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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day, and welcome to the Q1 FY '23 Earnings Conference Call of Dilip Buildcon hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Jiten Rushi from Axis Capital Limited. Thank you, and over to you, sir.
Thank you, Ruteja. Good evening. On behalf of Axis Capital, I welcome all to Dilip Buildcon Q1 FY '23 Earnings Conference Call. From the management, we have with us Mr. Devendra Jain, Executive Director; and CEO; Mr. Rohan Suryavanshi, at Strategy and Planning; and Mr. Sanjay Kumar Bansal, Chief Financial Officer. We also have Investor Relations team of Accenture in the call. To begin with, we shall have opening remarks on the management followed by Q&A. Thank you, and over to you, sir.
Thank you, Jiten ji. On behalf of the whole DBL family, it is my pleasure to welcome all of our partners and investors for our quarter 1 call of FY '23.
I will just quick over quick update of the overall economic scenario on the industry scenario and the company update, which will be followed by a quick look at the financial performance by our CFO. So as always pleasure to welcome all of you. To start with, just to give you guys a quick update on the Indian economy. So the Indian economy is expected to hold a well despite global headwinds such as surging commodity prices and disruption in trade and financial transactions. We've all seen the post-COVID world and now people are started to adjust to the new normal now. And now globally, not just government, but country banks are taking steps according to all the challenges that have come in the last couple of years. Even the Indian government, and currently, the RBI as well in its latest monetary policy maintained a growth forecast cost of 7.2%. So the Indian economy looks pretty promising. GST collections, manufacturing PMI, IIP, credit, rail freight services, PMI, et cetera, all have shown robust opportunities in the economy with the PMI number reaching 11-year high in May of 2022.
While we had good growth, inflation has also been a challenge. To continue this, the RBI has recently hiked its policy rate by 140 bps in this current financial year to date. And there also reduced liquidity in the market to control the inflation, which is above the RBI target 2% to 6%. RBI has projected inflation to be at about 6.7%. And it also expects the inflation to stay elevated for a couple of quarters but then we expect it to hold to a more comfortable 5% by the start of FY '24. We should hopefully see cooling down of prices going forward. Now for the infrastructure update. For the '22, '23, the Ministry of Road Transport & Highways have set very ambitious target of 50 kilometers per day for highway construction. Now this translates into a little over of 18,000 kilometers of road build for the entire fiscal. While it's heartening to see the ambitious targets set by the ministry, the execution has been a little slow than what was expected. This has primarily been due to the surging input prices. This has led to developer delaying procurement of materials. So the highway construction slowed in the first quarter of the current fiscal to just 22-kilometer a day, which is down 14% year-on-year versus the -- and for the last year, it was about 29-kilometers per day for the whole of FY '22. The recent moderation and key input is holds good, but levels are still elevated and the situation is still fluid. While inflation require remains a key concern, we are hoping that the government and the central bank will be able to rein in more, and we should be cooling. The awarding definitely will scale up significantly in the next 9 months to achieve the industry's ambitious target of constructing 50-kilometer per day. We're expecting this year to have number awarding. And it aims to award, remaining length of about 14,389 kilometer of highway projects under the Bharatmala program over the FY '23, '24 time line. Nearly 55% of the projects that are expected to be awarded. We expect to be awarded under the hybrid annuity model, while 45% of project will be under EPC, which is a rough estimate of what we think. While growth sector has seen good, I'm also very happy to report that across infrastructure sector. The awarding activity was very robust. And in fact, according to 1 report, it has been about INR 1.77 trillion worth of projects were awarded in the first quarter, '23, which is higher 83% year-on-year. So across the infrastructure segment, there is a push by the moment to give our projects and consider their master infrastructure pipeline target.
Now moving on from the sector, some recent company updates. I'm happy to report that we received the completion certificate for Sangli-Solapur. Besides this, we also declared L1 builder for about INR 4,000 crores of products in the first quarter. And as of now, today, we've won about INR 600 crores of projects in total, details of which can be seen in our presentation. Now moving to the financial performance, I will go and hand over to our CFO, Mr. Sanjay Bansal. Thank you.
Good evening, everyone, on the call. This is Sanjay Bansal. Let me now move on the business performance of DBL in Q1 FY '23. The revenue increased by 22% in Q1 FY '23 y-o-y basis from INR 21,463 million in Q1 FY '22, to [ INR 26,215 ] million in Q1. This is due to better execution of the various projects. The EBITDA decreased by 27% in Q1 FY '23. The EBITDA margin has decreased on account of line 2 reasons, 1 is execution of old projects, which DBL won in 2018, where projects are executed during extended period and resulting in 2 additional fixed overheads, which were not offsetted even if the is expansion in the is [indiscernible]. The second reason increase in material prices like in cement, bituminous, diesel and steel and even aggregates. This increase in metal prices was unprecedented. Finance costs decreased by 15% in Q1 FY '23 on Y-o-Y basis mainly on account of decrease in interest on cash credit, debentures and mobilizing advances. There is acceptable profit of INR 170 million on account of transfer of balance [ 51% ] stake 2Q is 1 of the subsidiary out of the total substitutes under divestment. Profit after tax decreased by 27% in Q1 FY '23 on account of decreasing EBITDA.
Now let me take you through some important items of the balance sheet. During Q1 FY '23, we have spent INR 100 million on fixed assets. Inventory increased marginally in Q1 FY '23 by INR 373 million from Q4 FY '22 due to increase in WHT, it is expenditure incurred on new projects. The receivable increased to INR [ 10,227 ] million in Q1 FY '23 from INR [ 10,380 ] million in Q4 FY '22 on account of delays of collection period by 5 to 7 days from customers in projects. The other financial effects increased by -- increased to [ INR 13,151 million ] in Q1 FY '23 from [ INR 11,039 million ] in Q4 FY '22 due to unbilled revenue, which is work executed but not satisfactory. In net debt equity ratio increased to 0.66x in Q1 FY '23 with a as 0.63 times in Q4 FY '22 and increased base [ INR 1,490 million ] in absolute terms. The working capital days decreased from 32 days as of 30th June which is 89 days as on 31st March 2022. Now we can open the floor for the question and answer.
[Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital.
First of all, good to see after a long time a healthy execution, so that's why I would like to congratulate the team for a good execution. So now coming to the questions in terms of the guidance, particularly for -- so last time, you said INR 10,000 crores kind or INR 10,000 crores plus revenue. So are we slightly upgrading the guidance on the execution front?
No, Shravan Ji. The guidance will have the same as we have guided in last time around INR 10,000 crores in years. But thank you for your nice words. We have level which is earlier to enable to do the most that we can and obviously, some time along because of COVID except the rainfall, lockdowns, but as business resumes, we're [indiscernible] That we will continuing to ramp up our execution, both this [indiscernible] quarter revenue.
Okay. And on the awarding front, so we already got INR 6,094 crores and we are looking at INR 8,000 crores to INR 10,000 cores. So do we see even higher INR 12,000 crores, INR 15,000 crores kind of inflow this year?
Yes. I think -- it's a good estimate to assume that we will be doing at least INR 10,000 crores, INR 12,000 crores plus of order intake so we expect [ this same growth over the couple of quarters ].
So now how much more the remaining INR 4,000 crores to INR 6,000 crores that we are looking at, how much more are we expecting some HAM specifically?
Shravan Ji, it'd be very difficult to divide it between HAM higher on EPC or different from sectors because we have applied across, and we are bidding across different sectors. The probability of winning an order eventually when it comes, and that only we will define the order book, how it will look in at. But we have plunged across all the segments that we work in and also the move where this EPC will have in the fourth quarter as has been in the past.
Okay. Now on the margin front. So last time also, we indicated that the old projects because of that, we expect a lower margin. So this time, definitely 7% to 8% lower than the last quarter revenue despite higher execution. So just trying to further understand more. So how much left of the old projects? And do we see the same 7%, 8% kind of EBITDA margin in the second quarter and then coming back to the 13%, 14% that we are looking to get into second half?
Shravan Ji, it's very difficult to give you a quarter-on-quarter sort of indication of how the margin will look. What we had indicated last time for the whole year that we are looking at 12%, 13% EBITDA. And that is also primarily because of all the legacy orders that we mentioned in the past well that all of them incurring additional cost or land power equipment, which are not built in we are in the process of removing them. So that obviously will have because of that legacy issues where the margins are service on rate. But as the projects get done by the end of quarter 2 meet and we have new projects that we should see improvements in that quarter like. So we are expecting our current expectations. So we move yet have indicated last time as well of 12%, 13% of EBITDA.
But broadly now, it would be INR 400 crores, INR 500 crores orders should be left from the old projects?
[Foreign Language] from the 2018 [Foreign Language] for 2018. 2019 [Foreign Language]
Last one on the date front because that's the only concern. So this quarter also has increased from the March, INR 155 crores, INR 156 crores. So how do we see because that's the main, main concern because -- and the major is because of the inventory. So now our execution will also start picking up. So do we see the inventories in absolute terms. So ultimately, if inventory in absolute terms doesn't come down, do you see the debt level coming down by this year? And how much are you looking at debt level to come down by FY '23?
As you have mentioned earlier also that we will be producing debt by around INR 400 crores from the level of the FY '22, what we have told. So now there is an increase of around INR 150 crores. So definitely INR 150-plus -- around INR 400 crore to around INR 500 crores that we will be reducing by the year-end . As we will be earning the EBITDA margin in the range of 12% to 13%. So we will achieve that. As far as inventory days, you are taking in absolute terms, it will summed up [indiscernible] there now the accumulated prices are softening. So you see the decreasing the inventory level from the Q3 and Q4 onwards. However, still diesel prices are up, but still we will see that decrease in the inventory on the Q3 onwards.
Okay. And lastly, on the CapEx, we have some INR 10 crores. So in 9 months remaining, how much more you want to do a CapEx?
We can say to INR 10 crores to INR 20 crores. It is the actual CapEx is -- not on the not in the plant and machinery because [indiscernible] The other things loke office equipment or all those kind of things. So you will see the CapEx in the range of total in the portfolio in the range of [ INR 25 crore to INR 30 crore ].
[Operator Instructions] The next question is from the line of Mohit Kumar from DAM Capital.
My first question is that, sir, going to slide, I see the equity commitment required for this fiscal is INR 10 billion. INR 1,000 crore, is that number, is that saying right?
Yes, that number is correct.
Okay. Sir, secondly, sir how...
One thing just I would like to clarify here is that like this INR 1,000 crores of equity considering the appointed date of 5 HAM projects, which have been awarded towards -- during the fourth quarter of the last financial year and a few projects in the current financial year. So on those projects like once appointed at a concession agreement for signed and appointed dates are received, then only the requirement of equity may rise. So it's like -- the likelihood is that some portion of equity may be in the range of INR 150 crores to INR 200 crores may be spill over to the next financial year also.
And when do you expect the divestments proceeds, sir?
Divestment proceeds, like as we have also indicated in past like one is that [ subsiding ] of Cube deal in totality. So Cube transaction has -- as on date, if you see that it has certified in totality, 3 projects were to be transferred to Cube by this. One project we had transferred during the quarter . And remaining 2 quarters, the remaining 51% equity has also been transferred in the Q2, that is the second quarter. So Cube deal is complete and whatever was in the [ PAT ] consideration, that has also been received from Cube highway in totality. And secondly, then when we have the ongoing deal with the Shrem InvIT, where we have agreed to divest the portfolio of 10 assets to Shrem InvIT. So from Q2 onwards, the divestment to Shrem InvIT will also start. Meanwhile, against the unsecured loan portion, which was invested by Dilip Buildcon in the respective tenet to be divested to Shrem InvIT. Against that already part of retirement of the secured loan has taken place to Dilip Buildcon to the tune of approximately in excess of 500 -- more than INR 500 crores till date, near INR 617 crores for the total equity required.
Just money coming from the Canadian Pension Fund? Is that right, sir?
Yes, Canadian Pension Fund that line of credit is available to us to the extent of around [ INR 293-odd crores. ] So that depends. So as and when the requirement of equity is there, so we have an ability to draw down that money from Canadian Pension Fund.
Understood. How do you see the order book for any change in fiscal. Would we expect the 4,000, 5,000 bidding deal this year, given your talk to the NHAI?
We want the current pipeline? Is that what you're asking?
So my question is what is your expectation? Do you think that the NHAI will do 4,000, 5,000 kilometers bidding this fiscal?
Right, are saying 4,000, 5,000 kilometers of road will they award. Is that what you're saying?
Yes, sir.
We'll work far more than that. In fact, more...
What about NHAI? Sir, NHAI?
NHAI award put together will award upwards of 10,000 kilometers is what my [indiscernible].
And so do you think that they roll back the [ sounded ] COVID-related relaxation which we provided during the FY '20 and FY '21, do you think some of the provisions to be rolled back?
I mean I'm sure that the government will eventually look to roll back some of the relaxation that when they went over a period of time. How directly will they do it? And in what manner will they do it is anyone's guess. But of course, they will be looking at less rolling back to relaxation given for an extraordinary situation.
The next question is from the line of Jiten Rushi from Axis Capital.
Sir, what would be our holding in the Shrem InvIT in terms of percentage?
Sir, the holding in Shrem InvIT will increase over time as the product in getting dropped into it progressively that holding because our equity will keep on increasing as the project keep on to going. As you described the total deal what we go is about INR 23 crores, INR 50 crores of the equity and the [ units ] were about 1,700 or so. So that will be the holding in the unit that we will have what is the total InvIT, which is there in the public domain that's... so that is the...
So in percentage terms each holding will be worth 15% plus [indiscernible]?
[ 15% ] to 25% [Foreign Language]
Okay. Yes. And sir, on the irrigation project, so you can see that our irrigation projects are still not moving like the [ dam project ]. So what is stopping us from the execution like?
Sir, I could not hear your question.
On the litigation project, the dam project which is still not moving and also the [indiscernible] also is moving slow. So what is the reason why it is not peaking up in terms of execution?
[indiscernible] So you will see some progress and it will start [indiscernible]. [indiscernible] was actually older by the [indiscernible], now 3 years. So you will see the progress in the coming quarters. And as far as the [ the bridge ] is concerned, it has been actually progressed very during this quarter as order book. And it is going well. So there is no problem, but you are saying in the rainy season and this July to September, there is the slow progress, after the and the progress will pickup. But in the Q1 because there are a good progress in the [indiscernible].
Okay. So basically now it has started progressing well from Q1, that is what I understand it?
Right in Q1, yes, in the Q1 that [indiscernible] have done the progress would be there as a good progress in the...
And sir, on the mining front. So you said that the Pachwara mine, which we have subcontracted. So what kind of margin we can expect post the subcontracting margin in this project? Because obviously, this number will get, will come in our stand-alone revenue. We were supposed to do the mining work because you said that there is a limited equity, which will be invest like INR 50 crore-odds, but now we are doing subcontracting work. So this is going to be the space with [ Shrem ] also?
So Pachwara the margin, first question answer to your second question, margin in the same lane, we are heading within the range 16% to 18%, which we are heading. So we have supported a bit. As far as the [ army ] is concerned, we are still exploring that. So there is a ground got next 2 to 3 months. So you will see how it should go move on. So we will tell you when we analyze...
So basically, sir, Pachwara, you can still make 16% to 18% EBITDA margin and in total [ Shrem ] also if the subcontractor do we do. So if we do then, we will be getting more some 20% as margin and if you or subcontract the then 16, 18%? Is my understanding correct?
Sir, I think instead of breaking it into subcontracting or what -- or whether we're doing it on about -- our guidance for the margin for the mining projects in that similar range like...
16% to 18%.
16% is the guideline -- the guidance that we've given. The good part and part that we should be really focusing on is the [indiscernible] project to for a while, and we are happy to report that the progress on it is very nice. And once paying them all these players, we will see good progress and there will be [ coal exploration ] that we had on this project. Really, even for the [indiscernible] again, the hot news there as well is that coal production and all that learning will start in the financial year. So 2 very large projects [indiscernible] Siarmal, and Pachwara when they will operate at their full capacity came online. They are accounting for almost 1/10 of Coal India's current production. That is the kind of capacity that we will be delivering with the products that both these projects will be starting they'll be adding just a significant amount to the top line but also to the bottom line of the company. And the good part is this would be an like annuity kind of revenue, which will run. Pachwara is a 55-year contract and Siarmal is 25-year contract. So that is -- this is not just to be a revenue or not on the quarter on quarter line because it's also a directional strategy for the company, where our idea was not only are we doing short term projects, but we are also engaging in long-term project...
Sir, this Pachwara will have a revenue i.e. INR 5 crore booking every year? And what will be the revenue booking every year from Siarmal?
Because Pachwara the other 7 million metric ton [ miles ] as of now. So it will be more than that the revenue that we get in that on a full year when we get a full year. Siarmal and when it finally reaches its 50 million metric tons for number, last time, around INR 1,500 crores of revenue is where we are expecting from Siarmal. And because it increase that... so that would be...
Got it. And sir, on the bookkeeping front, can you just give us the mobilizing advance and yield revenue retention money as on June?
Retention money is around INR 700 as effective June. Mobilization around INR 900 crore and unbilled revenue at INR 1,300 crore.
[Operator Instructions] The next question is from the line of Prem Khurana from Anand Rathi.
Actually, I think my line got dropped, I'm not sure some of these questions have already been answered, if you could help me with the revenue guidance for the year also, I mean, what is the EBITDA margin that we're targeting now for the full year entire year?
The revenue guidance we mentioned is the same as we had mentioned earlier, around INR 10,000 as top line and the EBITDA guidance also, as we have mentioned earlier in the last quarter will be in the range of 12% to 13%.
So I imagine this 12% to 13% would still have some impact from some of these legacy orders in FY '18, '19 orders, right?
We discussed that in detail already.
Sure. Sure. So just to understand, I mean, I understand because you are able to do what the margin that you are able to do. But then how about the new orders, I mean, the INR 6,000 crores of new orders that you managed during the year. What kind of margin would be orders in tail? I mean is it that because of competitive intensity, there has been some moderation? Or you still are able to kind of manage 16% to 18% of the margins that you used to manage yes?
So obviously, in a high competitor intensity, margins do take a benefit along with that, the fact that the inclusion has denied. So I like to give you an example to give you some facts. Last year, we bid for more than 100 project, 100 or 500, 600 projects, and we won only 6 out of those. So the competitor density was pretty high and that [indiscernible] in the industry. However, these projects, we are expecting a margin of 15%, 16% depending the one that we want, even right now. We are expecting margins to be in that range. Depending on adequate that may come. We can see how the margins may improve further. If inflation cool down and while the execution eventually remains. But as of now, we will be around that 2 numbers.
Sure. And on sir, deleveraging part, I think you're looking at around INR 500-odd crores of delevering from our Q1 number. And at the same time, we have this INR 1,000-odd crores of equity requirement including expected appointed date of 5 of these new hybrid annuities. So eventually, you're looking to generate almost INR 1,500-odd crores, you have number from the business over the next 9-odd months. So if you could just help us understand, I mean -- does it mean we expecting business to a seriously good amount of money you're expecting and the working capital to get released in a big way? Or how do we intend to kind of fund this entire INR 1,500 crores? Because as I look at, I mean, asset monetization, what we would be able to get in H2 is there's INR 100-odd crores spending from Shrem or about INR 615-odd and [indiscernible] would be another 100-odd right? So there's only around 200 odds, which is supposed to come assets even when you would need 1,300 from the business which seems to be a task given the fact that the margins still is still at around 10, 12-odd kind of number?
So beside the margins that the business is in, the asset sales that we've done, the 13 assets that we have down in total, 3 to 2 and 10 to [indiscernible]. There, we have -- we're making a profit of almost INR 9,000 crores on the equity that we've invested. So because of that, there is -- to what you have calculated generally the cash out, we are also getting units from the InvIT which is about INR 1,700 crores, INR 1,800 crores of units out so that the company will be receiving. So there will be monetization of those [indiscernible] will help us invest in that equity into the new budgets and also splitting and also reducing debt.
Sure. So does it mean that you're planning to sell these units in this year except. And if that is the case, why did we not go for an entire cash transaction with Shrem?
So there were 2, 3 current reasons for that. Like for example, going in an all cash transaction, your interest rates and everything we already would have been frozen because of the increase in interest rates right now to about 140 basis points. I think to my knowledge about INR 200-plus crores of valuation and already increased in -- for our units. So what we would be getting now, we have already increased that much. [indiscernible] it only pure cash, that would be a loss of INR 200 crores. Number two, there is a taxation sort of implication when you sell the capital again tax that would come. And you have taken it into units and -- so there is a huge long range of car I can go point on point why we have chosen this.
Probably, I'll take it offline.
There, like I said, the 2 major reasons there's already been an increase in valuation by more than INR 200 crores million to my knowledge or what I expect RBI to raise interest rates for this year. So I think base rate would come around 6% by the end of this time and by the end of this calendar year time, given the pressures of central banks around the world.
And do you see this large market for the kind of volume that you intend to sell, I mean, in terms of annuity on it?
So the good part is this is now a very well accepted currency even if -- when we had to, we thought we will raise funds against these units in terms of if we have to raise that or whatever because there is much more value in retaining these units and the cash flow that comes from it on a regular basis. And that was the ideology when we entered into this transaction.
But yes, there is also a robust market and the InvIT and the REIT platform is only getting more and more interest from both foreign and domestic players. So once we pressing it, we do see a market for not just sales, but we also see a very robust market for even putting these unit have collateral and raising capital against that.
[Operator Instructions] The next question is from the line of Shravan Shah from Dolat Capital.
Sir, what's the DBL infra date, last time it was INR 700-odd crores. Is it the same number?
Yes, it is the same number, Shravan.
Okay. So still we can raise further another INR 200 crores, INR 300-odd crores from that?
Yes, yes. Correct.
Okay. Second is, just trying to further understand in terms of the InvIT that you are saying that you are particularly is still not able to clearly understand. One aspect I understood that we've got the higher valuation and capital gain tax. That's why we went for the InvIT, but still not clear in terms of how much are we planning to sell and do we see that can be done before March? So that ultimately, the previous participant, what I asked the question is in the base reduction, how much cash that further we can receive from now?
Shravan, let me answer your question. See, we have multiple sources of funds that are going to be connected to the company to lead the overall equity requirement, including the raising of funds against the InvIT, okay? So the InvIT units are going to come to a progressively starting from Q2 onwards.
And on these basis, we'll define how much -- what is the quantum of fund that is required and as [indiscernible], this is well accepted basically instrument in the market against which the funding can happen, either we can save the units or we can sale the units. Idea is that while we retain the InvIT. There is a good potential of having the future of sales over the years and because we are into the rising interest rates trend. And considering this always InvIT is back by a portfolio from asset if there is an interest rate is in the rising scenario. Then there is a positive cash approval, which comes to the InvIT in terms of upstreaming of the available cash flow. So all these benefits are likely to accrue to also to unit holder. And while we are holding the units, then we may also tax advantage in the dividend distribution from these [indiscernible] dividends in the hands of the units holders will be tax-free. So all these advantages are there guiding the reason we have chosen in this rather than going for a bilateral phase typically on the sale of whatever is the bank rate, as per that bank rate, the [indiscernible] or evaluation get further.
Okay. Okay. And the equity investments that we have given on the presentation on Slide 22. So that does not include the latest 3 HAM project that we received?
It includes all the HAM projects that we have received. So that is what I'm saying, the concession agreement for these HAM projects are yet to be signed. So post that, another 150 days to the financial closure. So there is a possibility that part of the equity from [ INR 1,000 crores ] the range of INR 150 crore to INR 200 crores, that get spilled over to the next financial.
Okay. And broadly, for the full year on INR 10,000 crores revenue in terms of this quarter, we have INR 100 crores kind of a negative CFO, cash flow from operations. So for the full year, how do we see? So just trying to ultimately, I'm trying to just figure it out how much cash we can get it will help us to reduce the debt?
It was just INR 40 crores, it was up INR 100 crores. And also like as of now it is very difficult to give you a guidance for the coming person. But overall, it will have a positive implication. That is how we have planned for our debt reduction of INR 500 crores by the end of financial year.
The next question is from the line of Mohit Kumar from DAM Capital.
Sir, my question is, given our cash flow projection and the requirement for the PD for under HAM project, do you have any more appetite to take HAM projects in near term?
Sir, like we mentioned, the equity commitment that you are seeing right now are -- is a resilient estimate of when the projects were started accordingly. There is a likelihood, good likelihood. So INR 150 crores, INR 200 crores of equity like not from this year to tilt to next year. Now that is the first part. Second part, you do we have that appetite. Now if we win any projects for now or even not bidding right now [indiscernible] October, September, November, any HAM project definitely you look at historically, it will takes about 9 to 12 months to begin from the date of bidding. So even if win it then any equity commitment that will come, will come in the second half of next year. That is the best case estimate I am saying So that should not be a problem. Our monetization of assets already that has been committed, along with the new assets, which will be a high stage, that will also be sort of getting that. So I don't see that as an impediment.
Understood. I think as the media reports. The government is considering to reducing the government support for HAM from 40% to 20%. Do you think this will help the larger players?
Yes, approach. I mean I don't know what you want me to come up on the media reports because we also.
No, no, no. I was asking in your opinion if 40 become as the...
Yes, I think it's unlikely that in the near term, they will change it from 40%. That is my personal opinion because it is a larger decision, and I don't think it will happen that soon. Even if it will have a more progressive manner, it will happen, maybe in next financial year, they will think all going something but not in the near term.
40 becomes 20 should help the larger players. Am I right in saying that?
Sir, we are talking about a sectional situation, which is -- which we don't know whether it will happen or not. But obviously, there is a reduction in the government support of any projects. That will obviously reduce not for just the larger players for any player, it will increase equity outflow, and it does not -- it is equal for larger or smaller and any size players. Equity infusion will be the same on the same basis of a financial model. So it impacts all the players in the industry, which is why I'm saying, I don't think so that change will happen anytime soon. That is not in the financial year.
Ladies and gentlemen, this was the last question for today. I will now hand the conference over to Mr. Jiten Rushi for closing comments.
Sir, just one last thing. Sir, do we have a [indiscernible] agreement for future assets?
Yes, Jiten ji, we do have understanding for future assets which [indiscernible].
Okay. Thank you, sir. Thanks for giving this opportunity. Thank you, everyone, for participating. Happy Independence Day. And sir, any last comments from your side?
Thank you, everyone, for being on the call and for asking all the questions. As always, if anybody has any more questions, please feel free to reach out to our team, and we'll be more than happy to address any and all of your queries. Just wishing everyone a very Happy independence Day in advance, 75th year of independence. And yes, wishing a nice happy long weekend for everyone. I would and look forward and report and seeing you next quarter.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.