IndiGrid Trust — Q1 FY26 earnings call

I mean if we don't acquire assets, how do we grow, right? We will acquire assets or we'll build assets under EnerGrid to grow. We already acquired INR2,000 crores of assets in this financial year. That's evident. We already won another INR800 crores asset in EnerGrid, so that will come to us. We are seeing a sizable pipeline in the sector and are very comfortable that we will end up acquiring we don't need to acquire any quarter-on-quarter basis, right?

Analyst questioned DPU growth sustainability without acquisitions, and management clarified their strategy involves continuous asset acquisition/development through EnerGrid to support DPU.

Asked by Deep Vakil

Yes. I think if you see a chart which is provided in the investor presentation, till 2031-'32, we do not see any I mean, if at all, we don't acquire anything for the next 5, 6 years also, if the DPU will continue.

Management provided a long-term outlook on DPU sustainability, indicating it would continue for 5-6 years even without new acquisitions, providing confidence in the current asset base.

Asked by Deep Vakil

See, we are not taking direct exposure to under construction projects right now. Most projects, there is limited ROW, so we don't face that in transmission projects, the ROW is the heart and soul of it. We do face it via EnerGrid because EnerGrid owns the transmission projects, and we only invest one third. But they do face ROW challenges, and -- but the government regulations have moved very much in, I would say, a positive framework because the new regulations have increased the compensation, which ensures that the farmers from whom we are going to buy and get fairly or I would say, sizably compensated for that, and that -- and if at all, we have paid more than the threshold return, we get that as a recovery in change-in-law. There is a sizable amount of comfort that we are developing in right of way. Having said so, it still remains challenging. We still need to fight for it, so it's a process.

Management acknowledged the ongoing challenge of Right of Way (ROW) issues for EnerGrid's projects, despite positive regulatory changes, highlighting a key operational risk.

Asked by Dheeraj Kripalani

Yes, that's correct. It's in that range. INR30 crores, INR31-odd crores is.

Management clarified the specific financial impact of the solar thermal issue (₹30-31 crores) and the IM fee (₹12-13 crores) on EBITDA, providing transparency on the dip.

Asked by Arun Kharbanda

Yes, we are covered by insurance, but we are not accounting as an insurance receivable. We have lodged the claim, and we look forward to receiving, but it's a sizable claim, so it takes time. We don't account for as a receivable, but we work to get it and we account it on a cash basis as and when we receive it.

Management confirmed insurance coverage for the solar asset issue but noted that the claim is sizable and takes time, hence not yet recognized as a receivable, indicating a potential future cash inflow.

Asked by Hansal

We can acquire approximately, if I to theoretical limit, approximately INR6,500 crores of assets to reach to closer to 70% and not raise equity. However, we think that whenever we come closer to 65% on nearby, we feel it's better to raise equity in time instead of really tying it up too fine. To answer your question straightforward, we still can acquire theoretically INR6,500 crores of assets.

Management quantified their capacity to acquire an additional ₹6,500 crores in assets without needing immediate equity dilution, providing insight into future growth potential and capital structure management.

Asked by Manish Goyal

No, see, RBI rate cut and the actual lending markets are not in sync, right? There is one is instrument difference and different loans and bonds are negotiated at different terms. Transmission typically happens when we actually refinance those facilities. That's why I said it depends on when we refinance these agreements, we will have -- because a majority of facilities are fixed, so we don't get direct transmission. There are some facilities which are floating where we get, but majority of the facilities are fixed, so we'll have transmission coming in a few years.

Management explained that the impact of RBI rate cuts on their cost of debt is not immediate due to the fixed-rate nature of most borrowings and will only materialize upon refinancing, clarifying the timing of potential interest cost savings.

Asked by Deep Vakil

Having said so, today, again, my numbers may be off, I'll check with Meghana, but we have over 30,000 investors that are investing with IndiGrid. Yes, that number is less in comparison to, let's say, INR12,000 crores market cap, small cap, right, number of 40,000 investors. Maybe in some small cap, that number could have been 1 lakh could be, but we are not in a competition of how many unitholders participate. I can tell you, IndiGrid has remained a stable yield generating and still growing entity.

Management addressed concerns about investor interest and liquidity by highlighting the significant increase in investor count since IPO (3,000 to 30,000+) and stable trading volumes, emphasizing IndiGrid's role as a stable yield-generating entity.

Asked by Abhishek Jain