. So the problem of INR 800 crores or INR 300 crores, which may look very big; when INR 1,000 crore turnover, INR 500 crores looks very big. But when it is INR 10,000 crores or INR 1 lakh crore, that same INR 500 crores doesn't look very big. So if that happens, the central government finances gets merged. They will sort out the financial issues, et cetera. And then again, the elections, et cetera, gets take place. So we have been -- our constitution has visualized all these things, what you are talking about. But if you say that if all 28 states or 32 states, whatever states are there, all do go belly up one time, then we can't say -- I mean, I can't give any comment. Thank you.

Sir, the point is that, sir, if the money comes after 2 years, then basically the transaction goes into loss. Even if we get the money after 2 years, then, sir, what's the point of making a margin, I mean, sir, interest that we will end up paying will be more than the money...

Let me say this thing. I'll request you to get in touch, 16, 17, 18 years of our balance sheet. You please go through them, surcharges, et cetera, whatever we have got, please go through them. And then let's talk about the loss, et cetera. My CFO will open up. I mean he will have a one-to-one with you. You can see that this thing and live every transaction of 15, 16 years, and then -- they'll really guide us. I mean if you think that we have been making losses and borrowing money to pay dividend, then -- I mean I'd like you to have a solid discussion one-to-one with my CFO. And then we are there to really understand the problem if we have missed it. Thank you.

I would now like to hand the conference over to the management for closing comments.

Thank you very much because tomorrow I have my whole day Board meeting of PTC Financial Services also. In any case, before I said that, it is good that people have been -- and thank you very much, the questions were very open questions, and we really appreciate that. And we have tried to give as much honest answers as far as possible. But if anyone is not satisfied, please ensure -- the addresses are given. Anand Kumar, who's address is given in the presentation copy. Please send all your queries to them, and we will certainly answer. And if required, do it as a con call also. With that, thank you very much, and best wishes to you all, and be safe. Thank you.