Thank you. Good evening and welcome to the Q4 earnings call for IndiGrid Infrastructure Trust.

Today from the management, we have with us Mr. Harsh Shah, Managing Director, Ms.

Meghna Pandit, Chief Financial Officer, and Mr. Sanil, Chief Operating Officer.

We will begin the call with the opening remarks from the management, after which we'll have the forum open for an interactive Q&A session. I now hand over the call to the management.

Thank you, and over to you, sir.

Hi everyone, thank you for joining our quarterly call. As we have done before, I'll start with the presentation, and Meghna and Sanil will take you through the quarterly performance and the forecast, and subsequently we'll take question and answer.

On slide three, I would like to reiterate our vision is to become the most admired yield vehicle in Asia, while we focus on a focused business model, value-accretive growth, predictable distribution, and follow-up, an optimal capital structure. As we stand today, in slide four, assets under management are approximately 33,850 crores.

We are spread across 20 states, including Union territories, with 94 different revenue-generating elements. We own about 55 lines spanning across 9,700 circuit kilometers, meeting sub-stations, crossing 32,000 MVA of capacity.

We also own 1.5 gigawatt peak of solar, and average residual contract life of contracts is 5.3 years in transmission, many of them are BOOM projects, solar about 20 years, and less about 11 and a half years. On the front, we have approximately 2.5 gigawatt RF capacity at different stages of development, including two projects totaling about 440 megawatt are commissioned.

Taking you through the quarterly update on slide number 6, we welcome Mr. Gautam Mehra as an additional independent director on board of investment manager.

Mr. Mehra comes with over four decades of invaluable experience across taxation, regulatory, and asset management businesses.

He was an erstwhile partner at PwC and also is a member of Audit Security Committee at SEBI. We commissioned Gujarat BESS Private Limited, GBPL, which is 180 megawatt by 360 megawatt peak capacity.

This plant is located in Gujarat, and GBPL is one of India's largest standalone utility-scale best project at any single location. We also commissioned NRSS projects, regulatory tariff project during the quarter and was awarded three more RFP projects under the UP scheme, with a cumulative value of about 165 crores of expansion.

We also consummated acquisition of Gadag Transmission Limited from Renew, which is approximately 187 kilometers of line and 1,500 MVA of capacity transmitting renewable energy power from Karnataka. As far as the financial performance goes, our operating revenue stands at 874 crores, which is up 9.5% year on year, primarily by adding new projects in the portfolio through the year.

Our revenue growth translated into operating EBITDA growing by similar 8.5% year on year, and EBITDA 782 crores with a margin of 89%. FY16 full financial year financial performance, the operating revenue was 1,311 crores, up 3%.

and operating EBITDA 2,98 crore, approximately 90% EBITDA margin, and growth of 2.4%. Our AUM and net debt to AUM at the end of the fiscal was 33,800 crores and leverage at about 57.6%, respectively.

Collection for the quarter four again great at 102% for transmission and 97% for solar assets. Distribution performance, we delivered our BPU as committed at 4.4 rupees a unit for the quarter, finishing the year with 16 rupees as guided.

For FY27, we have guided the BPU amount at 16.48 rupees a unit, which will be about 4.12 a quarter, which is a growth of 3% year on year. Average availability of transmission assets at 99.54%, and solar CUF is standard at approximately 24.2%.

With all this, we are sure that we'll be continuing to deliver superior total returns, sustainable increasing repeat, and stable operations. Going to slide 7, which is the industry update.

I'm sure all of you have read about that India is serving one of the highest peak demand in this quarter at 245 gigawatt, and the highest one that it served was 256 on April 25th in this quarter, which is crossing the previous high of 2026. Overall installed capacity stands at 533 gigawatt, of which 51% is from RE.

The installed capacity and RE's contribution year back was around 46.3%. While this is just the beginning, and it's clearly mentioned in CEA's Transmission and Resource Adequacy Plan that CEA has increased the energy transition goal by targeting integration of 900 gigawatt of non-fossil fuel by 2035-36.

We are talking about doubling our goals in the next 10 years. Also, NLP has been launched and there has been some activity around it.

We will continue to monitor if there are opportunities for IndiGrid to participate. We go to the next slide.

We think that there are a few strategic pillars which is driving the market in power transmission and renewable energy. First is the scale of the opportunity.

We feel it is a multi-decade transmission opportunity, considering the requirement of energy independence, energy security, and energy affordability. We feel that transmission plays a very crucial role in ensuring that renewable energy, which is at grid parity, is delivered at the right place at the right time.

We feel the transmission sector is underinvested and will continue to offer great opportunity for expansion in the coming decade. In addition, there is going to be a rising need for energy storage, while we have taken a leadership independent battery storage plant in the country, we believe we'll be one of the largest in the coming year.

We are concerned about the incremental capacity which is bid out at unviable tariffs, but we do hope that eventually the need for energy storage is so much that the bidding will become rational and there will be opportunity for viable projects to come in through. Execution is the moat.

I think, as we see, gradually it's shifting from cost of capital-driven to execution capability-driven market. We are seeing project execution, land access, and transmission connectivity becoming key differentiators.

RE ambitions will drive growth. Certainly, as I mentioned before, it is important for India to ensure energy security and safety.

We do feel that there will be great emphasis on renewable energy investment and therefore grid investment. NP2, there is more and more recognition for InvIT structures and unit-linked capital recycling.

We are expecting that there is going to be more and more assets available in the market, and we will be continuing to watch as it grows. In the next slide, as we can see, there is high bidding activity in transmission and best sector.

At a high level, we are looking at active bids of over 2 lakh crores of transmission bids. Just to put things into perspective, this is almost equivalent to what happened in the last 10 years.

We are seeing massive amount of requirement of grid getting approved to ensure that grid gets ready for the energy transition led by renewable energy projects. We participate in most of these projects and hope that eventually we will get our fair share at reasonable returns.

Coming to slide 10, for quarter four operating performance, I would invite my colleague Sanil to take you through the operating performance for the business.

Thank you, Harsh, and good afternoon to everyone. We continue to maintain superior availability and performance.

With respect to the safety updates, we had one lost time incident where there was a technician who suffered minor burns on his hand when working on a panel. With respect to the performance, the power transmission business had a weighted average availability based on asset revenues of 99.54.

We had some planned outages in the quarter. The solar generation was at 603 million units at 24.2 CUF, and the battery storage project at KBPL that is in Delhi, it had a weighted average availability of 98.55 percent, much beyond the required as per the service agreements.

With respect to the reliability of the assets, the trips per lines stood at 0.1. Majority of the trips happened due to various weather-related incidents, thunderstorm, etc.

The substation trips per element was at 0.01, well in control, and the solar availability or the plant availability was 98.2 percent. We had a couple of failures of inverter strings and some cable cuts, etc., which happened at various locations.

If you look at this graph, the availability of all the assets were beyond normal, except RSTCPL, that is Raichur Sholapur, and GPTL. These were mainly due to the planned outages of RSTCPL for rectification of insulator failures, as well as in GPTL we had a failure of one reactor, which led to a slight reduction in the availability.

Coming to the right-hand side table, you can see that the key indicators are all within control. Number of trips per line at 0.1, training man-hours well around 15,800, lost time incident one, like I explained earlier, unsafe conditions reporting strong, and near-miss reports also were done, as well as their corrective and preventive actions were taken up.

The generation was at 603 million units with a plant availability of 98.2 and CUF of 24.2. That's all from my side.

May I hand over to Meghna to take up the next slide?

Sure, thanks, Sanil. Hi, good evening everyone.

I'm on slide number 11 on the Q4 and FY26 financial performance. The left-hand side table talks about the reported financial performance for the quarter and for the year.

The reported financial performance includes accounting basis on service concession, which are for under-construction projects under the BOOT structure. A tariff asset is typically capitalized during the under-construction period, basis percentage completion, and revenue is then recognized periodically, progressively then eliminated the concession accounting over the life of the operational tenure.

Essentially, the reported financial performance is in line with accounting standards IFRS 115, and we've shown the operational financial performance that you see in the table on the right-hand side. On the operational revenue performance, you can see that the revenue has grown by 9.5 percent on Q4 FY26 over Q4 FY25, from 798 to 874 crores.

Year-on-year growth stands at about 3.1 percent, from 3,212 crores to 3,311 crores. This is on the back of the acquisition that we did during the year as well as the operationalization of certain RDM projects and the under-construction projects.

The operational EBITDA for the quarter stood at 782 percent, which is 8.5 percent increase over Q4 FY25. Year-on-year increase is about 2.4 percent, from 2,930 to 2,982 crores.

NDCF generated during Q4 FY26 stands at about 405 crores, which is a marginally dip number by 6.7 percent over Q4 FY25. That's basis certain working capital movements which happened during the quarter.

Similar impact was also seen on a YoY performance, wherein there is a minor dip in the NDCF by 1.3 percent, from 1,400 crores to 1,382 crores. The DPU per unit, as guided, is 4 rupees for Q4 FY26 and in line with the guidance provided for FY26 of 16 rupees.

Both the charts below provide Q4 FY26 performance, contribution of the operational asset as well as the service concession accounting revenue, as well as for FY26. Moving to slide number 12, which talks about the Q4 and fiscal year 2026 collection and receivable profile, which continued to be very healthy.

Left-hand side graph talks about the transmission assets, which clocked in 102 percent of collections in Q4 FY26, with days sales outstanding at 37 compared to 38 days in Q4 FY25. On the solar assets, the collection stood at 97 percent in Q4 FY26 compared to 89 percent in Q4 FY25, and the receivables days stood at 37 percent, significant improvement compared to 48 days in Q4 FY25.

Moving on to slide number 13, which talks about the distribution update. The distribution per unit of 4 rupees for Q4 FY26 is contributed by interest, dividend, capital repayment and other income, the record date for which is 19th of May 2026, and the distribution date will be tentatively on or before 26th May 2026.

The outstanding units Q4 FY26 stands at 95.26 crores, which is higher than 83.46 compared to last quarter in the last fiscal year, basis the dilution that we did on the back of the preferential issue and the insitu replacement. The NAV per unit for Q4 FY26 stood at 148.24 rupees, compared to 144.11, on the back of movements in the VAC as well as the asset acquisitions that happened.

With the Q4 distribution, 117.32 per unit rupees, amounting to 76.48 billion, has been distributed to the investors since listing. If you look at the right-hand side graph, which talks about what has been the annual distribution trend over the last 5-6 years, as targeted, we have ensured that the CAGR for the DPU is about 5.4 percent from 23 to 27, including 16.48, which is the guidance for FY27, a year-on-year increase of about 3 percent.

Moving on to slide number 14, which talks about the consolidated EBITDA to NDCF waterfall. Starting from the EBITDA generated at the SPV level at about 985 crores, adjusting for all the working capital movements, the CAPEX-related movements, investment in the under-construction projects, and the tax, the NDCF consolidated at SPV level is about 854 crores.

After that, adjusting for largely the finance cost at IGP and Destra working capital movements and tax movements, the total NDCF generated at IndiGrid trust level is at 405 crores, out of which the distribution for the quarter at four rupees stands at 381 crores, with which about 24 crores was added to the NDCF reserve during the quarter. With that, the NDCF reserve as on 31st March 2026 stands at about 544 crores, more than about one and a half quarters of distribution, which is part of this NDCF reserve balance.

Moving on to slide number 15, which talks about the balance sheet strength of IndiGrid. As we are all aware, IndiGrid is AAA rated by CRISIL, ICRA, India Ratings, with an average cost of debt of about 7.4%.

Almost 90% of the total gross borrowing of 210 billion is on a fixed-term basis, with the leverage ratio at 57.6% and very healthy interest coverage ratio of 2.08 times, including a cash balance of about 18.14 billion, which includes the DSRA balance as well as the NDCF reserve. Coming to the gross borrowing, it is fairly well distributed across all classes of debt investors.

71% is across NCDs and about 29% is across bank loans, all of which are subscribed by various investors, including mutual funds, banks, financial institutions, corporate trusts. Loans are also subscribed by public and private sector banks put together.

If you look at the graph at the bottom of the chart that talks about the refinancing schedule for IndiGrid from 27 onwards, as you can see, it is a well-diversified and termed-out borrowing profile, where we have ensured that not more than 10 to 12% of gross borrowing doesn't come up for refinancing in any particular year, so that we avoid any bunching of debt maturities in any particular year. Moving on to slide number 16, which talks about the total returns to the investors, total returns being a combination of distribution per unit and the price change.

As you can see, that IndiGrid has delivered about the absolute total return of 183% since the time we got listed in 2017, which translates into an annualized return of about 13%, which compared to the risk adjustment, which is depicted by the beta, is very close to 0.08, which compared to both pure debt indices as well as pure equity indices, we can see that IndiGrid has delivered superior risk-adjusted returns, and we continue to do so. Moving on to the business outlook from here on, our portfolio strategy remains consistent, wherein we focus on maintaining stable operations for ensuring predictable and sustainable distribution on the back of value-accretive acquisitions.

Since the last few years, on the greenfield development, we are taking strides, and in that we are ensuring that our focus on the execution on the augmentation work, which we have received through the RTM project, as well as the transmission and battery energy projects that we have won, get executed on time along with EnerGrid. In addition to that, there are a lot more synergistic greenfield opportunities which are coming up, which we will look to participate in through EnerGrid.

Similarly, deliver on the DPU guidance of 16.48 rupees per unit for FY27 on the back of these acquisitions, greenfield development, and disciplined capital deployment. Balance sheet strength again continues to be a focus area to ensure that we optimize on the interest cost and elongate the tenor profile with respect to any refinancing as well as any upcoming acquisitions.

Asset management continues to be a very important pillar for us, where we ensure that we sustain minimum 99.5% availability across the portfolio, and in addition to that, look at strengthening self-reliant O&M capabilities to ensure how we are able to maintain sustainable performance. Similarly, uphold world-class ESG practices as well.

Industry stewardship again continues to be a focus area, both across the electricity sector as well as on the regulations developed for InvITs across the industry. With this, I'll just take a pause here and we can move to the question and answer session for the quarter.

Thank you.

Yes.

Hello, I have two questions for you. My first question is, in Finland, they have perfected a technology whereby electricity is directly transmitted to a household without using any wires, through the air.

What happens if this technology becomes globally adopted, and India also starts transmitting electricity through the air without using any wires? What happens to the business then?

What happens to the business model then? That is my first question.

This is a hoax. As of now, there is no proven viable technology that exists to transfer electricity without conductors.

There have been experimental projects for decades in Finland, in New Zealand, in many parts of the world. However, none of them has even reached small critical mass.

This, in our mind, is a dream. Even if it was to happen, our contracts are take-or-pay, we will get paid in the end of the life, and subsequently what happens, we will see.

As you can see, that even renewable energy is generated today at two and a half, three rupees, but for almost six, seven years at a commercial scale, the country is still running majority on coal. For any new technology, even though it is viable, for any country of our scale, takes two, three decades to really adopt that technology at scale.

First, we do not think that such technology exists except in research paper and photographs. Second, if at all by magic if this technology comes into place, it's going to take a few decades before it can be implemented.

My second question is this year you announced just 3% increase in guidance to 16.48 for FY27. Usually we normally announce a 5 to 6% increase in guidance.

Why has the guidance been so low this year? When will we go back to the usual norm of 5 to 6% increase in guidance?

Why is the guidance so low, only 3% this year? When will we go back to the normal 5 to 6% increase in guidance?

That is my second question.

thank you. Yeah.

To answer your second question, we have historically done 3 to 5 percent, sometimes more, sometimes less. We are operating in a bank, and the growth is completely dependent on the opportunities that we see, how the business is performing, what kind of growth opportunities do we see.

Once we increase the guidance, we want to be comfortable and ensure that that incremental guidance continues for a reasonable period of time. Therefore, we take that decision every year and give you a guidance.

If there is an additional cash flow available for some year, we increase higher, and when we are sure that that cash flow is sustainable for a longer period, we increase that. Where we think that if we increase it too much, it is going to be difficult to sustain, we come back to a lower band.

It is purely reflective of how we are seeing the business and operating cash flows, which are going to be sustainable. At the end of the day, there is not a bond, right?

It is based on how the business is performing and how we are seeing the growth in cash flows, and based on that we guide. I would say 3 to 5 percent is a reasonable range we are telling you.

Thank you. That is it from me, and keep up the good work.

Thank you.

Thank you.

Thank you for the opportunity. Audible?

Am I audible, sir now? Better?

Hello?

yes.

Yeah. Sir, a couple of questions.

One on the NAV part. Currently we are at 148, and we are expecting around 7,500 to 8,000 crore of under-construction projects, which will be commissioned in around, what, 12 to 14 months' time.

Do we see some significant increase in our NAV by the end of this year?

I cannot predict NAV, right? NAV has two factors.

One is the projects that get commissioned and will reach to the NAV as the new projects are acquired. On the other hand, there is debt, there is asset value, there is EBITDA, there is risk-free rate.

There are many variables of NAV.

So

we do not control all of them, it's impossible for us to predict NAV.

So, My question revolves that when will it be broadly added into our AUM? Once it gets commissioned, we'll add it in our AUM, right?

Yeah,

we see over a period of 12 to 24 months, you will see different assets getting added. Each asset has a separate concession agreement, separate timeline of commissioning, and separate acquisition date.

All the projects that we currently have will have in the next 12 to 24 months, we should see them getting added.

Sure, sir. I appreciate that you have added the DPU accretive acquisition slide, which you have been guiding that you will add in the last quarter, which is slide 19.

Just one question on that. 16.48, which consider, just wanted to ask, it is considering our under-construction pipeline of 7,500 to 8,000 crores of that getting added to our AUM?

It considers that under-construction assets distribution as well?

Yes, as you can see in phase five, the yellow curve, that's already showing acquisitions plus greenfield plus augmentation.

Okay. Broadly, can we interpret it in this way that till FY31 or 32, 16.48 can be maintained without acquiring anything additional?

I think that is the right way to look at it.

Sure. Sir, one last thing, do we have a broad guidance of DPU breakup, as in I've been seeing that interest is around 60 to 65 percent of our total DPU, and balance is dividend and capital repayment.

Broadly, should we expect that trend to continue?

It's impossible for us to give you that guidance because we have over 30 SPVs, and we have to follow the accounting and CBI norms around that. Depending on which SPV has more cash, less cash, the dividend principle and interest ratios keep changing.

It's difficult for us to guide, but broadly we feel it will remain in a similar range, but it's impossible for us to predict accurately. That's why I keep disclosing quarter on quarter, depending on which SPV has generated cash.

Directionally it remains similar, but difficult to predict and give you an exact projection.

Sure, sir. Thank you.

I was broadly asking from a taxation standpoint, but I think this helps. Thank you and all the best, sir.

Yes, thank you for giving me the opportunity to ask this question. I hope I am audible.

Yes.

Yes. I am a happy investor of Indigrid since 2020.

Just wanted to congratulate the team and just wanted to request you to throw some light on the growth outlook of Indigrid in the coming decade and the scope of Indigrid in the power sector distribution business in the coming decade. Thank you, sir.

Thank you. I think, as I said earlier in the beginning, we are seeing unprecedented need for energy independence and energy security for the country, and which is driving a lot of investment in renewable energy, which requires a lot of investment in grid and battery storage.

By that rationale, we do see a continuous need for the next 10 years for investment in transmission and battery storage. Overall market size, we feel in the next 10 years will easily cross 9 to 10 lakh crores of capex.

Now how much of that comes in bidding route, etc., is for the details as we go. As I mentioned, we are clearly seeing a pipeline currently of over 2 lakh crores, and subsequently I'm sure more projects and more pipeline will come.

We are fairly confident that there is a sizable amount of investment is going to take place, and we feel comfortable in terms of our capabilities as well as our shareholder base to be able to leverage that and participate in this growth. We are confident that there will be opportunities for us to acquire new projects, win new projects, and really grow.

Thank you.

Hello, I have a question with regards to recently there were a lot of fast breeder reactors and nuclear power which have been commissioned. Do you think that IndiGrid will have some kind of future in nuclear power as well going forward?

Is the transmission for that different from what it is for another renewable asset? So

to answer your second question first, transmission is exactly same. One of our asset is already evacuating power from a nuclear power project in Rajasthan.

It's a dedicated transmission line for nuclear power. Having said so, we do not have any plans of getting into small breeder reactor or any kind of nuclear energy at this point in time.

I think both in terms of technical expertise as well as complexities, we are far away from any of that. I do not think we will be getting into generation of nuclear power anytime soon.

Transmission, as I mentioned, is the same lines that work. There is no different technology.

As and when expansion takes place for that grid, we would be looking to participate.

Secondly, I just wanted to know that what is the current NAV for the assets as of 31st March? How do we interpret NAV addition going forward?

I heard on a call you were saying that you wanted to

add

assets which are value accretive or DPU accretive. I'm assuming that is in line with increasing our NAV also.

So

is there a particular process which you will have in mind how do you evaluate whether a particular asset is going to be value add and NAV accretive? Yeah.

So

one is how do we evaluate, second is how as investors you can check. I'll go to the second first.

While we are disclosing the NAV of 148.24 rupees, the computation of NAV of how the assets are getting added as well as each SPV's individual valuation report is going to be there in our half-yearly reports that we circulate. Therefore one can tally that let's say for example March 31st the NAV is 148.24, what is the each asset's valuation in crores minus the debt, minus any other adjustments, plus cash divided by number of units.

That computation is a very simple model that one can build, very simple Excel, not even a model. Then you can compare quarter on quarter how the valuation has changed.

That's the best way to calculate. We obviously run models to see that when we add this project, how much is going to be accretion in NAV terms of valuation of this asset minus the debt that we fund with.

You also have the same data available once you acquire. It's a very simple slide or a file that one can build to keep track of it.

Yeah. Sorry, I think so.

My question was not on how to calculate the NAV. My question was that how will we know whether the particular asset which we are adding is actually going to be additive to the NAV,

like in what kind of... Keep all the assumptions in the Excel same, just add the cash flows of fair market value of the asset that we have bought at, minus the debt we have funded with, should give you the accretion of that asset.

Okay. Thank you, sir.

I'll get back to you.

Good afternoon, Harsh and team. As always, the numbers remain very impressive.

A couple of questions. The first one is on battery energy storage.

BESL, we are probably one of the pioneers to get into it, and we already have run a particular BESL in Delhi for a year now. Harsh, would love to understand from you what is the lessons that we are learning in terms of return on capital employed?

Is it comparable to what we would typically earn from a transmission line when it is bought out? That's question one.

The question two is originated from the number where NDCS generated has reduced in this quarter, although the operational revenue has gone up. I heard Meghna mentioning that there were some working capital transactions, and I presume this was the amount which was largely used up for our assets under construction.

That brings me to probably an important question on whether so far our business model was always a hedge against the business cycle. We would buy out an asset and rent it out and earn a rental on it.

Probably for the first time we are venturing out into taking risk and building an asset rather than buying it out. I would love to understand going forward what's going to be your thinking on this particular aspect.

Thank you.

Sure, thanks. To answer your first question on battery energy storage, we have now two plants which are functioning.

The first plant has over one year of performance, and the second plant has just about a couple of months, three months of performance now. In both of them, we are very happy with the performance of both technology OEMs that we have worked with, and the output as well as the cost has been pretty much what we had envisaged at the time of conception of this project.

In terms of return, it depends. I think both these projects we won at a time when there was no competition, or less competition.

Subsequently we executed it well. The market supported in terms of reducing battery prices at that point in time, and therefore we had projects which had very good return, which is substantially higher than what we would have earned in any other projects.

For us, return or IRR, DPU accretion matters more. We think whether it's transmission or BES, we are okay to earn similar returns as long as the counterparties are same or similar.

In our best projects, we have earned higher returns going to the fact that we were early and therefore we had better opportunities. On the next question, partly you are right.

We are carrying interest burden on the amount that we have invested in projects, and as they come to fruition, the NAV will show. We are aware of that risk, and honestly, the SEBI allows us to put in approximately 10% of our AUM in under-construction assets.

Investing under construction at a development stage offers many advantages to us. One, it allows us to control quality, allows us to control the returns that we earn on that project, and allows us predictability of asset acquisition.

With that in mind, we had ventured into this three years ago, three and a half years ago. This is not the first time.

Till now, we have commissioned three projects, four projects: two transmission and substations, and two battery storage projects, all of it on our own. We started with a 200 crore asset, honestly, then went 200 crore, then another 700 crore that we commissioned now.

There is sufficient experience within the team to expand on this space. Having said so, we are well within the 10 percent that SEBI allows us.

Our numbers are very smaller than 10 percent, and by that virtue, the impact on NDCF also remains limited, and therefore we consistently evaluate that how much do we invest and how much time we'll have to carry the interest on that investment while delivering 16.48 or any other DPU that we have guided. That already takes into account such, I would say, investment cost, and then that is one of the reasons that when they commission, they give us ability to increase as well.

You

got the point. Thank you so much.

Thank you.

Hi, good afternoon, Harsh and team. Am I audible?

Yes.

Hi. I have a basic question that SEBI has allowed real estate investment trusts to be counted as part of equity allocation, and consequently in the last one over the other, a lot of mutual funds have increased their REIT allocations.

Is the InvIT lobby also pressing SEBI to be counted as part of equity investments? If yes, what's the status on that?

See, I won't use lobbying and such words. I think we do work with SEBI and other stakeholders to put appropriate qualification for InvITs.

The proposal was to consider both InvITs and REITs as equity. There was a public consultation that was done by SEBI, I think last year, and based on that public consultation and views that SEBI received from a variety of stakeholders, starting from REITs, InvITs, mutual funds, market participants, private REITs, private InvITs, and then SEBI finally decided that the goal is to ensure that more participation happens in InvITs and REITs.

They said that REITs as a business model is more equity-like, and therefore they want to start with REIT classification as equity. They will see the experience over a couple of years, and based on that, they'll do another consultation at some point in time.

They have the requirement for InvITs if all the InvITs really want to do that, and they'll take that up later. It is also a fact that in REITs there is only public REITs, right?

All the listed REITs are unanimous in their view that how it should be looked at. On InvIT space, it's a mix.

There are a few public and there are many more private. Typically the private InvITs would refrain from calling itself equity because it has issues with who can invest, who cannot invest, etc.

Now, as you would have seen, many of the private InvITs are also getting into public InvIT space. I'm sure in a couple of years' time there will be more public InvITs, there will be better experience of equity being listed, and that's something which at that time we will go and work with regulators and request them to consider again.

Having said so, I don't see material benefits, honestly. We already enjoy equity taxation.

We are listed on both exchanges. We are very well traded.

While Indian index fund is not able to include us without equity classification, but honestly the regulators will take queue that foreign funds or foreign indexes are already included. IndiGrid is part of FTSE index as we speak, and it got included in last year.

And

based on that, we saw a lot of passive flows coming in of huge index fund providers. I think eventually market forces will take shape and the regulator will recognize that global investors do look at this as equity, and therefore India should follow.

We're hoping in next couple of years it will fall in line.

Thank you for the explanation. My concern was coming from another small point, which is an addendum to this.

Brokers don't accept IndiGrid's margin, while they are accepting REITs' margin. I am one of the earliest investors because I have been invested since the IPO,

and that also creates

a very big liquidity issue in our books that we can't use IndiGrid's margin in there, never to sell it. Hopefully, the way you guys are executing,

and absolutely

flabbergasted with the way you've executed, and thank you for that very much. That margin funding requirement is something which we can't satisfy the liquidity.

Any light on that, it should go through?

This has come before as well. We are not usually aware about how the market participants work, but SEBI does consider units as security.

Now, why it is, from margin funding perspective, I think the classification of security is important. I'm not sure if there are other criteria.

Once it is security, I think it is more law not to lend against that. It is just market practice.

I think once few large players will start doing it, it will follow. We are looking to implement, and honestly a regulator won't even consider a view that allow margin funding because I'm sure it's kind of looked down upon within the regulatory circles.

First, I'm not sure if law stops you margin funding. It's market practice.

Second is, I don't think that it's looked at favorably by a regulator. It's difficult for us to present because we are not a party over there.

Maybe some investors this needs to go.

Got your point. Thank you very much for the explanation, and all the best.

Thank you.

Hello. Sir, just one follow-up on the question that an earlier participant had asked regarding the under-construction risk point that you were making.

The under-construction assets, sir, are under Energrid, right? Technically IndiGrid doesn't have that interest rate risk on its books.

Can you please throw some light here?

Yeah. We invest in Energrid asset, about one-third equity required.

Whatever equity we invested in that, on that we have to pay interest, right? Because we are borrowing.

While we have cash, but effectively if we didn't invest, we would have repaid that cash, the debt, right? Accordingly interest burden will be lesser.

In an indirect manner, that is the cost of carry, if I can say, for such investment. We do invest in projects in Energrid, and that is how we are passing the expertise and getting a confirmed sale to us.

Got it, sir. Thank you.

Good evening, sir. The board meeting had an agenda of fundraising.

Could you please clarify if you are leaning towards more equity dilution, or is it through debt?

We raised two issuancees in the last six months. At this point in time, there is no direct immediate placement in mind for equity.

We plan to take approval every year in the quarter four board meeting from now on, which allows us to be a little more agile because most of the time when we have to raise capital, whether it's institutional placement or preference issue or anything else, calling another board meeting and shareholder meeting becomes an additional step, which exposes us to more price risk. We decided from this year that every year we'll take approximately 2,000 crores of approval upfront, and depending on whether we see new assets coming in and if we have to raise equity, we'll be able to be a little more nimble and agile on that.

That's why we're taking a preemptive approval. At this point in time, there is no immediate placement issue that we foresee on any equity.

Thank you, sir.