Power Grid Corporation of India Ltd
NSE:POWERGRID
Power Grid Corporation of India Ltd
NSE:POWERGRID
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Greetings, everyone. I am Harsh Dole, industry analyst at IIFL. On behalf of IIFL Securities, I welcome you all to the First Quarter FY '23 Earnings Call of Power Grid. To discuss the meeting and share outlook for the company, today, we have the entire senior management team of Power Grid. It's my privilege to introduce them to you. First, Shri K. Sreekant, Chairman and Managing Director; followed by Dr. V.K. Singh, Director Personnel; and Mr. Abhay Choudhary, Director of Projects.
I request the management to take us through the key details subsequent to which the floor will be open for Q&A.
Over to you, sir. Thank you.
Thank you, Harsh. Very good morning to everyone. I will now start a brief presentation on the Q1 performance of Power Grid.
I hope this is visible.
Yes, sir, it's very visible. Thank you.
Thank you. Yes. So a very brief overview of Power Grid. We are Maharatna CPSE, third largest in terms of gross block. Our aggregate assets are 1,72,662 circuit kilometers and 267 substations. About 85% of the interregional transfer capacity is owned by Power Grid. That's about 97,290 megawatts.
Next. This quarter, we have done CapEx of INR 1,482 crores on a consolidated basis and capitalized assets of INR 1,345 crores. Our annual target this year is INR 8,000 crores.
We are pleased to inform that Bhuj-II substation and [ lines set at Bhuj ] which have been completed. We have also added transformation capacity at Bhadla and Fatehgarh to facilitate the evacuation of renewable energy.
And coming to operational performance. This year, the availability of [ impacting ] at 99.79% of quarter 1, marginally above 99.77% achieved last year. As you are aware, we have incentive capped at 99.75%. So we are above that threshold. The tripping per line have also slightly better at 0.12 per line.
Financial performance with the disclosed numbers, our declared numbers show a reduction in the PAT from INR 6,085 crores to INR 3,766 crores this year, stand-alone or on a consolidated from INR 5,998 compared to INR 3,801.
I would like to bring to your notice that you would have already seen, that last year, first quarter, we had this profit on account of monetization of 5G BSF, and that is the reason if we adjust for that, we see the profit growth from INR 3,341 crores to INR 3,801 crores on a consolidated basis. The revenue growth has been about 11% from INR 10,392 to INR 11,169 on a consolidated basis.
Some of the numbers on a Q4 to Q1. Again, there has been monetization of a couple of cash flows in the last quarter, which has given about INR 600 crores of exceptional item, the profits on account of such monetization. If we adjust for these kind of one-off items, we see a marginal growth between Q4 in last year and the Q1 of current year.
These are numbers on a consolidated basis. I won't go over all these details. Yes. So the gross fixed assets on a consolidated basis are about 2 lakhs 62 [ crores ]. Net worth is about INR 80,000 crores. We have -- debt equity is at 62:38 on account of paring down of the debt due to repayments as per schedule.
Some of the numbers you are normally invested in. We have put them in [ first of all, ordered ] them into this. I think it's significant, I just want to bring to your attention that this year, the first quarter CSR has been significant. We made a contribution of, I think INR 75 crores to the PM CARES Fund. So that is the reason this has gone up in this quarter.
But average asking rate for CSR would be about INR 75 crores to INR 80 crores per quarter. Incentive, as you see on a consolidated basis, we received INR 149 crores, reflecting the full availability up to the ceiling we have received there.
Telecom, the income has been INR 166 crores. It is at par with what we used to get in the past. We are targeting to take this up to around INR 200 crores to INR 250 crores per quarter in '22, '23. And we have increased the availability of our OPGW through agreements with MSPCL and DVC. And we are also partnering with domestic and international clients for telecom services.
Consultancy income has improved significantly to INR 211 crores on the back of a couple of projects we are doing for the government of India in the Northeast. And also few new assignments, which we have received from Nepal and in other payments.
Commercial Performance has been good, except for --if I say Jammu & Kashmir, Tamil Nadu and a couple of states. Then you are aware that the government of India has [ mandated ] debt payments such as rules, which provided for kind of installment payments, the dues outstanding as on June 3. If the customers provide the payment security mechanism and also pay the dues, outstanding dues on time.
So there is a mechanism following the withdrawal of the CERC regulations on regulation of power. The government of India has notified these rules. These rules also provide for regulation of power. If there is no payment security mechanism or if there is a default in payment of outstanding dues.
This has been accepted by 6 DISCOMs: Jammu & Kashmir, Tamil Nadu, Uttar Pradesh, [ Darbhanga ], Madhya Pradesh and one more. We have settled about INR 2,000 crores of dues as of June 3 under this scheme, primarily from Jammu & Kashmir, Tamil Nadu and Uttar Pradesh.
A couple of transmission projects under TBCB have been acquired. That is Khetri Narela Transmission under [ revised ] and Mohanlalganj Transmission under the intrastate [ transmission system ].
We have also signed a transmission agreement with Reliance Industries, which is a bulk consumer. It will be a dedicated line built for the trains Jamnagar plant from ISTS Jam Khambaliya pooling station to their Jamnagar facilities. This line will be owned by the Power Grid Corporation and tariff will be recovered from the reliance as per the CERC regulation. So this is the first such arrangement, and we are looking at such opportunities with others as well.
Other related businesses, smart metering. There has been some [ momentum ] in this. We have signed [ an MoU with MGVCL & UGVCL, Gujarat ] about 66 lakh meters and with scope for further addition. So we have already started the tendering process. And hopefully, by the end of the year, we should see the first meters on.
Solar generation is another area. A couple of issues here. One, we have to progressively go towards net zero. And whatever auxiliary power consumption we do, we want to procure it from the renewable sources.
And also, we want to exploit whatever spare land we have at our substations and generate solar power. So in that direction, the first site we have is at Nagda, which has been acquired long back and is now vacant. We are going to set up an 85-megawatt solar power plant at Nagda. the feasibility studies have been completed, and we will be starting the tendering shortly.
The total works in hand are about 52,000 [ crore, ongoing are ] 8,200. TBCB, 15,800. This year, as I mentioned, we have a target of INR 8,000 crores of CapEx.
Now briefly on the ISTS expansion plan and all, I think a couple of trends which we are seeing are, one, energy security and then the other is sustainability. These are the key trends we see and particularly in our context, following the commitments of India at the COP26. Now there is a lot of activity towards achieving this target of 500 gigawatts of nonfossil capacity. And a lot of that will be from renewable sources and significant is on account of solar parks and large-scale renewable capacities, so which require transmission.
In addition, there is also a lot of investment proposed in the storage also. So the activities have started in this direction, and we will see the -- on the ground in a very short period tenders and other things to take place. A lot of communication is going on between the center and the states towards achieving these targets and because there is also the acceptance that the journey towards renewable power is inevitable. It has to be embraced, all the enabling policies and other -- whatever facilitation is required, that the government is committed to do. And therefore, there is a significant amount of [ investment ] in that direction.
Finally, a couple of awards and accolades, which we have received in this quarter. POWERGRID, a Great Place to Work among the best companies and only PSU in this list.
We have also received an award for his year for the CSR initiative for improving rural livelihoods and protecting environment through our Integrated Watershed Management Program, recognized among the Dun & Bradstreet top companies in the power generation and distribution sector.
So thank you very much. I stop here and be happy to take questions.
Thank you, sir. Nikhil, can we please open for Q&A?
You are the host now, sir. You can start the Q&A.
[Operator Instructions]
So the first question is from Mohit Kumar.
My first question on the smart metering here. Is it based on TOTEX or CapEx move? And secondly, how does the pricing gets decided?
Yes. Thank you. The smart metering is on [ PV ] foot model, where we will be doing the investment. The implementation period is 2.5 years. And after that, 7.5 years will be the operation and maintenance period. We will be receiving monthly rentals. The pricing will be decided after the -- our bids are invited from the meter manufacturers and system providers. On that basis, on a kind of a cost plus, it will be going.
There are some guidelines of the government regarding the WAC to be considered and other broad principles. But once we get the bids from our vendors, we will be in a position to make our model and offer it to Gujarat or any other state.
Secondly, on this national monetization pipeline, we maintain that far that we can monetize roughly INR 25 billion in the second half? Or is there any hurdle which is coming up in the monetization? Because we haven't heard anything significant in last past 4, 5 months.
Last year, we had a target which we have achieved above. We have, under the NMP INR 7,500 crores in '21, '22 and '22, '23 each year.
Last year, we did nearly INR 8,300 crores. So this year, we plan to do INR 6,600 crores. There have been a few clarifications, which were to see. We saw it from the ministry, those are all in place. So now we are going ahead with appointing the councils, the transaction adviser and so on. And you should see action in the third and fourth quarters of the current financial.
We plan to raise about INR 6,600 crores under the NMP this year.
Lastly, on the [indiscernible] pipeline? [indiscernible]
Which one?
HVDC order. HDVC pipeline, has the work started? When do you expect?
No, that has not yet started. We are doing the studies as of now.
The next question is from Aniket Mittal.
Yes.
Harsh, you can also mention the institution. Yes. Thanks.
Aniket Mittal I think is from Motilal Oswal Fund. Aniket?
A few questions. So firstly, if you could provide some insight on what is the current awarding pipeline for TBCB projects in the country? And how do you see that panning out over the next 12 to 18 months?
Okay. See, there is a strong pipeline. There has been significant change in the transmission planning [ patient ] and the -- so one is that the transmission planning is captive to the scheme approved by the RPCs or so. It has to go ahead of generation. And it is based on now the GSM system where the drawing entities have the right to draw from any part of the -- any generator allocated in any part of the country. And so it is expected to increase the ease of implementation of ISTS ahead of the generation. And the current pipeline we are seeing, many other schemes in Rajasthan are expected. Pram?
We are also having kind of about 1,30,000, which is the target for the interest rate transmission up to 47 and schemes of about INR 25,000 crores are expected to be either ongoing or in the next 3, 4 months that are expected to be put down to bid.
The next question that I had was actually on the issue of the great Indian bustard. And this is more to understand from your role as a CTU as well. If you could give some context, both, let's say, at the system level as well as the Power Grid level, what are the quantum of projects like are being impacted because of this?
And secondly, has there been any resolution now towards this issue?
First of all, [ our grid ] is not the CTU. CTU is our subsidiary, right? As now, I mean that's just an aside. But as far as this GIB issue is concerned, there is a committee constituted by the Supreme Court, which has been mandated to look into individual projects for laying overhead lines in the priority as well as the potential areas and give clearance. We had 3 projects, which were having lines in the potential area. We got the clearance for 2 projects as it is. In the case of 1 project, we were asked to make some diversion in the line. And subject to that, we got the clearance.
So all our projects, which were pending before this committee for clearance have since been cleared. It has taken some time for them to formulate, to understand the issue and then kind of appreciate our viewpoint and give the clearance, but we have nonetheless got the clearances. Looking forward, whatever new schemes, which are likely to come in the Fatehgarh and Bhadla area are likely to be impacted by this. But I think when we do the bidding, we have to factor in for some time for this also, to take approval of this committee.
The other question you had was about I think -- future, what is the impact. None of our current projects are in that area. So we had 3 projects, all of them we got the clearances.
Going forward, as I mentioned, if somebody is looking for capacity or transmission in an area, a potential area, then there can be an issue, particularly in a certain strip of potential area, which has been considered as of higher importance by this committee. So they want to award that route, though it is not a part of the priority area, nor is it part of any notified area as such. But the have identified that strip as something which is where -- which is of importance to the GIP. So they said that you award that and take the alignment.
Have I answered your question?
I just -- so just to follow-up on this. Just to understand, is that issue now settled by the committee? I mean has the committee come out and laid out clear words as to how someone can go and do this? And is there any rework in the existing transmission scheme that needs to be done for it?
I'm not sure that they have set out any such framework in the public domain. As far as existing lines are [ concerned ], everyone is supposed to put the board diverters. That is one aspect. Now how many board diverters and at what distance, around what conductors, that is still under debate with the CEA.
As far as -- we understand from our experience of 3 cases, they are -- they have given us clearance for our 765 kV line as well as 400 kV lines because there is no alternative in terms of undergrounding these lines. Only thing we observed was that in one case, they wanted a certain diversion in the route, a retail away from the priority area.
And just one last question. So this is pertaining to actually a media article that had come out and highlighted the fact that the Ministry of Power is considering the Power Grid may acquire a stake in PFC. So just wanted your thoughts on that. And has there been any discussion with the Ministry on the same?
So this is not PFC. I think the news article perhaps...
Sorry, policies, policies.
There is no so formal communication or discussion on this.
So there's a question in chat box that comes from Deepika Mundra. I'll just read it to you. On the ISTS plan, does it include Green Energy Corridors?
Second, in terms of interstate capacity, it implies just 2% CAGR. Is more investment required for renewable genco at the interstate level or the intrastate level?
See, there is -- I mean this Green Energy Corridor is only a name or a particular scheme of the government. And that was like initially, it had 2 components, an intrastate component and an interstate component. The interstate component was from Bhuj [indiscernible], Kasmir, Bikaner, Moga. That one was given to Power Grid for implementation. We have done and completed it somewhere around 2018 or so.
As far as the intrastate component is concerned in the Green Energy Corridor Phase 1, some of the states are still implementing it. And I think that is an ongoing program.
And second, another Green Energy Corridor Phase 2 has been sanctioned. That is primarily in the intrastate segment again. That is being implemented by the state utilities. So whatever we are doing, for example, in Bhadla or Rajasthan or Gujarat or Tamil Nadu. A lot of the transmission which is being developed in the industrial segment is per the green energy only renewables. We are hardly building any lines for new coal capacity or new gas capacity. Almost all the intrastate, which will be built in the times to come, will be predominantly for green energy. Though they are not called Green Energy Corridors under any particulars.
As far as investment in the -- by the gencos are concerned. Now I think under the GNU regime, the requirement for the gencos to invest in transmission will be much lesser. Only from their point to the pooling station, that is the investment which will be required. There will be significant augmentation of the network as systems building or for the purpose of network expansion, which will be under the ISTS.
Interregional connections also will be part of the ISTS. As far as intrastate is concerned, that is again a matter to be bid out and decided by the SDUs and the state utilities like UP is doing, MP is doing. So others are building on their own. Some of the utilities feel they have enough capacity in the next.
So they are not leaving it to the generators to do such augmentation. That is my understanding.
We'll take the next question from Rahul Modi.
Sir, just a couple of questions. Sir, one, the slide -- one of the slides mentioned the CapEx of around INR 1.25 lakh crores over the next 5 years up to FY '27. So just wanted to put this in context, for example, whether the Leh-Ladakh line is a part of this CapEx?
And secondly, sir -- because that states INR 27,000, INR 28,000 crores for this year, for example, versus our target of [ INR 8,000 ]. Is there a mismatch only in terms of time lines of what we are expecting in terms of progress of -- how do we read the 2 numbers?
This INR 1.25 is the entire system as planned by the CT. So this is a kind of a potential for the entire sector. Of that, a part will be bid out and won by Power Grid. The Leh-Ladakh system you are mentioning is also included in this.
The immediate number, which we see on the ground for the current year is INR 8,000 crores. That is watched. Though we will try to better that, but that is the immediate. So maybe going forward, next year, when this bid out projects are there, we'll have more visibility of CapEx.
Sure. Sir, is my interpretation correct that if we remove the Leh-Ladakh and the Gujarat line from here, so another INR 90,000-plus crore kind of an opportunity still. Is there as per this plan in terms of bidding coming up over the next 5 years?
Yes.
Okay, that's very helpful. Sir, any opportunities in the intrastate that you've seen? Because we've seen the RDS's scheme and other announcements recently made in the sector. Do you see any opportunities or an increase in the CapEx by the states on this, and which is an opportunity for us?
The RDS is predominantly being funded by the grant and central government, assistance from the central sector financial, power finance institutions. So investment opportunities are not going to be there. What we see is opportunity for consultancy work like we have recently been in talks with one of the states. They want to give us project implementation job for about INR 1,000 crores plus kind of works. So those will be more project management and consultancy works.
Sure. And sir, any intrastate opportunity over the next 3 years?
Intrastate, there is -- again, we are seeing opportunities in UP, in Madhya Pradesh. These are the 2 states which have seen this.
And we are also in discussions in one of the states but a joint venture, one of the states for a joint venture. We had previously discussed but somewhere it got into a sideline. But again, we are hopeful that it will get revived. And we get that joint venture up and running to strengthen the intrastate network and also get invested into the 66 kV infrastructure.
So it's very -- again, a very preliminary stage, it is. So I think once we make a little bit more progress, I'll be happy to share that it is.
Sure. And just last question from my side is on the smart metering that you mentioned, the 60 lakh -- 66 lakh meters have been signed for with Gujarat.
Sir, any time lines? Because obviously, sir, the overall execution on this front has been delayed, not from mine but from a system point of view. So do you see now things moving ahead faster?
Yes. So we have signed an MoU with Gujarat. So the common shares, of course, will have to be frozen once we get our bids. Then we have to come to an understanding about the rate and all.
The time lines are December '23, I think 10 crore meters is the targets of the government. But I think we will have once we sign a formal agreement, 30 months to implement this. So we are targeting this in the next 2.5 years.
The next question is from Bernie Garbia.
[Technical Difficulty]
The next question is from Apoorva Bahadur.
On the CTU plan, which you had shared. Just wanted to know that -- does it include the entire transmission required for 500 gigawatts of nonfossil fuel capacity target? Or is that beyond this as well?
No, this does not take us to 500 gigawatts because 500 gigawatts is 2030 target. So this is up to '27. So I think there will be another -- next version will have more clarity on the schemes, which will be required for the 500 gigawatt. One committee has been found by the ministry to look at the transmission requirements. So a plan has been drawn and it is still under work in progress. Based on the potential, identify the different transmission schemes are being planned to facilitate the evacuation of these 500 gigawatts of non-fossil.
So as I mentioned, significant activities are going on towards this target of 500 gigawatt.
Okay. Sir, can you share how much does this factor as planned?
I think it is about half of that. I think it will take us to around 400, 450 gigawatts --350 gigawatts, the funding -- 350 gigawatts.
Okay. Great. Sir, also secondly, on the smart metering front. A channel [ analyst ] suggested that DISCOMs are taking a lot of time starting to implement this scheme. So are you also facing this? Because I believe that you included the tender sometime in March and have not been closed yet.
There are a few reasons why it was not closed. One, I think, some changes to the SPV. That is one. Second, it is a large tender. So there have been many suggestions from the industry. So that is another reason. But we are now going to close it by the month end, August 22 or so. This month, we will definitely close and open on the bids. We are able to come to an understanding with one of the best DISCOMs in the country, in Gujarat. So we expect to implement this scheme with greater pace in Gujarat. Where we are seeing resistance, for example, in UP or Bihar, there is certain amount of resistance to installation of these meters. That is the reason that there is a delay in implementation. There's a lot of teething issues in terms of onboarding meters or in terms of communication systems.
So with that experience, which we have seen through joint venture, ESL, we are planning to improve the systems for implementation in Gujarat.
Okay. So on business model over here. If I believe initially, we had to install through the PND, the CPSU or the government, central government location within the state. So are we going ahead with that? Or is it for the entire distribution area where we'll be installing?
This is for the entire distribution area or the most [indiscernible]. 2 Gujarat DISCOMs have given us this band rates, so to say. So we will be implementing in the entire command area.
Okay. Fair enough. Sir, last question from my side, and this is on the transmission capacity requirement for new thermal capacities. So we are beginning to see, sir, a couple of companies, larger companies are announcing planned capacity additions or brownfield expansions. Do you see any chatter from them on the transmission side or new lines required for those?
I think these will go more towards the city, but no, not yet, not yet.
So next is Bernie.
[Technical Difficulty]
We'll take the next one from Anuj Upadhyay.
This is Anuj Upadhyay from HDFC Securities. Sir, this is regarding the project we are constructing for Reliance Industries. Could you mention about the size of the product? I mean, quantify what's the size of this project?
And also you mentioned in your initial remarks that we are exploring similar opportunity with other players as well. So could you quantify how big the overall opportunity could be?
I'll just let you know. See, this is, I think, part of their work to [ pure green path ]. So it's a transmission line between [indiscernible] and their facilities. They work out about 1,000 megawatt.
I think -- I'll just get you the...
It's about 250 crores.
It's about INR 250 crores, INR 260 crores. They go up slightly. There is a [ conduction competing change ]. So it may go up slightly.
Okay. And on the size, sir we have like opportunity type. We are in discussion or we are looking out for a similar kind of arrangement with other private players to spend. So how big the opportunity this could be?
A similar opportunity. I mean, of course, it will again be a function of the individual industry and the nearest pooling station. We are in talks, but size or the kind of sub-cuts required, those are not yet frozen.
Okay. Okay. And the tariff would be based on a [ flat sort of ] cost-plus by CRC?
Yes, it will be based on the CRC system.
Fair point, sir. Sir, secondly, on the [ Carra ] project. So we have already seen that the first phase has been tendered out and run by a private player. Any time line, when can we expect the second phase to be tendered out?
I think the second phase will come -- is that part of our next 1 year scheme? I think by the end of this year, we should get this.
Mostly, now the next are in the Rajasthan area, but [ Carra ] is also there, maybe by September, we should be seeing.
Next, we have Dhruv Muchhal from HDFC Mutual.
Sir, you mentioned that this INR 1.25 lakh crore plan till FY '27 will take us to 350 gigawatt of renewable. So we currently are about 100-odd. So that's about 250 additional for INR 1.3 lakh crores. So that seems relatively small because we are adding almost equivalent capacity of India in the next 5 years in terms of renewable. I mean what this can cater to? And the transformation investment is only 1.2, 1.3.
I think today, we are about 167-or-so in renewables, right? Not -- when you count it, you count hydro also. This system -- so we are at around 160, 80 is under construction.
So this will be, say, for about 100, 125 gigawatts of additional RE.
Okay. So the correct way to understand this is 400 gigawatt, this is 1.3.
And roughly take INR 1 crore per gig -- I mean megawatt kind of a number for transmission.
And sir, second thing is, if you can help us with the prior period sales this quarter and the interest from beneficiaries this quarter?
They are already announced. Let me just tell you the number.
So prior period, I get from the -- I noticed is INR 350 crores.
Yes, it is there, no? [ 200 ] [indiscernible]?
The interest from beneficiaries, not from subsidiary entities. Interest will come from beneficiaries.
Interest from beneficiaries, that is part of the other operational income. Our surcharge income is INR 97 crores in the current. INR 140 crores.
Interest from beneficiaries?
Yes, differential tariffs.
And the prior period is? INR 350?
Prior period sale consequent of final order, INR 351 crores.
Next question is from Vishal [ Sahara ].
My question was again on that REC stake. Our management did clarify that no formal communication has come till now. But if such an offer were to come, will Power Grid consider it? Considering it may be a bit unrelated to the core business and at a time where core transmission CapEx pipeline itself is looking strong, you may pass it and reject this end. So what are your thoughts on this end?
I don't know. What do you mean we consider it. We will evaluate it, for sure, okay? And if the government were to make such an offer, we have to evaluate it and then we have to respond. And when we do that, we will see what is in the interest of all the stakeholders.
Next, we have a question from Sumit Kishore.
Two questions from my side. First is that on the TBCB projects that you have [ won -- saved ] since January, February of last year, what would you say at a portfolio level is the equity IRR for those projects? My understanding is that with the proliferation of InvITs, I know integrated was already there. You have launched on InvIT and the state's amount of projects that are available and possibly the equity IRR for new projects is coming down. Your comments, please.
It is a fact, it is coming down. I don't see that the function of the InvITs, but it is because of the competition. The competition in the transmission business has intensified. Many new players are coming. So I think the market is right now in a state of churn. So until the new business models are established, it is difficult to say because it takes about 2 years to construct, and then thereafter, maintenance of this line for 35 years is critical.
I think it is the advent of smaller players, smaller projects which are being offered. These are 2 reasons this intensity in the competition and the returns have significantly come down.
Do you say they have come down significantly?
Sorry, I can't hear you.
[indiscernible] to assume it is 11%.
Sorry, I'm not able to hear you. Can you please repeat your question?
So would it be appropriate to assume -- am I audible now?
It is breaking actually.
Am I audible?
Yes. Please speak.
Yes. So I was saying I think that PST equity are [indiscernible].
Sorry, at the critical moments, your voice is breaking. Maybe you can put it in the chat box. Harsh can read it out.
So I will take a couple of questions from chat box, which we missed out earlier. This question is from Deepika Mundra again..
What is the risk on IRRs due to potential project cost increases on TBCB projects, which are indeed on the fixed price basis?
There are no records due to increase in project cost under the TBC regime unless it is either due to change in law or some kind of [indiscernible]. But we used to have a back-to-back fixed price contracting with the EPC contractors to protect ourselves from the price increases. But of late due to the significant movement in the commodity prices, the EPC contractors are also not willing to offer firm prices. So to some extent, we are required now to take the risk of project cost increases. And there is no fallback on that to the customer because under the current regime, there is no variability in the tariffs due to any of these reasons.
The next one is actually from Abhishek Puri, again from the chat box.
His question is, are we maintaining our asset capitalization guidance of INR 10,000 crores each for FY '23 and '24.
This year, as I mentioned, we will be seeing CapEx of INR 8,000 crores plus and capitalization in the range of INR 11,000 crores plus. So capitalization means the assets which we are expected to be commissioned in this year.
The next question is from [ Nicola Bunker ]. Any plans on buyback as discussed earlier?
I don't know if I can discuss it on this call. We will evaluate that asset.
I think Sumit has this question basically is the equity IRR [ in the ] amount 11 to 12%?
Yes, that is the target.
Sure. And his third question is, if we add the proposed CapEx of Power Grid plus Adani Transmission and [ Steleg ] Transmission in ISTS, it gets no where close to 277 billion number. So is the CTU overstated for the current fiscal?
CTU is kind of giving numbers, which I think -- these are estimates and estimates of what they are likely to achieve. But then this will include some of the projects which are already in progress and which we will be parting afresh. So I think again, there is a function of how much has been announced to be bid out. Some of the projects got delayed on account of GIP. So I think this plan when it was made few months back, I don't think it factored some of these. So this is the kind of -- we can take it as more like a guidance. Rather than look at it each year by year, we should look at it as a kind of guidance for the next 4, 5 years.
Sure. Thank you once try line [indiscernible].
Yes. Great. Apologies. I had to reset the setting. So I just wanted to know the value of the recently floated TBCB projects by REC. This called Phase 1 and the ISTS expansion scheme in the Western and the Southern region.
These are, as I mentioned about -- actually something like INR 4,000 crores.
Okay, [ I'm now filling in ] INR 4,000 crores. The next one, sir?
Rajasthan is slightly more. Maybe around INR 8,000 crores, INR 9,000.
Okay. So that's total of about INR 13,000. So when you say about 25,000 in the near term, this includes the INR 13,000 crores or it's?
Yes, it includes.
It includes. Okay. Okay. So the remaining INR 7,000 would be probably covered in Phase 2 and other products?
Something in the Southern region, then Jammu & Kashmir, then there is something in my MB, [indiscernible].
Understood. My third question, I don't know whether you covered this in your PPTU. You usually put these projects under construction/implementation, what is the value, sir?
Around INR 8,000 crores. It's there.
It's there. Okay, I'll refer to that.
[indiscernible] is there, I'm seeing it's there.
Yes, this will include ongoing projects, the Leh-Ladakh project and other TBCB projects one? It was about 45,000 crores last quarter. So I'll refer to the PPTU.
So we'll take one question from chat box, and it comes from [ Shiron Gupta ]. His question is, do you expect receivables to normalize below 45 days going forward? If yes, then when can we expect the same?
I think safe date will be 31st of March. Because last year also, we were quite struggling to get 45 and then we ended up much lower. 43 or even so.
So I think 2 things. One is that INR 2,000 crores is already off because of this installment payment. Now we are required to be paid on a contiguous basis. Otherwise, the surcharge on the entire INR 2,000 crores will kick in as per the rules.
We also have this power to regulate. In fact, we are mandated we're bound to regulate. So I expect this to down somewhere in March. March is a very critical date for both of us.
Sir, my question can I squeeze in one question from my side? Because it's come from a couple of investors who are unable to talk.
Go ahead.
So this question is broadly a proposed amendment to the electricity act. Hypothetically, if the ad gets amended and open access is implemented in reality. Would you consider that as a growth area? And are you working along those lines?
See the open access being made available. We'll increase the flows across the region because that will require the individual customers to tie up resources from any place in India. So they will, therefore, require this. And that will come in the form of demand.
So these signals will come to the CTU, to the CEA, for the transmission planning and then it will translate into networks [ mediation ] and then it will come to us for implementation. So between this and between the implementation, there will be significant time line before you see the projects on the ground, right? I can say that our [ open access ] will improve. The demand for interregional transmission capacity, it will require more ISTS, but sure.
Because they are not going to buy from the state generating utilities. They will buy it outside the state. If they have to buy within the state, then intrastate will be sufficient. But their economies will come where if suppose somebody wants to buy only green power, then he will procure from a green generator in Rajasthan, Argujaraa, Tamil Nadu and therefore, it will require augmentation of the network capacity.
It will -- but then to translate it into an investable number and then see, that is still some time gap will be there.
Sure. Very good, sir.
I think in the interest of time, we'll have to limit that to be the last question. I sincerely thank the Power Grid management for giving us great insights into the numbers as well as what is lined up ahead.
On behalf of IIFL Securities, I also thank all the participants for joining in.
Any last words, sir, that we would like to extend to the investors?
No, I thank all the investors for joining this call. And -- yes, it is extremely challenging times we are going through right now, the entire sector due to 2 reasons, as I mentioned initially, one is the drive towards sustainability. And then this focus on energy sector, particularly because [indiscernible] system.
There is more focus on self-reliance, more focus on renewables, and that is good for the sector as a whole because when we have to take our capacity from 400 gigawatts today to say 800-plus gigawatts by 2030 in the next 7.5, 8 years that is bound to throw up immense opportunities for all the players in the segment. The only thing is that the opportunities will not be in the same conventional mold. They will be in the new avenues and be it transmission, be it storage or even generation. So we are evaluating all these opportunities and trying to put ourselves in a position that, yes, there will be growth for this company going forward.
Thank you. Wish you all a very happy year of [indiscernible]. Thank you.
Thank you very much, sir.
Sir, I'm ending the meeting.
Yes. So I'm just disconnecting.
Sure. Thank you. Thank you, everyone.