IRB Infrastructure Developers Ltd (IRB) Q3 FY23 Earnings Concall Transcript

IRB Infrastructure Developers Ltd (NSE:IRB) Q3 FY23 Earnings Concall dated Feb. 14, 2023.

Corporate Participants:

Virendra D. Mhaiskar — Chairman and Managing Director

Tushar Kawedia — Group Chief Finance Officer

Poonam Nishal — President, Corporate Strategy

Anil Yadav — Director, Investor Relations

Analysts:

Mohit Kumar — DAM Capital — Analyst

Teena Virmani — Kotak Securities — Analyst

Parikshit Kandpal — HDFC Securities — Analyst

Prem Khurana — Anand Rathi — Analyst

Rohit Natarajan — Antique Stock Broking Limited — Analyst

Nikhil Abhyankar — DAM Capital — Analyst

Alok Deora — Motilal Oswal Financial Services Ltd — Analyst

Presentation:

Operator

Good morning, ladies and gentlemen. Welcome to the IRB Infrastructure Developers Conference Call for discussing the Unaudited Financial Results for the Quarter Ended December 31, 2022, and recent developments.

We have with us on the call today Mr. Virendra Mhaiskar; Mr. Dhananjay Joshi; Mr. Anil Yadav; Mr. Mehul Patel; Ms. Poonam Nishal; Mr. Tushar Kawedia; and Mr. Jose Tamariz from Cintra.

As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that the duration for the call would be 45 minutes and any queries left unanswered on the call or after the call can be subsequently mailed to the management for adequate response and resolution. [Operator Instructions]

I now request Mr. Mhaiskar to give you an overview of the significant developments during the quarter. Thank you, and over to you, sir.

Virendra D. Mhaiskar — Chairman and Managing Director

Thank you. Good morning, everyone. I welcome all the investors and analysts on the quarterly con call. Hope you have all been able to go through our detailed numbers, as well as the presentation released. As part of our business strategy, we are continuously enhancing our returns through leverage optimization.

We are pleased to inform you that another subsidiary of IRB Infrastructure Trust, that is Udaipur Tollway Limited, has allotted unlisted rated redeemable non-convertible debenture aggregating to INR7 billion on private placement basis to eligible investors on December 29, 2022. The NCD proceeds from refinancing has been utilized for part takeout financing for the existing project loans, which will provide a significant saving of INR100 million annually [Indecipherable] fixed rate of interest of 8.9% per annum for next five years. This is in further to debt refinancing of INR21 billion for two projects, that is Solapur Yedeshi and Yedeshi Aurangabad completed by us in last quarter. We will continue this strategy of leverage optimization for other projects in the Group.

Sale of VK1 project to the Public InvIT has been concluded in this quarter and we have received consideration of INR3.4 billion, which is close to 1.2 times to book. Net debt-to-equity on consolidated basis is less than 0.8 is to 1 as on December 31, 2022. CRISIL has upgraded the rating of the company by a couple of notch. This has led change in the rating category of IRB from A to AA minus. Post receipt of appointed date, the execution of Ganga Expressway project is progressing in line with the schedule. Recently, we have received appointed date for the Chittoor Thachur HAM project on January 24, 2023, and thereby all the projects have now received the appointed date and execution is going on. This project will also provide meaningful contribution to the construction revenue in the coming quarters.

As can be witnessed in our monthly disclosure of the toll collection, the robust growth is observed in Mumbai-Pune and Ahmedabad-Vadodara project, wherein Mumbai-Pune has reported INR10.6 billion for nine months FY ’23, from INR8.9 billion, that is 20% growth, whereas Ahmedabad-Vadodara has reported INR4.75 billion for nine months FY ’23 from INR3.8 billion, that is 24% revenue growth on year-on-year basis.

For 10 assets of Private InvIT, we have witnessed growth in toll collection from INR8.5 billion for FY nine months 2022, to INR15.4 billion for nine months FY ’26, that is 81% growth on year-on-year basis. The growth was led by achievement of COD in couple of projects, traffic growth and tariff hike. The order book of the company now stands at INR191 billion, which provides strong revenue visibility for next two years. Bidding-selling calendar is quite robust and lots of projects are lined up over coming months. Considering the same, the company is targeting to add 6,000 to 8,000 worth of orders over next few months.

Now I will request Tushar to provide financial analysis for December 2022. Over to you, Tushar.

Tushar Kawedia — Group Chief Finance Officer

Thank you, sir. I’ll now take you through the financial analysis for Q3 FY ’23 versus Q3 FY ’22.

The total consolidated income for Q3 FY ’23 has increased to INR1,570 crores from INR1,498 crores, increased by 5%. The consolidated toll revenues for Q3 FY ’23 have increased to INR554 crores as against INR507 crores, up by 9%. The consolidated construction revenue for Q3 FY ’23 has increased to INR1,017 crores from INR991 crores, increased by 3%. EBITDA for Q3 FY ’23 decreased to INR801 crores from INR957 crores, declined by 16%. This is on account of a one-time income booked for the last year. Interest cost has decreased to INR367 crores in Q3 FY ’23 from INR547 crores, down by 33%. Depreciation has increased to INR215 crores in Q3 FY ’23 from INR192 crores, increased [Technical Issues] has remained unchanged at INR218 crores. PAT after share of JV loss of INR13 crores has increased to INR141 crores as against INR73 crores, increased by almost 94%. And cash profit has increased to INR369 crores in Q3 FY ’23 from INR361 crores, increased by 2%.

Now I request moderator to open the session for question and answers.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] First question is from the line of Mohit Kumar from DAM Capital. Please go ahead.

Mohit Kumar — DAM Capital — Analyst

Yeah. Good morning, sir. And thanks for the opportunity. My first question is on the Mumbai-Pune Expressway. Can you confirm the growth in Mumbai-Pune for Q2 and Q3 was 10% and 7%, is that number right? And are we up for traffic revision from April 1, 2023? Is that understanding correct?

Virendra D. Mhaiskar — Chairman and Managing Director

Mumbai-Pune, as I have discussed in my opening commentary, the growth for nine months was around 20%. We will confirm the quarter-wise improvement in toll collection on Mumbai-Pune shortly. Now with respect to Mumbai-Pune, yes, you are correct, tariff revision is due from April 1. On Mumbai-Pune, the rate revision happens after every three years. The next revision is April 1, 2023, and this will be the last revision on Expressway. And here after the rate will be freeze on Expressway. And with respect to NH4, the tariff revision is around 16% which will continue because that is as per NH policy. And Expressway, this will be the last revision. In terms of the traffic breakup, roughly 75% traffic is on Expressway and 25% is on NH4.

Tushar Kawedia — Group Chief Finance Officer

And on the quarter-on-quarter revenue growth, you are right, it is 10% when compared with Q2 of FY ’23.

Mohit Kumar — DAM Capital — Analyst

Secondly is on EPC execution, expectation for the —

Virendra D. Mhaiskar — Chairman and Managing Director

Can you talk louder? I think your voice is quite low.

Mohit Kumar — DAM Capital — Analyst

Is it better now?

Virendra D. Mhaiskar — Chairman and Managing Director

Yes.

Mohit Kumar — DAM Capital — Analyst

Yeah. Sir, the second question on the EPC execution for the entire fiscal, what is the number we should bake-in? I think we have done INR900 crore, which is slightly on the lower side for this quarter.

Virendra D. Mhaiskar — Chairman and Managing Director

So I think as you are aware that we got appointed date for Ganga in the last quarter only. Now there will be a ramping-up of the Ganga in this quarter. And also we have received the appointed date for Chittoor-Thachur. So probably in this quarter, we will be — the revenue will further improve. And on whole year basis, I think 4,500 will be the new on EPC side.

Mohit Kumar — DAM Capital — Analyst

Understood. Lastly, on the opportunity side, when you said you want to add INR60 billion to INR80 billion of order in Q4, are they HAM contracts or are there some opportunities from BOT or TOT?

Virendra D. Mhaiskar — Chairman and Managing Director

Mohit, the contribution will come from the HAM and BOT, both put together. As of now, there is one BOT project where already bids are submitted and there are lot of HAM projects also coming for the BOT. So this order book which we are eyeing will be mix of BOT and HAM.

Mohit Kumar — DAM Capital — Analyst

Understood. Thank you, sir. And all the best. Thank you.

Operator

Thank you. [Operator Instructions] Next question is from the line of Teena Virmani from Kotak Securities. Please go ahead.

Teena Virmani — Kotak Securities — Analyst

Hi, sir. My question is related to ordering. You’ve mentioned that you’re expecting around INR60 billion to INR80 billion of orders. So far ordering has not been that great, particularly from the sector and even for most of the listed players. So what gives you confidence that almost INR60 billion to INR80 billion will come within this year or you expect any kind of slippage of order inflows to next year and how is the overall bid pipeline looking to you, both from HAM as well as BOT?

Virendra D. Mhaiskar — Chairman and Managing Director

Teena, you are correct that this year we have not seen significant ordering in last 10 months, but if you look at last three years, the order bidding was back-ended towards the fag end of the each year, which we believe this will continue in this financial year also. And if you look at the bidding calendar in terms of NHAI portal, there are four to five bids are lined on single day also. So probably we expect by end of March, there will be lot of ordering happening and we believe that there will be a good order traction until end of March.

Poonam Nishal — President, Corporate Strategy

Just to add Teena, you are right, some of these projects could spill over to the next year as well, the beginning of next year. So to that extent, there could be some overlap. Otherwise, we are talking about the INR60 billion to INR80 billion opportunity within the lined-up projects itself.

Teena Virmani — Kotak Securities — Analyst

And what is the size of total projects which NHAI has lined up, maybe around INR40,000 crore, INR50,000 crore?

Poonam Nishal — President, Corporate Strategy

Roughly that, yes.

Teena Virmani — Kotak Securities — Analyst

Opportunity size?

Poonam Nishal — President, Corporate Strategy

Yes.

Teena Virmani — Kotak Securities — Analyst

Okay. And my second question is related to the scale-up in revenue for Ganga Expressway and even Palsit Dankuni. So now we have seen it is getting reflected in the numbers also. How do you see it in terms of the next year scale-up in revenues from both these projects?

Tushar Kawedia — Group Chief Finance Officer

Teena, execution, basically Ganga has started last quarter, and now the full-way execution will be happening in this quarter. We expect the further growth in EPC execution in Q4 and that will continue till next two to three years, because Ganga anyway we have to execute the INR5,000 crores of EPC order book in 12 quarters. If I divide by 12 quarters also, then that translates roughly INR500 crores to INR600 crores of revenue per quarter coming from the Ganga Expressway.

Teena Virmani — Kotak Securities — Analyst

Okay, got it. And Palsit Dankuni?

Tushar Kawedia — Group Chief Finance Officer

Palsit Dankuni should be in range of INR200 crores to INR250 crores of revenue per quarter basis.

Teena Virmani — Kotak Securities — Analyst

Okay. So overall, in terms of EPC revenues, will there be any kind of lowering down of the guidance on the EPC revenue side for the company, now that the orders are mostly back-ended? So even if something comes in, let’s say, March or April, it won’t be reflected in the revenues at least for the next six to nine months. So how do you see overall EPC revenues going forward?

Tushar Kawedia — Group Chief Finance Officer

I think this year we will be doing EPC revenue of roughly INR4,500 crores. In the next financial year, we will be doing a revenue of close to INR5,000 crores of revenue in the next financial year.

Virendra D. Mhaiskar — Chairman and Managing Director

With the existing order book.

Tushar Kawedia — Group Chief Finance Officer

With the existing order book. And further, this order book is excluding GST. Earlier we used to report revenue including the GST. And from this financial year, the revenue is getting reported excluding the GST. If there would have been 12%, that would have been translated INR5,700 crores to INR5,800 crores of revenue including GST. So as of now, we are not lowering down the EPC execution. We have a visibility, and next year with existing order book, we will be closing at close to INR5,000 crores of revenue.

Teena Virmani — Kotak Securities — Analyst

Okay. Got it, sir. And in terms of your debt on consolidated basis, it will be good if you can share the breakup for both MIPL [Phonetic] Ahmedabad-Vadodara and standalone.

Tushar Kawedia — Group Chief Finance Officer

Sure. So on our debt at Mumbai-Pune is INR6,000 crores and Ahmedabad-Vadodara is at INR2,900 crores, and at the standalone IRB level, plus MRM, including our working capital, it’s close to INR3,500 crores.

Teena Virmani — Kotak Securities — Analyst

This INR3,500 crores is net debt?

Tushar Kawedia — Group Chief Finance Officer

No, this is gross debt. So net debt, if you see, it’s close to INR10,100 crores. Gross debt is at INR13,260 crores.

Virendra D. Mhaiskar — Chairman and Managing Director

And net debt at IRB level will be roughly INR1,200 crores, Teena.

Tushar Kawedia — Group Chief Finance Officer

Yes, that’s right.

Teena Virmani — Kotak Securities — Analyst

Okay, because you have repaid debt during last year?

Virendra D. Mhaiskar — Chairman and Managing Director

Yes.

Teena Virmani — Kotak Securities — Analyst

Got it. My last question is related to toll collections, sir. Would it be possible for you to quantify — I know it’s little difficult to quantify the adjusted toll collection growth for the projects, because different projects got commenced in different timelines and the toll rate hikes were determined by the COD and from four-laning to six-laning and completion of these projects. So would it be possible for you to quantify what has been the adjusted toll collection growth for even the Private InvIT portfolio?

Virendra D. Mhaiskar — Chairman and Managing Director

Teena, Mumbai-Pune, there was no tariff hike. In last nine months, we have seen almost 20% kind of growth on the Mumbai-Pune. And Private InvIT, as you rightly mentioned, different projects has got completed at different times, but there also we have seen a high single-digit on a portfolio basis. Some of the projects have even delivered more double-digit kind of growth on the traffic front. If you look at Solapur Yedeshi and Yedeshi Aurangabad, those projects were operational last year as well and there the growth was more than — almost double-digit on both the projects.

Teena Virmani — Kotak Securities — Analyst

This is the traffic growth?

Virendra D. Mhaiskar — Chairman and Managing Director

Traffic growth I’m talking about.

Teena Virmani — Kotak Securities — Analyst

Okay. And how is the sustainable number looking in terms of the traffic growth for these projects?

Virendra D. Mhaiskar — Chairman and Managing Director

I think the base has now already got corrected and we expect the traffic growth should be in range of 5% to 6% for FY ’24, and I think the similar 5% will be the tariff revision based on the provisional WPI numbers.

Teena Virmani — Kotak Securities — Analyst

Got it, sir. That’s it from my side. Thank you.

Virendra D. Mhaiskar — Chairman and Managing Director

Thank you, Teena.

Operator

Thank you. Next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.

Parikshit Kandpal — HDFC Securities — Analyst

Yes, sir. Hi. Congratulations on a decent quarter. Sir, my first question is on what is the total value of the bids yet to be opened where we have submitted?

Virendra D. Mhaiskar — Chairman and Managing Director

I think, Parikshit, there will be some projects where we have submitted the bid. But as per the policy of the company, we don’t share this data. Once we will become L1 bidder, definitely we would love to share that data with you all.

Parikshit Kandpal — HDFC Securities — Analyst

And sir, is there any change in the Mumbai-Pune Expressway in terms of tariff hike, because this will be the last tariff hike which we will observe?

Tushar Kawedia — Group Chief Finance Officer

So change as such, Parikshit, what you’re talking about on the traffic front?

Parikshit Kandpal — HDFC Securities — Analyst

No, tariff hike. This was only one tariff hike which was applicable on this.

Tushar Kawedia — Group Chief Finance Officer

Yes. So next is due in April 2023, which will be just in couple of months.

Parikshit Kandpal — HDFC Securities — Analyst

That will be about how much, 20%?

Tushar Kawedia — Group Chief Finance Officer

Around 18%.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. That will be the last tariff hike. So then after that the life of the project —

Tushar Kawedia — Group Chief Finance Officer

Yes. That will be the last tariff hike on Expressway, but NH4 will increase by [Technical Issues] every third year.

Parikshit Kandpal — HDFC Securities — Analyst

And just a question on this taxation on the return on capital. How will it — will there be any impact in the Private InvIT eventually when Private InvIT starts distributing — returning capital to the parent and the investors? So how will the taxation happen there?

Virendra D. Mhaiskar — Chairman and Managing Director

I think, Parikshit, there in terms of the expectation, in terms of clarity, it was there that if I buy a unit which has cost of INR100, till I receive INR100, there will not be any taxation, but with the amendment in the budget, it looks like that there will be a taxation if there is a repayment of capital. Redemption of unit, you will get a benefit of the cost of acquisition. But I think there different InvITs are representing through their body at different quora. And I think probably the clarity should emerge within a quarter or two. But, however, as I think InvIT has talked about in their con call, in next one or two years, there will be hardly any repayment which will be happening from our public InvIT.

Tushar Kawedia — Group Chief Finance Officer

And in Private InvIT, the repayment was not due for another next five to 10 years. So as such there is no impact from a Private InvIT perspective as well. But as rightly mentioned by Anil that various associations are representing the case and maybe we can have some outcome in coming months.

Parikshit Kandpal — HDFC Securities — Analyst

But just to understand the current context after the changed amendment — changing an amendment and suppose if it continues, then how will the taxation happen now? So if the Private InvIT distributes the dividend, so it is up from the trust to the IRB level and then IRB distributes it to its shareholders. So how will the taxation now change?

Virendra D. Mhaiskar — Chairman and Managing Director

I think as of now if there is an interest element, the Private InvIT — basically, the taxation will not be a Private InvIT. Interest will be taxable in the hands of IRB. With respect to whatever the dividend Private InvIT will pay, the dividend will not be taxable at InvIT level, but dividend will be taxable at IRB level. And third element is the repayment of capital or redemption of the units. Repayment of capital, which earlier was not taxable, now it will be taxable. Redemption of unit, you’ll get cost of acquisition as a reduction.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. So everything is passed through, but the IRB will be paying the taxes and then after that, it will be — maybe if IRB declares a dividend, it will go to the shareholders of IRB. There won’t be any tax incident on the shareholders of IRB post-absorption of this taxation by IRB?

Virendra D. Mhaiskar — Chairman and Managing Director

Yes. Basically, as of now, the regulation was clearly that only — even before this amendment also, if interest is paid by the Trust, IRB receives the interest, it will be taxable in the hands of IRB.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. Then there was a change, right, that dividend will be taxable in the hands of the investors who receive it? So here in this case, it won’t be applicable?

Virendra D. Mhaiskar — Chairman and Managing Director

Dividend, if the SPV is following the old regime, the dividend will not be taxable. If SPV is following the new regime, dividend will be taxable. Private InvIT, most of the SPVs are eligible for 80-IA. Probably we will be continuing 80-IA or 35AD deduction. Considering that we will be continuing with the old provision. Entering that the dividend will not be taxable in the hands of IRB, whatever the dividend is paid by the Private InvIT.

Parikshit Kandpal — HDFC Securities — Analyst

And neither in the hands of the investors who you will pass through the dividend to?

Virendra D. Mhaiskar — Chairman and Managing Director

Definitely, if IRB — see, IRB has now pays almost 20% of profit as a dividend to the shareholders, which it receives from its subsidiary only. So I think to that extent IRB is getting benefit of that. Apart from that, there will not be any other benefit which will be available to IRB.

Parikshit Kandpal — HDFC Securities — Analyst

Okay sir. Thank you and wish you all the best.

Virendra D. Mhaiskar — Chairman and Managing Director

Okay, thank you, Parikshit.

Operator

Thank you. Next question is from the line of Prem Khurana from Anand Rathi. Please go ahead.

Prem Khurana — Anand Rathi — Analyst

Yeah. Thank you for taking my question, sir, and congratulation on good set of numbers for the quarter. I just want to understand a little better on the order additions that you spoke about, INR6,000 crores to INR8,000-odd crores.

Virendra D. Mhaiskar — Chairman and Managing Director

Prem, your voice is not audible.

Prem Khurana — Anand Rathi — Analyst

Is it better now?

Virendra D. Mhaiskar — Chairman and Managing Director

Yeah, it is better.

Prem Khurana — Anand Rathi — Analyst

Yeah. So I wanted to understand, I mean, when you talk about the INR6,000 crores to INR8,000-odd crore of order additions, so I mean we have time and again identified that our preferred mode is BOT role and then TOT and then hybrid. So this INR6,000 crore to INR8,000 crore, would you be able to break it down into, I mean how much are we targeting in terms of BOT? And also if you could help us understand, I mean, the pipeline or the prospects pipeline that you talk about from NHAI. How many of these would be BOT? So I think you said you’ve already bid for one project on BOT side. But if you were to look at the entire pipeline as of today, how many would be on BOT, how many TOTs, and the balance I am assuming would be hybrid or EPC, if you could help us understand, I mean, the mix that you’re targeting.

Virendra D. Mhaiskar — Chairman and Managing Director

So Prem, I think what we are discussing is EPC book. So whether it comes from BOT or TOT or HAM, the EPC piece of that would be in the range of INR6,000 crore to INR8,000 crores is what we are saying. Now the breakup can change, depending dynamically on what we win, what we don’t win, but the EPC piece among the three of them together should be in the range of INR6,000 crore to INR8,000 crore.

Prem Khurana — Anand Rathi — Analyst

Okay. So we are in different — I mean, as long as we are able to manage EPC, and we are able to generate the kind of IRR that we generate on these assets.

Virendra D. Mhaiskar — Chairman and Managing Director

Yes.

Prem Khurana — Anand Rathi — Analyst

Okay. And sir, second question was on the equity required, so how much would be the equity balance that we need to infuse in all these assets? I mean the hybrids and the Ganga, and then if you could give the year-wise schedule, please.

Virendra D. Mhaiskar — Chairman and Managing Director

Yes. This year close to INR200 crores of equity. Next financial year, close to INR700 crores of equity. And in FY ’25, little less than INR200 crores of equity is required. This is for the existing projects.

Prem Khurana — Anand Rathi — Analyst

Sure. And this is our share, right? I mean, in Ganga we would put in half, or rather 51%.

Virendra D. Mhaiskar — Chairman and Managing Director

Yes. Ganga we will put in 51% and GIC will put 49%.

Prem Khurana — Anand Rathi — Analyst

Sure. And just one last question is a bookkeeping sort of. So when I look at our numbers for last few quarters on EPC side, our tax rate seems to be on a higher side. Where do you see this number to settle down because it’s in excess of 35%-odd? I mean, why would this number be so high? Are there any one-offs in this tax that you report? I think second quarter was 40% and third quarter is around 35%-odd.

Virendra D. Mhaiskar — Chairman and Managing Director

I think, Prem, if you are referring the corresponding quarter of the last year, there was some deferred tax asset recognized, which was one-time kind of impact which was for VK1 and which is not continuing in this quarter. So that has led to some kind of change in the taxation. Anyway, most of the companies are 25% tax bracket. And going forward, considering there are some timing impact, around 27%, 28% should be the taxation rate ideally. But Ahmedabad Vadodara, because of the losses — we have a loss in Ahmedabad Vadodara and because we are not recognizing the deferred tax asset over there, that increases the tax a little bit. So taxation should be in the range of 30%, 32% going forward. And once we get some resolution on Ahmedabad-Vadodara, then thereafter the tax rate should reduce, because once we will get a resolution in Ahmedabad-Vadodara, there will not be any book loss in Ahmedabad-Vadodara. This is what we believe.

Prem Khurana — Anand Rathi — Analyst

Sure. I was talking about the construction segment in particular. I understand on the SPV side you would have these losses, which is where the tax won’t be what you actually pay, but on construction side, 2Q was around 40%, 3Q was around 35% which is higher than the 25%-odd that we generally bake-in in our numbers.

Tushar Kawedia — Group Chief Finance Officer

So this is again what we discussed is on account of the inflation income which comes under the HAM projects. So there what is happening, when we have a HAM income — inflation income, from accounting process, there is no tax because it’s like a notional for us. However, for the other revenue, which forms part of the construction, the rate is 25%. In some SPVs, their rate is as per the old regime, but for the quarter-on-quarter performance, the difference between the HAM account and the BOT, the rate differentiate for us.

Prem Khurana — Anand Rathi — Analyst

No, I’ll take it offline. Thank you. All the very best for future. Thank you.

Operator

Thank you. Next question is from the line of Rohit Natarajan from Antique Stock. Please go ahead.

Rohit Natarajan — Antique Stock Broking Limited — Analyst

Yeah, thank you for this opportunity. Sir, we have given to understand that Hyderabad ORR details should be out by anytime. Any color on that, what was like, I mean, did you participate in it or when do you expect that to be concluded?

Virendra D. Mhaiskar — Chairman and Managing Director

Which bid?

Tushar Kawedia — Group Chief Finance Officer

Hyderabad ORR.

Virendra D. Mhaiskar — Chairman and Managing Director

I don’t think the bid is yet — the date has yet come.

Rohit Natarajan — Antique Stock Broking Limited — Analyst

Almost like, I mean, it was said that by January weekend — I mean, January last week will be out.

Virendra D. Mhaiskar — Chairman and Managing Director

I think it was postponed if I remember right.

Rohit Natarajan — Antique Stock Broking Limited — Analyst

Okay. So is this in your cards as such?

Virendra D. Mhaiskar — Chairman and Managing Director

I can’t disclose that at this point.

Rohit Natarajan — Antique Stock Broking Limited — Analyst

Okay. Sir, the TOT packages, any update on that part, because after the last one bundle, any clarity, any guidance on the new TOT packages that could be there, or will NHAI resort to InvIT route?

Virendra D. Mhaiskar — Chairman and Managing Director

Again, that’s for NHAI to decide. Whatever TOT they announce, we will evaluate and decide our course of action, but very difficult for me to say what NHAI would do.

Rohit Natarajan — Antique Stock Broking Limited — Analyst

Okay. Sir, any guidance on the state highway opportunities, in the form of BOT?

Virendra D. Mhaiskar — Chairman and Managing Director

We keep evaluating. I mean, we believe there would be some opportunities that can come on BOT as well. So like Ganga was a state BOT project and it appeared to be very attractive proposition, so we participated in that. So any such opportunity comes in, we will definitely evaluate that as well.

Rohit Natarajan — Antique Stock Broking Limited — Analyst

So nothing on card at this point in time as we discuss?

Virendra D. Mhaiskar — Chairman and Managing Director

No.

Rohit Natarajan — Antique Stock Broking Limited — Analyst

Okay. Sure. That’s it from my side. Thank you.

Operator

Thank you. Next question is from of Nikhil Abhyankar from DAM Capital. Please go ahead.

Nikhil Abhyankar — DAM Capital — Analyst

Thanks for the opportunity, sir. So if we look at Public InvIT assets, they have started doing way lot better over the year. So is there any chance of higher dividend in the coming quarters or say, next year?

Virendra D. Mhaiskar — Chairman and Managing Director

On the Private InvIT —

Nikhil Abhyankar — DAM Capital — Analyst

Sorry, I mean the Private InvIT, not the Public InvIT.

Virendra D. Mhaiskar — Chairman and Managing Director

So Private InvIT, you will appreciate that majority of the projects have got completed in the last six to nine months and those projects are now in the stabilization phase. And in the coming years, we have also refinanced three of the projects, pushing back the amortization and increasing the cash release. Given this trend, certainly from next year, there would be some good possibility to have a dividending out from the Private InvIT to both the partners.

Nikhil Abhyankar — DAM Capital — Analyst

No guidance as of yet sir?

Virendra D. Mhaiskar — Chairman and Managing Director

See, it’s also incumbent on how the projects perform, what tariff increase we get, how much more refinancing gets done and how fast, but yes, I mean on the numbers, maybe I can give you a guidance on — Anil can give you the guidance on how the numbers look. But certainly, that looks to be a doable thing for the next financial year.

Anil Yadav — Director, Investor Relations

I think we are giving the monthly disclosure. December, we have done a revenue of INR195 crores. If I take a revenue close to INR200 crores of revenue from the Private InvIT asset, for next financial that translates to roughly INR2,400 crores. And if I assume roughly 7% growth, because this is the latest number, then the revenue translates roughly INR2,550 crores of revenue. INR750 crores is the NHAI share. INR1,800 crores will be the net revenue for the Private InvIT, and around INR200 crores is the O&M expenditure. So roughly INR1,600 crores will be EBITDA. Against the INR1,600 crores of EBITDA, there is a delta of roughly INR10,000 crores. And as we are trying to basically do — interest is at close to 9%, 9.5% on average cost of debt. So there will be a surplus available and that surplus can get distributed.

Nikhil Abhyankar — DAM Capital — Analyst

And sir, of the INR5,000 crore EPC, the new guidance for next year, how much will Ganga contribute?

Virendra D. Mhaiskar — Chairman and Managing Director

Ganga will be executed over the period of next two and a half years and roughly INR500 crores to INR600 crores per quarter kind of execution will be happening on Ganga to complete the project within 2.5 to three years — balance 2.5 years. So, I think roughly INR500 crores to INR600 crores of execution will be coming from Ganga.

Nikhil Abhyankar — DAM Capital — Analyst

Understood. And last question, any update on Ahmedabad Vadodara arbitration?

Virendra D. Mhaiskar — Chairman and Managing Director

On Ahmedabad-Vadodara, again, the arbitration has moved forward and it is in the final stages what I can say at the moment, but still at least three, four months of work balance.

Nikhil Abhyankar — DAM Capital — Analyst

Okay, sir. Thanks a lot.

Operator

Thank you. Next question is from the line of Alok Deora from Motilal Oswal. Please go ahead.

Alok Deora — Motilal Oswal Financial Services Ltd — Analyst

Good morning, sir and congratulations on a decent quarter. Sir, just had couple of questions. First, since last few quarters now, we have been talking about some toll projects also coming through from NHAI side considering their stretched finances. And so — but still we don’t see too many of toll projects in the pipeline. So what is the view here, because apart from two, three projects here and there, we’re not really seeing the toll projects coming in any significant way?

Virendra D. Mhaiskar — Chairman and Managing Director

So if I’m right, I think they announced the total number of BOT projects that got bid at NHAI and this year was at least I think three. So one got cancelled, one was awarded to one developer, and the third one is in the bidding stage. So three projects they announced. And I think as they are also seeing improved participation, we continue to believe that the number will keep going up. I mean, I agree that it is at its minimal possible today. So the only way forward from here can be up.

Alok Deora — Motilal Oswal Financial Services Ltd — Analyst

Sure. And also in HAM projects, they were looking to reduce the equity contribution, but in some of the other calls of some other contactors we understand that that is not happening anytime soon now.

Virendra D. Mhaiskar — Chairman and Managing Director

Yes, that’s correct.

Alok Deora — Motilal Oswal Financial Services Ltd — Analyst

Yeah. Any update from your side would be —

Virendra D. Mhaiskar — Chairman and Managing Director

No, that appears to be the case.

Alok Deora — Motilal Oswal Financial Services Ltd — Analyst

Okay. Any reason, sir, for that?

Virendra D. Mhaiskar — Chairman and Managing Director

I don’t know. They might be having enough money, so they don’t need to cut it out. I mean, for a developer like us, it’s a great thing that there will be more money, that’s good.

Alok Deora — Motilal Oswal Financial Services Ltd — Analyst

Yeah. No, I think the idea was to reduce the competition, so I was just —

Virendra D. Mhaiskar — Chairman and Managing Director

See, one thing I am observing this year is the competition seems to have tamed down a bit, because last year you will remember, there was no bid bond required to be given along with each of the bid, whereas this year, there is a 1% bid bond required to be given alongside bid. And when you have so many bids happening in close proximity, certainly everybody tries to — has his own priority list basis which they bid. So the number of participants in each bid has certainly come down. So unlike what we used to see 20, 25 people bidding in each project, now the number tends to range between five to eight or five to 10.

Alok Deora — Motilal Oswal Financial Services Ltd — Analyst

Sure. Just last question, so the interest cost has come down to around INR370 crores or INR365 crores for 3Q. So what would be the run rate going ahead? Could it be at similar number only or could we see further reduction here?

Tushar Kawedia — Group Chief Finance Officer

So this quarter what you’ve seen is the number post repayment of debt, which we did in the fourth quarter of FY ’22. And in next quarter what you will see would be more comparable number where the debt reduction impact would be there. From the first quarter of next year, then there will not be much difference because the repayment of debt has happened in the fourth quarter last year.

Virendra D. Mhaiskar — Chairman and Managing Director

No, but I think if you ask me directionally, you will see that the consol debt in IRB will continue to keep going down, because if I look at the debt profile in IRB, you have debt sitting in the Mumbai-Pune asset, Ahmedabad-Baroda, both the repayment is happening in a strong manner. HAM debt uplifting that would happen will be minimal, only to the extent of 40% of the project size distributed over two years. And secondly, the holding company debt also is going down. So the way forward, consolidated IRB debt will continue to come down as we move forward. It is not certainly going up for sure.

Alok Deora — Motilal Oswal Financial Services Ltd — Analyst

Yeah, of course. Of course. That’s all from my side sir. Thank you and all the best, sir.

Operator

Thank you. Next follow-up question is from the line of Nikhil from DAM Capital. Please go ahead.

Nikhil Abhyankar — DAM Capital — Analyst

Thanks for the opportunity sir. Just a small question —

Operator

Nikhil, sorry to interrupt you. Your audio is not clear.

Nikhil Abhyankar — DAM Capital — Analyst

Am I audible now?

Virendra D. Mhaiskar — Chairman and Managing Director

Yeah.

Nikhil Abhyankar — DAM Capital — Analyst

Yeah. Sir, have we booked profit for VK1 transfer, so it comes out around somewhere INR37 crores.

Virendra D. Mhaiskar — Chairman and Managing Director

VK1, there is a profit on a standalone because the investment was recorded at book value and in consolidated, because the HAM project accounting is done on the basis of Ind AS where one has to account for the receivable from the NHAI upfront, considering that there was no PAT impact on the consolidated accounts, but there was a gain of INR50-plus crores in standalone as you mentioned.

Nikhil Abhyankar — DAM Capital — Analyst

Okay, understood. Thanks a lot. That’s all.

Operator

Thank you very much. I now hand the conference over to Mr. Virendra Mhaiskar for closing comments.

Virendra D. Mhaiskar — Chairman and Managing Director

Yeah. So I think, thanks all of you for taking time out. And it’s the result season but really appreciate all of you finding time and joining us to discuss the prospects of the company in the quarter gone by and the picture, how it is visible at the moment in terms of business visibility going forward. And look forward to see you all again during the next quarter. Have a great day ahead. Thank you.

Operator

[Operator Closing Remarks]