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Edited Transcript of ADAI.NS earnings conference call or presentation 7-Nov-19 10:30am GMT

Q2 2020 Adani Transmission Ltd Earnings Call

AHMEDABAD Nov 19, 2019 (Thomson StreetEvents) -- Edited Transcript of Adani Transmission Ltd earnings conference call or presentation Thursday, November 7, 2019 at 10:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Anil Kumar Sardana

Adani Transmissions Limited - MD, CEO & Executive Director

* Kaushal G. Shah

Adani Transmissions Limited - CFO

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Conference Call Participants

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* Chirag Mandawewala;Pioneer Investcorp;Analyst

* Harsh Agarwal

Deutsche Bank AG, Research Division - Head of Asia Credit Research

* Love Sharma;Lombard Odier Group;Senior Credit Analyst

* Mohit Kumar

IDFC Securities Limited, Research Division - Analyst

* Prapti Gupta;BlackRock;Associate

* Rahul Modi

ICICI Securities Limited, Research Division - Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, good day and welcome to the Q2 and H1 FY 2020 results conference call of Adani Transmission Limited. We have with us today from the management, Mr. Anil Sardana, MD and CEO of Adani Transmission Limited; Mr. Kaushal Shah, CFO of ATL; Mr. Ashwin Bajaj, IR head; and [Mr. Jay Ambani], Analyst, ATL. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Anil Sardana. Thank you, and over to you, sir.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [2]

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Thank you, and good afternoon. Welcome to the conference call on Q2 FY '20 results. As you would have all seen the results and observed that the company continues to perform well on all fronts. The transmission business registered very robust availability by virtue of which it earned the qualified incentive and performed very well on all fiscal and physical parameters.

Similarly on the distribution side, the company achieved its targets. With regard to AT&C loss, rather bettered that, has also achieved very good fiscal results. So on the consolidated basis, the transmission group registered 63% spurt in EBITDA. It crossed for the quarter the INR 1,000 crores mark, being INR 1,082 crores. The PAT number grew by about 82%, and registered INR 230 crores for the quarter.

In terms of individual business, the transmission business registered EBITDA of INR 623 crores, which was higher by 23% for the EBITDA margin of the previous year's quarter. A more important part is we continued to register 92% EBITDA number, which by far is the best in the industry by close to about 200 basis points.

Similarly PAT grew by 37% at the transmission business to INR 158 crores from the previous quarter number of INR 115 crores. The distribution business registered an EBITDA of INR 459 crores, which was up by about 24%. And as I've mentioned, the AT&C loss was slightly better compared to the rolling target for the previous year, and registered 7.97%, which is one of the lowest that Mumbai has seen.

On all other fronts, whether it's the operational aspects, whether it is the ESG aspects, whether it is related to growth, the company continued to perform very well. We sit on a very healthy pipeline of about INR 8,000 plus crore of CapEx orders in hand. That does not include the distribution business where the pipeline is showing up to be even stronger. So therefore, the company not only did exceedingly well during the current quarter, and in H1, if I may say, but has an outlook, which is continue to be promising for the future quarters too.

I would stop here and then look forward to your questions and use your questions to communicate if there was anything else that I would want to add to that I stated. So most welcome, and look forward to your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from the line of Mohit Kumar from IDFC Securities.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [2]

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Congratulations on a good set of numbers.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [3]

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Thank you.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [4]

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Sir, I have 2 questions. The first is that, can you please confirm how much -- YTD how many projects you have won in the -- under the tariff-based competitive bids? And what is the cost of the projects? And what is the levelized tariff combined put together?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [5]

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Mohit, the entire INR 8,000 crores that I mentioned as the pipeline has been won through tariff-based competitive bid projects and not a single project is now through the regulatory mechanism.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [6]

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No, no. Sir, I'm asking for the YTD, I think, I believe that you have won 4 projects, right, this particular fiscal year?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [7]

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YTD details we will subsequently send you in terms of the 4 projects that we have won recently. And you also tell you the, along with that -- one second, one second, I have it now. So during the current year, he wants to know?

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Kaushal G. Shah, Adani Transmissions Limited - CFO [8]

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INR 159 crores.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [9]

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1, 2 -- no, no, that was in the quarter. 1, 2, 3, 4, 5. We have 5 projects that we have won during the YTD, during the current year, okay? And the -- you wanted to know now the amount, that amount is not indicated here in the table. We can tell you that separately.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [10]

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Sure, sir. No issue. And sir, how do you see the rest of the fiscal year in terms of the opportunity? And is there something which has come off a -- some kind of, let's say, possibility of the worth of transmission bid project which can be bid out in FY '20 and FY '22, do we have any sense of those numbers for the industry?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [11]

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In fact, for our industry, if I -- if they actually start putting the lines for execution, it will be impossible for any player to do the survey and execute that. My sense is that you will have another INR 20,000 crore worth of projects in next 6 months.

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Operator [12]

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(Operator Instructions) The next question is from the line of Harsh Agarwal from Deutsche Bank.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [13]

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I just have a very basic question. On a quarter-on-quarter basis, your revenues and EBITDA are down a little bit. Can you just walk us through what's the reason for that? Is it seasonal? Or what growth...

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [14]

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Harsh, you are reading quarter 1 to quarter 2?

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [15]

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Correct.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [16]

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So that will be seasonal on account of the AEML because AEML, the number of bids that gets converted are different, yes. In Q1, the loss will be very heavy in terms of summer months.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [17]

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Okay. Okay. Understand. And then even on Slide 8, for example, where you talk about operational assets availability, there is this minimum -- there is a chart that shows the maximum, minimum and average. Even there, the minimum one, the lowest bar I see for this quarter is 93.64%.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [18]

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Correct.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [19]

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What is driving that? This is all transmission, I'm assuming.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [20]

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Yes, yes, yes. This is completely transmission. Harsh, that's related to one of the lines that we had bought from KEC, if you recall. And in that effect, one of the tower had to be replaced by KEC at their cost, and they wanted time for it, and we agreed to the time when the seasonal demand is less. So therefore, it is this availability is what because of that tower replacement work which was done this time, but we'll make up for this in the subsequent quarters.

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Kaushal G. Shah, Adani Transmissions Limited - CFO [21]

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And the cost is also been borne by KEC.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [22]

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So they have to do that, yes.

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Operator [23]

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(Operator Instructions) The next question is from the line of Chirag Mandawewala from Pioneer Investcorp.

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Chirag Mandawewala;Pioneer Investcorp;Analyst, [24]

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I just wanted to know if after the tax announcements done in September, have we availed the lower tax rate? And what have been the implication of the tax change on our financials?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [25]

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I'm so happy that you asked this question because I forgot to mention that even after tax announcements, right now, we have taken the conservative numbers. We haven't deducted yet the lower tax regime because we want to be completely sure, so we're consulting experts. And once we take a final view on that, that's when we will try and bring the tax angle. But I'm so happy you asked this question. Thank you so much.

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Operator [26]

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(Operator Instructions) The next question is from the line of Love Sharma from Lombard Odier.

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Love Sharma;Lombard Odier Group;Senior Credit Analyst, [27]

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I noticed that you have announced some buyback of the onshore debt and also the Masala Bonds. So if you can share what is the thought process around these? And how the capital structure is going to look like going forward?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [28]

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So Love, what we have announced right now is that we will replace our Masala Bond and some of the offshore STBs that we already had, including some of the other sundry short-term debt that we had, and we want to replace it with long-tenure debt, which is going to be CD, all hedged, of course. And that's what we will pursue in the coming weeks. They are formally -- of course, the letter has gone to the stock exchange after the Board approval. We are formally be announcing that tomorrow. So the idea is to replace -- yes, sorry, go ahead.

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Love Sharma;Lombard Odier Group;Senior Credit Analyst, [29]

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Okay. So would you have a sense of how the maturity profile would be looking like going forward of your debt?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [30]

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So this -- round about $500 million which will replace some of the existing instruments which were due in the next year or 2, will be replaced by a 20-year long tenure debt, that's our expectation. Keeping in mind, our license period -- remaining license period and making sure that depending on how we control the assessed license period, and feel comfortable to get extended, accordingly, we will work on that further.

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Love Sharma;Lombard Odier Group;Senior Credit Analyst, [31]

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Okay. So basically, going forward, if I can understand, the shortest term debt which you'll have on the balance sheet will be the dollar bonds, the exiting dollar bonds?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [32]

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No. There will be no short-term debt, which short term...

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Love Sharma;Lombard Odier Group;Senior Credit Analyst, [33]

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Sir, not short term, what I mean is the shortest tenure would be the existing 2020 period, sorry.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [34]

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Right. The idea is -- exactly. The idea is to now -- since this is very steady now, the idea is to have a long-term debt, which is predictable, though, of course, amortizing type, and we will have these using the foreign currency dollar bonds. That's true.

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Love Sharma;Lombard Odier Group;Senior Credit Analyst, [35]

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Got it, sir. And any thoughts on -- if you are looking to replace the 2026 bonds as well? Is there any plan or any thoughts on that?

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Kaushal G. Shah, Adani Transmissions Limited - CFO [36]

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So we have a one bond -- so let me just explain that. So current date profile of an Obligor Group has one 10-year dollar bond, which is maturing in 2026 with 10-year bullet, and the remaining is rupee loans in the form of MCDs and the CP and the Masala Bond. So MCDs are 2 years, 3 years maturing profile and the Masala Bond is another 2 years to go. So what we are doing now is that we will have a refinancing of complete rupee loan in whatever form they are currently through this dollar bond and that has a tenure of, let's say, 20 years amortizing and the bond which is currently outstanding, which will mature in 2026, before 3 months, we will do the refinance of that for another 30 years -- or another 10 years because the life of the asset is -- the matching with these things we have a maturity profile up to 2036 for the assets which is offered as a security under this. So this is the situation.

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Operator [37]

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(Operator Instructions) The next question is from the line of Harsh Agarwal from Deutsche Bank.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [38]

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Anil, Kaushal, just one more thing. In your presentation, you mentioned that the pro forma EBITDA in FY '23 will be about INR 32 billion, assuming that all the projects are completed that you currently have under construction and under acquisition. Can you also just help us understand the funding part of it, like how much is the remaining CapEx and amount to be spent on acquisition of these projects as of end of October, I guess? And then what's the funding plan for that piece?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [39]

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Harsh, Just one second, give me a second. So you're reading the fully built up transmission EBITDA FY '23?

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [40]

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Correct, correct, correct. I just want to know how much is the corresponding CapEx and like funding needs against that -- against, yes, the remaining projects.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [41]

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Is there a corresponding CapEx number against that, which we have signed up?

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Kaushal G. Shah, Adani Transmissions Limited - CFO [42]

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That is that INR 8,000 crores. So Harsh, I think, to answer your questions, we have already done the CapEx and the remaining CapEx, what we need to do overall is INR 8,000 crores. So with the existing CapEx plus INR 8,000 crores, we will end up doing that number. That's what is...

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Operator [43]

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(Operator Instructions) The next question is from the line of Anshuman Ashit from ICICI Securities.

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Rahul Modi, ICICI Securities Limited, Research Division - Analyst [44]

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This is Rahul from ICICI. And congrats for a great set of numbers. Sir, just I wanted your view on how the distribution business is working and in terms of the growth areas in distribution over the next 12 to 18 months that we are looking for the coming...?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [45]

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Rahul, the distribution business is doing very well. In fact, in 12 to 18 months, I would say, beyond 12 and within 18 months, we will have the hybrid generation, that we have recently been sort of pursuing for which we floated tender and received offers, is going to be up and above, which will reduce our cost of power purchase further and that will make us much more competitive. So -- and therefore, it makes our situation so much better, considering the fact that our cost of power has already reduced, you would have seen in this current quarter, despite the fact that we bought 110 million units more. Yet, these are able to reduce the overall cost of our power purchase.

So the exercise is to become competitive in that account because that's the key. And once our hybrid generation is up and above, that will further come down. So all of this will help us reduce our tariffs and become competitive. The distribution business, all in all, 2 key aspects: one is power procurement cost to be reduced; and the second important part is to make sure that we continue to reduce and improve on our AT&C losses. These are the 2 key areas on which there'll be a change. And of course, continue to do technological intervention to make sure that both the software and the network aspects are improved vis-à-vis customer interface.

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Rahul Modi, ICICI Securities Limited, Research Division - Analyst [46]

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Right. Sir, the CapEx that we were envisaging for the Mumbai area in terms of the transmission that the larger CapEx that was expected, sir, any movement on that front?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [47]

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Yes. In fact, it's moved very rapidly to an extent that we have already got pre-approval for high-voltage DC system, which is close to about INR 6,000 plus crore. And similarly, a lot of CapEx for this year and the next year in terms of the transmission system has already got approved. So I think now it's the implementation which is the key.

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Rahul Modi, ICICI Securities Limited, Research Division - Analyst [48]

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So we've already won that?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [49]

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Yes. Rahul, the distribution, in the MERC balance it is allocated to us. I mean we will propose and they approve. So the winning part is at ATL. There the part is approval.

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Rahul Modi, ICICI Securities Limited, Research Division - Analyst [50]

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Right, sir. And sir, the growth aspects in the distribution business pan India, where are all opportunities do you see coming? Because I think there has been a delay in the national tariff policy recently, and there was a host of privatization expected. So any view on that, sir, from a opportunity in the distribution space?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [51]

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So one would say that this entire spree of having elections and then the government, that's what delays the process. Otherwise I know for sure that there are state governments which were contemplating announcement in terms of going by the city route or panchayati route. But they all hold themselves back once the elections get announced in this country. One is only hopeful that you will see more opportunities in the days ahead because now at least the -- now it's very clear that the existing intervention haven't worked. So whether it is UDAY scheme or any other interventions, that doesn't seem to be coming up to speed vis-à-vis the expectation. And therefore, there will be change for the better.

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Rahul Modi, ICICI Securities Limited, Research Division - Analyst [52]

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Okay. So nothing tangible yet as a company you've seen and you are hoping that things would improve for -- in terms of opportunities?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [53]

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No, no. If you press me to quantify, I would say there is something tangible at Odisha, where all the 3 distribution companies are -- have been announced to be on the block, and they have announced some 8 franchisee in the CESU area. So yes, there are tangible opportunities which are there in front of us. I'm saying there are others which are also likely to come.

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Operator [54]

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(Operator Instructions) The next question is from the line of Mohit Kumar from IDFC Securities.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [55]

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Sir, Firstly, sir, given that the Reliance Power Butibori is not functional for quite some time, how are you managing your power purchase right now?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [56]

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Mohit, VIPL by virtue of not being operated for so long, we have given them a termination notice. And to that extent, the subject is right now under consideration of MERC, okay. As far as managing power in lieu of that concern, we have been able to actually reduce our costs because the cost of the VIPL was more expensive. In order for it to be replaced on a long-term basis, I told you that we have already gone ahead and announced the requirement of hybrid power, which will take care of the load profile of Mumbai and will help us further reduce the cost of input power to the distribution area.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [57]

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Okay. Sir, what is the quantum hybrid power you are looking at? Is it higher than the VIPL?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [58]

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The hybrid power that we have taken approval is 350 megawatt plus 350 megawatt grid, so it's 700 megawatt.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [59]

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Will that be sufficient...

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [60]

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Oh, yes.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [61]

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Will that be sufficient enough for us to meet our demand?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [62]

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Yes. We will have Dahanu, plus this power which will be there. So those 2 put together will take care of the power, which is consistent across the year because we don't want to commit to power which is going to be only for few months. But then we will do the short-term arrangements like the way we did during the current year, and saved a lot of cost.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [63]

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And so the capital expenditure you explained that you've got approval INR 6,000 crores, is -- this is over how many years? And this is related to any particular project? Or else any other band?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [64]

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This is related to our 500 KV high-voltage DC project between Khudus and Mumbai, and this is to be executed in a period of 3 to 4 years.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [65]

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What will be the general CapEx in the area?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [66]

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General CapEx in the area between distribution-transmission-distribution put together will be somewhere around INR 1,500 crores.

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Mohit Kumar, IDFC Securities Limited, Research Division - Analyst [67]

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Okay. And sir, lastly, on the Odisha, you said all 3 distribution franchisee -- there are 3 distribution company in the fray. So where do you expect this to be allotted? And secondly, what is the bid parameter on which the -- they will select?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [68]

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Mohit, right now, they -- these people are going through the prebuild discussions, and this has been announced by OERC, which is Odisha Electricity Regulatory Commission. As you are aware, they canceled 3 licenses which were earlier with BSES Limited. And having canceled those licenses, these people have now come up with those tenders. So right now, they're having pre-bid discussion on all those 3. So they haven't decided the parameter eventually, which they will announce, I guess, over a period of next few weeks.

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Operator [69]

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The next question is from [Jay Prakash] from HSBC.

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Unidentified Analyst, [70]

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I understand there are some promoter loans outstanding on the balance sheet as of now. Are there any plans in repaying them in this financial year?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [71]

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Jay, it's a very pertinent question. And in fact, the only question to which there are no easy answers. Yes, there is a large amount, which is there on our balance sheet, which is supposed to be returned to the promoter. They've been very kind and nice to ATL I would say. But the same time, our commitment is that it'll be only through a equity or equity-like issuance that we will be returning their money. So we are waiting such an opportunity, and once that opportunity comes then we will be able to return that amount partly. But at this stage, there are no clear plans to share. So the amount is still sitting there. And of course, it's very competitive to ATL, but from promoter's point for view, it's a money locked in.

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Operator [72]

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The next question is from the line of Harsh Agarwal from Deutsche Bank.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [73]

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Sorry. I have -- I'll just ask maybe 2 more quick questions. One was --

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [74]

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Go ahead, Harsh. Don't have to feel sorry.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [75]

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No, no. I have -- third time I'm coming back in the queue.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [76]

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All right.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [77]

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But just quickly, this big Obligor Group debt on Slide 24, has gone up a little bit on a quarter-on-quarter basis from June to September. Again, just curious why has that debt gone up? Is it because of FX? Or is it something sort of, again, short-term happening there? And also, can you share the EBITDA for the Obligor Group for the second quarter and also the first half, please?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [78]

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One second.

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Kaushal G. Shah, Adani Transmissions Limited - CFO [79]

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So Harsh, yes, this is the -- what you have said is right. There is some minor adjustment. Technically, we are allowed to keep INR 7,300 crores at the -- we added INR 7,300 crores at the beginning. So during the interim period, we are trying to optimize whatever is a treasury cost, and accordingly, sometimes we repay that and then roll over little later, so that detailed operation will happen. But overall, this year for Obligor, it will be in the range of around INR 7,000 crores.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [80]

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The EBITDA number for Obligor Group.

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Kaushal G. Shah, Adani Transmissions Limited - CFO [81]

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So let me just try to figure it out that.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [82]

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You can send it later, Kaushal bhai, if you want to.

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Kaushal G. Shah, Adani Transmissions Limited - CFO [83]

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I would send you that, separately.

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Harsh Agarwal, Deutsche Bank AG, Research Division - Head of Asia Credit Research [84]

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Yes. Both 2Q and first half.

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Kaushal G. Shah, Adani Transmissions Limited - CFO [85]

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Yes. Sure, sure. We'll do that.

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Operator [86]

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The next question is from the line of Prapti Gupta from BlackRock.

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Prapti Gupta;BlackRock;Associate, [87]

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Congratulations on the good set of numbers. This is just a repeat question. Actually, I missed it. I heard on the Masala Bond refinancing for which I think the announcements will come tomorrow. You also made a mention something on the '26 year bond -- the '26 maturity bond. Can you just repeat that?

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Kaushal G. Shah, Adani Transmissions Limited - CFO [88]

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So what we will do is that, that the bond will also refinance. We'll start that process before 3, 4 months and then we will get that bond also refinanced. So it is another bond. And...

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Prapti Gupta;BlackRock;Associate, [89]

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So this is another one that is a 30-year maturity bond?

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Kaushal G. Shah, Adani Transmissions Limited - CFO [90]

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No, no. It will be 10-year. It will be aligned with the life of the assets. So this will be in 2036. So we will do it for another 10 years or maybe 8 years or something like that.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [91]

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So 10 plus that.

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Kaushal G. Shah, Adani Transmissions Limited - CFO [92]

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Sorry?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [93]

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10 plus that. That's what -- so you -- right now, it is...

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Kaushal G. Shah, Adani Transmissions Limited - CFO [94]

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No, no. 2026 plus 10.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [95]

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Plus 10, yes.

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Kaushal G. Shah, Adani Transmissions Limited - CFO [96]

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Plus 10. Yes. And this is what I have right now, 2036 is based on 25-year calculation. Technically, it will be allowed for another 10 years also. So it is not 2036, it is 2046. But for abundant precautions we are just saying that 2036 based on 25 years. Normally, in India, always license is getting renewed for another 10 years. For the new TBCB project, currently, all the tariffs are also for 35 years. So if that happens, let's say, for this, then we will have a longer maturity for that 2026 bond as well.

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Operator [97]

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(Operator Instructions) The next question is from the line of [Bharath Ujala] from Goldman Sachs.

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Unidentified Analyst, [98]

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Just following up on the question of the new issuance. So the intention here is to do 500 million issuance and clean out all these remaining debt at the Obligor Group, is that right?

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Kaushal G. Shah, Adani Transmissions Limited - CFO [99]

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Yes, yes.

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Unidentified Analyst, [100]

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Okay. Got it. And just on Slide 24, just to know if I am reading this right. So this is the amount of debt sitting at these particular entities. So say, for example, at AEML, there is INR 8,500 crores of debt, is that the right way to read it?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [101]

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Correct, correct.

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Kaushal G. Shah, Adani Transmissions Limited - CFO [102]

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No, no. You are reading the debt.

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Unidentified Analyst, [103]

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Okay. Correct. That is not the debt undertaken for the acquisition, but that is the actually debt sitting under entity also, right?

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [104]

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That's correct. As of today, including further CapEx that they may have done, you would have seen, previous quarter it got reduced and got increased again. So that will be basically the additional CapEx requirements, et cetera. So as you know, the reflected debt will continue to increase with CapEx for AEML.

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Operator [105]

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Thank you very much. That was the last question in queue. I would now like to hand the conference over to Mr. Anil Sardana for closing comments.

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Anil Kumar Sardana, Adani Transmissions Limited - MD, CEO & Executive Director [106]

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So thank you, friends. Thank you so much for your participation in the Q2 conference call. If you have any further questions, you're most welcome to send that across to us, and our team will ensure that you get your responses. The same time, wishing you all a very happy new year, and we look for at the Q3 conference call down in February, perhaps. Okay. Thank you. Good day. Bye.

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Operator [107]

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On behalf of Adani Transmission Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.