Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
IndiGrid Infrastructure Trust (NSE: INDIGRID) Q4 2026 Earnings Call dated May. 18, 2026
Corporate Participants:
Sanil Namboodiripad — Chief Operating Officer
Harsh Shah — Managing Director
Meghana Pandit — Chief Financial Officer
Analysts:
Rohan Giwala — Analyst
Unidentified Participant
Deep Vakil — Analyst
Presentation:
Sanil Namboodiripad — Chief Operating Officer
It. Sa. Sa. Ladies and gentlemen, you have been connected for Integrated Infrastructure Trust only conference call. The call will begin shortly. Request you to please stay connected. Thank you. Sadies and gentlemen, good day and welcome to integrity Infrastructure Trust Q4 and FY26 earning conference call hosted by Access Capital. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Rohan Giwala from Access Capital. Thank you. And over to you sir.
Rohan Giwala — Analyst
Thank you. Good evening and welcome to the Q4 earnings call for Integrate Infrastructure Trust today. From the management, we have with us Mr. Harsh Shah, Managing Director, Ms. Meghna Pandit, Chief Financial Officer and Mr. Sanan, 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 and A session. I now hand over the call to the management. Thank you. And over to you sir.
Harsh Shah — Managing Director
Hi everyone. Thank you for joining our quarterly call. As we have done before, I’ll start with the presentation and Sunil will take you through the quarterly performance and the forecast. And subsequently we’ll take question and Answer on slide 3. I would like to reiterate. Our vision is to become the most admired yield vehicle in Asia. While we focus on focused business model, value, accretive growth, predictable distribution and follow an optimal capital structure. As we stand today In a slide 4, assets under management are approximately 33,850 crores.
We are spread across 20 states and 2 union territories with 94 different revenue generating elements. We own about 55 lines spreading across 9,700 circuit kilometers, 18 substations crossing 32,000 MV of capacity. We also own 1.5 gigawatt peak of solar and average residual contract like Our contract is 25.3 years in transmission. Many of them are bloom projects. Solar about 20 years and less about 11 and a half years. On MES front we have approximately 2.5 GWh of capacity at different stages of development including two projects totaling about 440 megawatt hour commission.
Taking you through the quarterly update on slide number six, 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, resiliency and asset management businesses. He was an earthquake partner at PwC and also is a member of Hybrid security committee at CD we commissioned Gujarat Best Private Limited GBPL which is 180 megawatt my 360 megawatt gated capacity. This plant is located in Gujarat and GEPL is one of India’s largest standalone utility scale mesh project at any single location.
We also commissioned NRSS project’s Regulated Tariff project during the quarter and was awarded three more RTM projects under the OPJ Blue Scheme with a cumulative value of about 165 crores of expansion. We also consummated acquisition of Gadak Transmission Limited from Renu which is approximately 187km of line and 1500mb of capacity transmitting renewable energy power from Karnataka. As far as the financial performance goes, our operating revenue stands at 874 crore which is up 9.5% year on year primarily by adding new projects in the portfolio through the year our revenue growth translated into operational EBITDA growing by similar 8.5% year on year ending at 782 crores at a margin of 99% FY16 full year financial performance the operating revenue was 3,311 crores up 3% and operating EBITDA at 298 crores, approximately 90% EBITDA margin and a growth of 2.5 2.4% at AUM and net debt to AUM and the end of the fiscal is 33,800 crores and leverage at about 57.6% respectively.
Correction for the quarter four had been 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 FY 2012 we have guided the BPU amount at 16.48 unit which will be about 4.12 a quarter which is a growth of 3% year on year, a weighted average availability of transmission assets at 99.54% and solar CEF stands at approximately 24.2%. With all this we are sure that we will be continuing to deliver superior total returns, sustainable increase in GPU 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 GWh and the highest one that is served was 256 on April 25th in this quarter which is crossing the previous high of 2026 overall installed capacity while it stands at 533 GWh of which 51% is from RE the installed capacity and RE is contribution year back 46.3%. While we think it’s 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 integrating targeting integration of 900 gigawatt of non fossil fuel by 2035-36.
So we are talking about doubling our goals in next 10 years. Also NLP has been launched and there has been some activity around it. So we will continue to monitor if there are opportunities for individuals to participate. You go to the next slide. We think that there are four 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, energy affordability, we feel that transmission plays a very crucial role in ensuring that renewable energy which is a grid parity is delivered at the right place at the right time.
We feel the transmission sector is under invested 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 leadership in independent batch storage plant in the country, we believe we will be one of the largest in the coming year. We are concerned about the incremental capacity which is bidded 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.
True execution is the moat I think as we see gradually it’s shifting from cost of capital 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. So we do feel that there will be great impetus on renewable energy investment and therefore grid investments. NLP 2 there is more and more recognization for boot structures and unit like capital recycling.
So 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 we grow in the next slide. As we can see there is a high bidding activity in transmission and mesh sector at a high level. We are looking at active bids of over 2 lakh crores of transmission bids. And just to put things in perspective, this is almost equivalent to what happened in last 10 years. So 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 products.
We participate in most of these projects and hope that eventually we will get a fair share at reasonable returns. Coming to slide 10 for quarter four operating performance I will invite my colleague Sanil to take you through the operating performance for the business.
Sanil Namboodiripad — Chief Operating Officer
Thank you Harsh and good afternoon to everyone. We continue to maintain superior weather availability and performance. With respect to the safety updates, we had one last 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 CVF and the battery storage project at KBPL that is in Delhi with weighted average availability of 98.55% much beyond the required as per the service agreements.
With respect to the reliability of the assets, the trips per line stood at point 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%. We had a couple of failures of inverter springs and some cable theft etc. Which happened at various locations. If you look at the graph the availability of all the assets were beyond normal except RSTCPL that is right to Sholapur and gptl.
These were mainly due to the planned outages of RSTCPL for rectification of insulator failures as well as in the 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 were lined at 0.1 training manner as well around 15,800 lost time. Incident 1 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?
Meghana Pandit — Chief Financial Officer
Sure. Thanks Anil 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.
So essentially the reported financial performance is in line with accounting days 115 and we’ve shown the operational financial performance that you see in the table on the right hand side. So on the operational revenue performance you can see that the revenue has grown by 9.5% on Q4FY26 over Q4FY25 from 798 to 874 crores and year on year growth stands at about 3.1% from 3212 crores to 3311 crores. This is on the back of the acquisition that we did during the year as well as the operationalization of certain RPM projects and the under construction projects.
The operational EBITDA for the quarter stood at 782% which is 8.5% increase over Q4FY25. Year on year increase is about 2.4% from 2913 to 2982 crores. NDCF generated during Q4FY26 stands at about 4, 405 crores which is a marginally dipped number by 6.7% over Q4FY25 that bases 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% from 1400 crores to 1382 crores. The DPU per unit as guided is 4 rupees for Q4SI26 and in line with the guidance provided for FY26 of 16 rupees.
Both the charts below provide Q4FY26 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 26 collection and receivable profile which continued to be very healthy. Left hand side graph talks about the transmission assets which clocked in 102% of collections in Q4FY26 with day sales sales outstanding at 37 compared to 38 days in Q4FY25. On the solar assets the collection stood at 97% in Q4FY26 compared to 89% in Q4FY25 and the receivables days stood at 37% significant improvement compared to 48 days in Q4FY25.
Moving on to slide number 13 which talks about the distribution update, the distribution per unit of 4 rupees for Q4FY26 is contributed by interest, dividend, capital repayment and other income which will be 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 Q4FY26 stands at 95.26 crores which is higher than 83.46 compared to last quarter in the last fiscal year. This is the dilution that we did on the back of the preferential issue and the institutional placement.
The NAV per unit for Q4FY26 stood at 148 point compared to 144.11 on the back of movements in the back as well as the asset acquisitions that happened with the Q4 distribution, 117.32 per unit rupees has amounting to 76.48 billion has been distributed to the investors since listing and if you look at the right hand side graph which talks about what has been the annual distribution trend and over the last 56 years as targeted we have ensured that the CAGR for the DPU is about 5.4% from 23 to 27 including 16.48 which is the guidance for FY27 a y oi increase of about 3%.
Moving on to slide number 14 which talks about the consolidated EBITDA to NDCs waterfall starting from the EBITDA generated at the SPV level at about 985 crores. Adjusting for all the working capital movements, the CAPEX related movement, 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 IGT and destroy working capital movements and tax movements, the total NDC is generated at indigrid trust level is at 405 crores out of which the distribution for the quarter at 4 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 21st March 2026 stands at about 544 crores more than about 1 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 Triple A rated by Crystal Accra 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 in TRIPS coverage ratio of 2.8 times including a cash balance of about 18.14 billion which includes the DEFRA balance as well as the NBCF reserve.
Coming to the cross borrowing it is fairly well distributed across all classes of debt investors 74 71% is across NCVs 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 well diversified and termed out borrowing profile which where we’ve ensured that not more than 10 to 12% of gross borrowing 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 and as you can see that IndiGrid has delivered about 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 Integral 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 Energride.
In addition to that there are a lot more synergistic greenfield opportunities which are coming up which we will look to participate in through Energirid 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 have ensure that we sustain minimum 99.5% availability across the portfolio and in addition to that look at strengthening self reliant O and M capabilities to ensure how we are able to maintain sustainable performance. Similarly uphold world class EHS and 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.
Sanil Namboodiripad — Chief Operating Officer
Thank you ma’. Am. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question will press star N1 on their touch on telephone. If you wish to remove yourself from the question queue you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question comes from the line of Rashmika from Rekha Enterprises. Please go ahead.
Questions and Answers:
Unidentified Participant
Hello, I have two questions for you. My first question is In Finland they have perfected a technology whereby electricity directly transmitted to household without using any wire through the air. What happens if the technology becomes globally adopted and India also starts transmitting electricity through the air without using any wires? What happens to our business then? What happens to our business model then? That is my first question.
Harsh Shah
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 have even reached small critical mass. So this in our mind is a dream. But even if it was to happen, our contracts are pkopi. So 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 2 and a half 3 rupees.
But for almost 67 years at a commercial scale, a country is still running majority on coal. So 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. So 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.
Unidentified Participant
My second question is the CRU announced a 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? And 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.
Sanil Namboodiripad
Team, I guess you’re on mute. Please unmute and speak. Thank you.
Harsh Shah
Yeah, thank you. Yeah. So to answer your second question, we have historically done 3 to 5%, 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? And once we increase the guidance, we want to be comfortable and sure that that incremental guidance continues for a reasonable period of time. And 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 then we assure that that cash flow is sustainable for longer period. Increase that. And 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. So 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, this is not a bond, right? So it is based on what business is performing and how we are seeing the growth in cash flows.
And based on that we died. So I would say 3 to 5% is in a reasonable range. We are still in the range.
Unidentified Participant
Okay, thank you. That is it from me and keep up the good work. Keep up the good work. Thank you.
Harsh Shah
Thank you.
Sanil Namboodiripad
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the question from the participant, we request you to kindly limit your question to three questions per participant. If you have a follow up question, you may rejoin the queue. Our next question comes from the line of Deep Wakeel from Bandhan amc. Please go ahead.
Deep Vakil
Thank you for the opportunity. Audible.
Sanil Namboodiripad
Your voice is breaking.
Deep Vakil
Okay. Am I audible, sir? Now? Better. Hello? Yes.
Sanil Namboodiripad
Yes. Yeah.
Deep Vakil
Sir, couple of questions. One on the NAV part. Currently we are at 148 and we are expecting around 7,500 to 8,000 of crore of under construction projects which will be commissioned in around what, 12 to 14 months time. So do we see some significant increase in our NAV by the end of this year?
Harsh Shah
I cannot predict nav. Right. NAV has two factors. One is the projects that get commissioned and will reach to. Will reach to the NAV as the new projects are acquired on the other end. There is debt, there is asset value, there is beta, there is risk free rate. You know, so there are many variables of nav. Yeah.
Deep Vakil
So
Harsh Shah
We do not control all of them. So it’s impossible for us to predict.
Deep Vakil
So I mean my question revolved that when will it be broadly added into our aum? I mean so once it gets commissioned. So we’ll add it in our AUM, right?
Harsh Shah
Yeah. We see over a period of 12 to 24 months, we will see different assets getting added. Each asset has a separate concession agreement, separate timeline of commissioning. So in separate acquisition date. So all the projects that you currently have will have in next 12 to 24 months, we should see them getting added.
Deep Vakil
Sure, sir. And 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. So just one question on that. I mean 16.48 which consider. So just wanted to ask it is considering our under construction pipeline of 7,500 to 8,000 crores of. I mean that getting added to our UN PO. I mean it considers that under construction access distribution as well.
Harsh Shah
Yes. As you can see in phase five, the yellow curve.
Deep Vakil
Yeah, yeah.
Harsh Shah
That’s already showing acquisitions plus GREENFIELD plus augmentation.
Deep Vakil
Okay. So at the broadly, can we interpret it in this way that till FY31 or 32, 16.48 can be maintained without acquiring anything? I think that
Harsh Shah
Is the right way to look at it.
Deep Vakil
Sure. And sir, one last thing. Can we do we have a broad guidance of DPU breakup as in. I’ve been seeing that we have interest to around. Interest is around 60 to 65% of our total DPU balances, dividend and capital repayment. So broadly, should we expect that trend to continue?
Harsh Shah
You know, it’s impossible for us to give you that guidance because you know we have over 30 SPVs and we have to follow the accounting and CBDT norms around that. So you know, depending on which SPV has more cash, less cash, the dividend, principal and interest ratios keep changing. So it’s difficult for us to guide but broadly we feel it will remain in a similar range. But you know it’s impossible for us to predict accurately. That’s why we keep disclosing quarter on quarter depending on which SPV has generated cash.
So it’s directionally it remains similar but difficult to predict and give you a exact projection.
Deep Vakil
So. So thank you. I was broadly asking from a taxation standpoint, but I think this helps. Thank you and all the best.
Sanil Namboodiripad
Thank you. Ladies and gentlemen, anyone who wishes to ask a question. My prestar and one. Reminder to all the participants if you would like to ask a question you may press star and one. The next question come from the line of Nimi Shira Thor from SSR Charitable Foundation. Please go ahead. Nimish, you may please proceed with the question. Nim, you may please proceed ahead with your question. As there’s no response we’ll move forward to the next participant. Next question come from the line of Nimish and individual investor.
Please go ahead.
Unidentified Participant
Yes, thank you for giving me the opportunity to ask this question. I hope I’m audible.
Harsh Shah
Yes,
Unidentified Participant
Yes, yes. I just, I am a happy investor of Indigo since 2020. Just wanted to congratulate the team and just wanted to request you to throw some light on the growth outlook of indicate in coming decade and the scope of indicate in the power sector distribution business incoming decade. Thank you.
Harsh Shah
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. So by that rationale we do see a continuous need for next 10 years for investment in transmission and battery storage. Overall market size we feel in 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 but 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.
So we are fairly confident that there is 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 group. So we are confident that there will be opportunities for us to acquire more projects, win more projects and really grow.
Unidentified Participant
Thank you. Thank you.
Sanil Namboodiripad
Thank you. Our next question come from the line of Daunit from Saula family office. Please go ahead.
Unidentified Participant
So I have a question with regards to that. Recently there were A lot of fast breeder reactors in nuclear power which have been commissioned. So do you think that integrate will have some kind of future in nuclear power as well going forward? And like is the transmission for that different from what it is for another renewable assets?
Harsh Shah
So to answer your second question first, transmission is exactly same. One of our assets is already evacuating power from 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 build a reactor or any kind of nuclear energy at this point in time. I think both in terms of technical expertise as well as complexities and we are far away from many of that. So I do not think we will be getting into generation of nuclear power anytime soon.
And transmission as I mentioned, it’s the same lines that work. There’s no different technology. So as and when expansion takes place for that target we would be looking to find something.
Unidentified Participant
Secondly, just wanted to know that the what is the current NAV for the for the assets as of as of that as of 31st March and how do we how do we interpret NAV addition going forward? I I heard that on the call you were saying that you wanted to add assets which are value accurate or DPU accelerators. So I’m assuming that is in line with increasing our navy also. So is there a particular process which you will have in mind while how do you evaluate whether a particular asset is going to be value and NAV attribute?
Harsh Shah
Yeah, so one is how do we evaluate. Second is how is 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 and therefore one can tally that. Let’s say, for example, March 31, the NAV is 148.24. What is the each assets valuation in crores minus the debt minus any other adjustments plus cash divided by number of units.
So that computation is a very simple model that one can build very simple Excel not even model and then you can compare quarter on quarter how the valuation has changed. So that’s the best way to calculate. We obviously run before run models to see that when we add this project how much going how much is going to be accretion in navy terms of valuation of this asset minus the debt that we Fund with. But you also have the same data available once you acquired. So it’s. It’s a very simple slide or a file that one can build to keep track of it.
Unidentified Participant
Yeah. Sorry. I think so. My question was not on how to calculate the enemy. My question was that how do we know whether the. The how you’re saying that how will we know whether the particular asset which we are adding is actually going to be additive to the energy like is what kind of keep.
Harsh Shah
Keep all the assumptions in the Excel same. Just add the cash flows of any 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.
Unidentified Participant
Okay. All right. All right. Thank you sir. I’ll get back to you.
Sanil Namboodiripad
Thank you. Our next question comes from the line of Nimesh Ra from SSR Charitable Foundation. Please go ahead.
Unidentified Participant
Good afternoon. Harsh and team. As always, the numbers remain very impressive. A couple of questions. The first one is on battery energy switching Bess. We are probably one of the pioneers to get into it and we already have run a particular BEF in Delhi for a year now. Harsh, would love to understand from you what is the lessons that you have learned 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 originates from the number where NDCs generated has reduced in this quarter, although the operational revenue has gone up. I heard Meghna mentioning that there was some working capital transactions and I presume this was the amount which was largely used up for our assets under construction. So you know, that brings me to probably an important question on whether so far our business model was always a hedge against the business cycle. So you would buy out an asset and rent it out and earn a rental on it.
But probably for the first time we are venturing out into taking risks in building an asset rather than buying it out. Would love to understand going forward what’s going to be your thinking on this particular asset. Thank you.
Harsh Shah
Sure. Thanks. So to answer the first question on battery energy storage, we have now two plants which are functioning. The first plant has over over one year of performance and the second plant has just about couple of months, three months of performance now between 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 rather less competition. And subsequently we executed it well. The market supported in terms of reducing best prices at that point in time. And therefore we had projects which had very good returns, which is substantially higher than what we would have earned in any other projects. Third, for us, return or IRR DPU accretion matters more. We think whether it’s transmission or best, 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 owing to the fact that we were early and therefore we had better opportunities. On the next question, partly you’re right. We are carrying interest burden on the amount that you’ve invested in projects. And as they come to fruition, the NDCF 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 the development stage offers many advantages to us.
One, it allows us to control the 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. So this is not the first time. Till now we have commissioned three projects, rather four projects. Two transmission and substations and two battery storage projects, all of it on our own. So we started with a 200 crore asset honestly, then then went to 100 crores and another 700 crores that we commission now.
So there is sufficient experience within the team to expand on this space. Having said so, we are well within the 10% that SEBI allows us. Our numbers are very smaller than 10% 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 are guided. So that already takes into account such, I would say investment cost.
And then that is one of the reason that when they commission, they give us ability to increase as well.
Unidentified Participant
You got the point. Thank you so much.
Harsh Shah
Thank you.
Sanil Namboodiripad
Thank you. Our next question comes from the line of Vishal Sarda from Marvis Growth Advisors. Please go ahead.
Harsh Shah
Hi, good afternoon. Harsh and team. Am I audible? Yes. Hi. I have a basic question that SEBI has allowed weeks to be real estate investment trust to be counted as part of equity allocation and consequently, in the last one odd years a Lot of mutual funds have increased their REIT allocations. So is the inlet lobby also pressing SEBI to be counted as part of equity investments? And if yes, what’s the status on that? See, I mean, I mean I wouldn’t use lobbying and such words. I think we do work with SEBI and other stakeholders to put appropriate qualifications 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 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 felt that REITs as a business model is more equity like and therefore they want to start with REIT classification of 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 based on requirement from 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 reach. So 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. So 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. So I’m sure in a couple of years time there’ll be more public invits, there’ll be better experience of equity being listed and that’s something which at that time we will go and work with regulator and request them to consider. Again having said so, you know, while benefit of equity is I don’t see material benefits, honestly we already render equity taxation. We are listed on both exchanges, we are fairly well traded.
While Indian. Index fund is not not able to include us without equity classification. But honestly the regulators will take cue that foreign funds or foreign index is already included. So indigrid is part of FTSE index as we see and it got included in last year
Unidentified Participant
And
Harsh Shah
Based on that we saw a lot of passive flows coming in of huge index fund providers. So 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. So we’re hoping in next couple of years it will fall in line. Thank you for the explanation. My concern is coming from another small point which is an addendum to this. Brokers don’t accept individuals margin while they’re accepting retail margin. So I am one of the earliest investors because having invested since IPO and that also creates a very big liquidity issue in our books that we can’t use indicators margin.
We intend never to sell it hopefully the way you guys are executing and absolutely flabbergasted with the way you executed and thank you Dutch for that very much. So that margin funding requirement is something which we can’t satisfy with integrated. So any light on that? It’s good throw. You know this has come before as well. I mean we are not usually aware about how the market participants work. But Sebi does consider units as security. Now why it is so from margin funding perspective I think the classification of security is important.
I’m not sure if there are other criteria but once it is security I think it is no law not to lend against that. It is just market practice and I think once you large players will start doing it, it will follow. I mean we have little to implement and honestly a regulator won’t even consider a view that allow margin funding because I’m sure you know it’s kind of looked down upon within the regulatory circle. So I’m not sure if first I’m not sure if law stops you bargaining funding. It’s market practice.
Second is, you know, I don’t think that it’s looked at favorably by a regulator. So it’s difficult for us to represent because we are not a party over there and maybe some investors group needs to go. Thank you very much for the explanation and all the very best. Thank you.
Sanil Namboodiripad
Thank you. Our next question comes from the line of deep Akil from Bandana emc. Please go ahead.
Deep Vakil
Hello sir, just one follow up on the question that an earlier participant participant had asked. I mean regarding the under construction risk point that you were making. But the under construction assets are under energet, right. So technically Indigrid doesn’t have that interest rate risk on its book. Can you please throw some light here?
Harsh Shah
Yeah. So we invest in energrade asset about one third equity required. So if whatever equity we invested in that on that we have to pay interest because we are borrowing while we have cash. But effectively if we didn’t invest we would have repaid that cash debt. Right. So accordingly interest burden will be lesser. So in an indirect manner, that is the cost of carry if I can pay for such investment. So we do invest in projects in Energrid and that is how we are passing the expertise and getting a confirmed sale to us.
Deep Vakil
Got it, sir. Thank you.
Sanil Namboodiripad
Thank you. Our next question comes from the line of Shagun and individual investor. Please go ahead.
Operator
Good evening, sir. So the board meeting had an agenda of fundraising. So could you please clarify if you are leaning towards more equity dilution or is it through debt?
Harsh Shah
So you know we raised, we raised two issuances in last year. At this point in time there is no direct immediate placement in mind for equity. We take approval. 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 take have to raise capital, whether it’s institutional placement, a preference issue or anything else, calling another board meeting and shareholder meeting becomes an additional step which exposes us to more price risk.
So we decided from this year that every year we’ll take approximately 2000 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. And that’s why we are taking a preemptive approval at this point in time. There is no immediate placement issue that we foresee on any equity.
Operator
Thank you.
Sanil Namboodiripad
Thank you so much ladies and gentlemen. That was the last question for today. With that we conclude this today’s conference call on behalf of Access Capital. That concludes this conference. Thank you for joining us and you may now disconnect your lines.