IRB InvIT Fund (BSE: 540526) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Rushabh Gandhi — Chief Financial Officer
Vinod K. Menon — Chief Executive Officer
Swapna Vengurlekar — Compliance Officer
Analysts:
Dhiraj Dave — Analyst
Sourabh Chitare — Analyst
Suneet Dundale — Analyst
Vivek Surreka — Analyst
Vaibhav Shah — Analyst
Mohit Kumar — Analyst
Vivek Purushottamlal Surreka — Analyst
Ashok Shah — Analyst
Satinder Singh Bedi — Analyst
Presentation:
Operator
Good morning, ladies and gentlemen, and welcome to the IRB InvIT Call hosted by the company for discussing the financial results for the quarter ended December 2024. We have with us on the call today, Mr. Vinod K. Menon, Mr. Anil Yadav, Mr. Rushabh Gandhi, and Ms. Swapna Vengurlekar from IRB InvIT team. As a reminder, all participant lines will be in the listen-only mode. And after the opening remarks by the management, there will be a question-and-answer session. Please note that the duration of the call would be 45 minutes and any queries left unanswered after the call can be subsequently mailed to the management for adequate response and resolution. Please note that this conference is being recorded. I now request Mr Rushabh Gandhi to give you an overview of the significant development during the quarter. Thank you, and over to you, sir.
Rushabh Gandhi — Chief Financial Officer
Thank you. Good morning to all. We would like to welcome all the investors and the analysts on the call. Hope you have reviewed our detailed numbers as well as the presentation. During the quarter, we have observed traction in traffic across the portfolio. We have witnessed a notable surge in toll collections driven primarily by robust traffic growth. Specifically, our key traffic corridors have shown significant year-on-year growth, that is 7% traffic growth in case of Chi project, 9% traffic growth in case of project and 5% traffic growth in Telega project. This strong traffic growth underscores the steady expansion of our capping base. The farmer protest in the state of Punjab indeed caused disruptions to the toll collections, including the Pathankur project in the month of November and October. As per the provisions of concession agreement, we are eligible for a relief consisting of 50% reimbursement of interest and operational maintenance cost, plus a corresponding extension of the concession period for the duration of the disruption. SBI filed claims under the 4th major provisions of the concession agreement, PA received compensation for the past disturbances, which further mitigated the impact of these events. Despite these temporary disruptions, we are pleased to announce a distribution of INR2 per unit for the quarter ended December 2024. This distribution comprises of 0.74 per unit in the form of interest, 0.24 per unit as dividend and INR1.02 per unit as retain of capital. Till-date, since the first IPO in financial year 1,718, its cumulative distribution has reached rupees INR4,200 crores which is INR72.35 per unit, more than 71% of the aggregate fund reached during the current quarter ended December 24, dividend has been distributed by MDI SPV. The Fed SPV continues to follow the old tax regime. Accordingly, based on our knowledge, the Fed distribution in the form of dividend shall be exempt in the hands of unit holders. During the current quarter, the investment manager acting on behalf of the Trust received a premium study and non-binding offer from IRB Infrastructure Trust regarding a potential acquisition opportunity. The proposed acquisition encompasses by completed and revenue-generating BOT projects with a weighted-average residual life of 21 years. As per the independent valuers report of IRB Infrastructure Trust, the enterprise value of this assets is approximately INR15,000 crores. The investment manager is currently evaluating this opportunity on behalf of the trust. Now I will present the financial analysis for the quarter ended December 24 as compared with the corresponding quarter of previous year. Despite the temporary dissumption experienced, the total consolidated income for the current quarter stood at INR282 crores as compared to INR283 crores for the corresponding quarter of previous year. The consolidated total revenue for the current quarter stood at INR238 crores as against INR233 crores for the corresponding quarter of previous year. EBITDA for the current quarter stood at INR231 crores as against INR210 crores for the corresponding quarter of previous year. Interest cost, which includes interest on premium deferment for the current quarter stood at INR76 crores as compared to INR69 crores for the corresponding quarter of previous year. Depreciation, which includes amortization for the current quarter stood at INR61 crores as against INR58 crores for the current corresponding quarter of previous year. Profit-after-tax for the current quarter stood at INR91 crores as against INR81 crores for the corresponding quarter of previous year. Now, I will request the moderator to open the session for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. The first question is from Dhiraj Dave from Samvad. Please go-ahead.
Dhiraj Dave
Yeah. Can you hear me?
Rushabh Gandhi
Yes.
Dhiraj Dave
Yeah. Okay. So my first suggestion and kind of request to the management, which has been also done multiple time in past, please upload the presentation on BSE or NSE. Your presentation is uploaded on your website, which is fine. But it means basically we need to take all effort to visit the website and then check again and again and then we come to know it will find time that the presentation is uploaded. It’s actually required by — means you can check with your compliance person is required — is mandatory to be uploading those presentation on BSE and NSE side. Why they are not getting uploaded ID request, please look into it. So that the information is available to all of us on lifetime. One suggestion is that. Second one is, please keep chorus call service for diamond registration — diamond pass registration. It makes life simpler. We need to wait for five minutes and it makes everybody’s life simpler. Everybody is implementing all rate hybrid security listed, you will find chorus call. Only IRB has taken a call that they would not kind of at least when we are facing issue market is not giving us proper discount, at least do whatever is in our control to make things simpler for investors and larger communities so that they can attend your call and kind of it. So my humble request please look into it. And I think in past you had given assurance that, yes, we will upload on BSE and NSE. This quarter, again, I found that being missing. So just wanted management to take care of that part. Unfortunately, didn’t got the time to go through the presentation because just now downloaded it from the website. So the point is that it’s very difficult. What do we expect when we have a call and we don’t have information, do we expect investors just to wait and sit on your website to know that when the presentation is coming. So my humble request, please, please look into this. And I don’t have any question because I can’t go through the material. My apology for that. But please look into that and make sure that I have question next time. I hope you like to answer my question. Thanks a lot. Wish you all the best.
Operator
Thank you thank you very much. We take the next question from Sourabh Chitare, who is an individual investor. Please go-ahead, Sourabh Chitare?
Sourabh Chitare
Yes, sorry. Am I audible?
Operator
Yes. Please go-ahead.
Sourabh Chitare
Yeah, okay. So I’ve got like three, four questions for management. So first thing is regarding those five assets, right, that management spoke about it’s been of course, right? And we are. So,
Operator
Sourabh, your voice is breaking. If you’re in a hands, we request you to use the handset we can’t hear you your voice is cutting.
Sourabh Chitare
Am I audible? I’m using handset, but I’ll get back-in the queue.
Operator
Thank you. We move to the next question. Next question is from Suneet Dundale, who is an Individual Investor. Please go-ahead.
Suneet Dundale
Hi, am I audible?
Operator
Yes, please go-ahead.
Suneet Dundale
Yeah. So I just had two primary questions. One was about a potential timeline for the acquisition of the offer that was given by IRBIT, right? And I would kind of encourage the trust to buy more vehicles for essentially like an asset class that has an expiry date unlike REIT, right? REITs you essentially own the building forever in which you only have the concession period for so many years. So like an encouragement to acquire them earlier and more roads would be encouraged? And second is a suggestion from my side, right, is many people are not yet aware about, right, even though they might be a potential investor. Now many potential investors are driving on these very roads without knowing that there is an investment opportunity. So I come from Bangalore that I see like very close to the tech parks, a big banner about a REIT putup, something like that where you are driving one India first, Road InvIT is encouraged so that more retail investors get to know about this because many people from my own family, I have told them about this and they utilize these very road — very, very often. So just be closing.
Vinod K. Menon
Yes. So I think on your suggestion, definitely we will try to educate the commuters on the road that this road belong to so-and-so invent and we will try to provide adequate information on our toll plaza. With respect to the life, as you rightly mentioned, yes, presently the life of the public invent is only 14 years and if the asset gets added, the weighted-average life will be close to 19 years. So then definitely that’s added weighted-average life to the private inventor sure.
Suneet Dundale
Thank you so much.
Operator
Thank you. The next question is from Vivek Surreka, who is an Individual investor. Please go-ahead.
Vivek Surreka
Hi, good morning. Thanks for this opportunity. Am I audible?
Rushabh Gandhi
Yes, you are audible. Go-ahead.
Vivek Surreka
Yeah. So first question from my side is for this five asset which has been offered. Let’s assume we are going to invest in those assets. So how is the funding look like in — assuming we are buying out all these INR15,000 per loan assets? How are you planning to fund that?
Rushabh Gandhi
So I think the management is still evaluating. And considering the current size of the definitely the entire acquisition cannot be funded through debt. And INR15,000 crores is EV, so that project has roughly close to INR7,000 crores of debt, then it means the equity value is closer to INR8,000 crores. And that INR8,000 crores needs to be funded in the proportion in form of debt and equity. But as of now, we are evaluating once we will finalize the final thing, we will definitely share with the unitholders.
Vivek Surreka
Thanks. And this five assets includes the two assets which were going to be made available to us as per the last one call or these are over and above that.
Vinod K. Menon
So these are the over and above the two — two HAM assets what we have talked about that will be available from the IRB once completed. There are total three HAM assets which will be available to the public InvIT for the acquisition. Two assets was expected that by FY ’25 — sorry, FY ’26 and those will be becoming operational and will be available and one asset may be in the subsequent year.
Vivek Surreka
And if I can ask one more question. Do we have any timelines for this from a management perspective? I know we are evaluating that, but is there any broad timeline by which we would be able to make some decisions around it?
Rushabh Gandhi
Yeah. As the process goes, it requires definitely a retailed evaluation. We have already engaged the independent traffic consultant who is doing the survey and report is expected shortly. And thereafter we will start engaging with the investor. And there are certain regulatory approvals are also required with regard to the lenders approval and all those things. Typically, this process takes around six to eight months’ time, almost two months is already over. We are expecting that in five to six months’ time should be the ideal time one should look to close this transition.
Vivek Surreka
Okay. That’s good to know. And operator, can I ask one more question or should I come back-in the queue?
Rushabh Gandhi
So go-ahead.
Vivek Surreka
Yeah. So in the last call, what I heard from the management was we are looking at DPU increase maybe up to 8.5 to 9% over the next two years. So looking at the current situation, are we in a situation to give any guidance for the next year or we should wait for the first-quarter of next financial year
Rushabh Gandhi
So I think this year, as we have discussed that between 8% and 8.5%, we will be paying close to INR8 in this financial year because there was some almost a couple of months disturbance on the project. We will be paying INR8 rupees. And for next financial year, depending upon whether we are going to acquire the asset or not, depending upon that, we will be probably giving the guidance post Q1 results. By that time we will be finalizing the acquisition also.
Vivek Surreka
Thanks a lot. I really appreciate your patience. I wish you all the best for future. That’s all from my side.
Rushabh Gandhi
Thank you.
Operator
Thank you. The next question is from Vaibhav Shah from JM Financial. Please go-ahead.
Vaibhav Shah
Yeah. Thanks for the opportunity. Sir, firstly, on the traffic growth numbers, you mentioned that Tumkur had a growth of 6%, right? Yes. And Telegaw and Jaipur had 4% and 9%.
Rushabh Gandhi
So Tumkur was 7%, Jaipur was 9% and Telegom was 5%.
Vaibhav Shah
Okay, okay. And sir, secondly on the of Patan court, so there was a disturbance in October and November of roughly two weeks each in both the months. So has there been any disturbance in the month of January and do we envisage any disturbance for Q4?
Rushabh Gandhi
No, I think January there is no disturbance as of now. And we do — as of now, we don’t envisage any kind of disturbance.
Vaibhav Shah
Okay. And sir, secondly, if you look at the like-to-like toll collection growth for the month of — for the 3rd-quarter, it was around 2% mainly impacted due to disturbance in and weak collection in MBR. So how do we foresee the growth in Q4?
Rushabh Gandhi
I think growth will depend upon the economic activity as we have seen a robust growth in three of the projects and ideally if there would not have an impact on investor, that project would have also delivered a robust growth. And MDR is just two years concession life is there. And typically, as of now, we are not seeing much traction between those two cities. And I think there we don’t expect very robust growth. I think maybe a lower-growth as compared to the 100%. But on overall portfolio basis, if GDP does 6%, 6.5% kind of India GDP does 6% to 6.5%, ideally, we should be able to reach around 5.5% to 6.5% kind of traffic growth.
Vaibhav Shah
So ex of and MVR, the other three projects, we can expect the growth to remain similar in Q4 as it was in Q3?
Rushabh Gandhi
Yes.
Vaibhav Shah
Okay. Thank you, sir. Those are my questions.
Vinod K. Menon
Thank you. And just just to add one point on numbers, sir, Patal. I think whatever the number of days were disturbed — disturbed due to the agitation. I think there is adequate provision, as Rushabh has covered in his opening remarks that there is an adequate compensation available in terms of the concession agreement, which includes 50% of interest and O&M, an equivalent number of days extension in the concession period. So that basically mitigates the losses. And on IRR prospective also, it’s IRR neutral
Vaibhav Shah
Okay. Okay, sir. Thank you.
Operator
Thank you. The next question is from Mohit Kumar from ICICI Securities. Please go-ahead.
Mohit Kumar
Yes, good afternoon. Sir, two questions from my side. One is what is the expected tariff hike here from upgrail FY ’20 — April ’25 on the roads?
Vinod K. Menon
I think it is expected in range of 2.5% to 3%.
Mohit Kumar
Okay, that’s true. My second question is on the on the — you said that you’re looking to acquire — you’re looking to acquire the five assets. Is there a potential chance of acquiring only few assets only with the debt?
Vinod K. Menon
Mohit, as of now, the offer is for fireside. But as you know that the process itself takes six to eight months’ time and there are lot of approvals and regulatory approvals are required. So probably it will make a more commercial sense to acquire the bundle because it’s presently the assets are offered in the bundle itself.
Mohit Kumar
Understood, sir. Thank you and all the best. Thank you.
Operator
Thank you. The next question is from Dhiraj Dave from Samvad. Please go-ahead.
Dhiraj Dave
Yeah. Thanks a lot for providing opportunities once again. My one question is basically, am I clear? Can you hear me?
Vinod K. Menon
Yes.
Dhiraj Dave
Yes. What is the kind of payment? Do we have made any payment to NHAI for the deferment premium in the Tumkul during FY ’25?
Rushabh Gandhi
No, we have made the premium payment as per the concession that to explain we are making the payment as per debt.
Dhiraj Dave
Okay. So how much was the cash outflow because of that during FY ’25 or Nine-Month FY ’25
Rushabh Gandhi
It will be close to INR200 crores.
Dhiraj Dave
It would be INR200 crores. And do we expect a significant jump-in FY ’26 on that item?
Rushabh Gandhi
It will depend upon the cash surplus available at the SPV for next year.
Dhiraj Dave
Yeah, fair enough. So based on that cash surplus, we will adjust and kind of it. Second request would be, basically in the presentation when we get three months NCDF and Nine-Month NCDF, actually speaking, we can’t compare. So basically, it would make sense to last year also so that we can compare it. Otherwise, I need to open previous presentation. So just one suggestion is also included base of last year, so that we compare them. Otherwise, just isolated Q — Q3 and Nine-Month FY ’25, like you can’t infer much from those two numbers. So one request would be there. Even on the results which you submit, you submit Q for this year, like for example, March, you will submit the six-month reason. Now I don’t know why only India does — sorry, why IRB invite does it? All gives you like as it happened in listed company, quarter-on-quarter as well as Nine-Month to nine months or Six-Month to six months and then full-year. I don’t know why we — means basically means you are such a good company and you are doing fabulous job of distributing INR8 rupees and kind of it. I think somewhere we need to build-on all these small points and the last observation which I had is MD has said that the delay in is going to be IRR neutral. I just want to say we are distributing INR8 rupees on price of INR62 or INR63. The cost of us is INR13 opportunity cost, it’s not whatever is your cost of funding. So any kind of delay, delay actually speaking, unless we becomes a kind of — our NAV and trading price comes neutral that from market perspective, while you are right on accounting perspective that your cost is 9% and you will be getting 9%, but the real cost of borrowing in-market terms is 13% 14% because unit is trading at discount to NAV. So your IRR, anything delay is actually is going to — it’s going to be positive if you are trading at more than NAV from market perspective. But if it is trading at NAV to discount to NAV, then it is negative for us. So we should be — either we try to improve our NAV above that and then we are very happy because then what’s MD is saying I’m completely in agreement. At NAV of premium to NAV, what we are gaining is any delay is good for us. But when situation where we are, when we are carrying discount to NAV, it is very critical for us to get cash-flow because we would discount at 13% 14%. Our at least market will discount at 13% 14% for us and not at 9%. So that’s just one observation. Please take that in mind. So basically, we are not happy to delay because that’s going to kill our NAV. In fact, it will end further discount to where it might be.
Rushabh Gandhi
Just to inform you that the IRR on the — typically when I say that IRR, typically these projects are bidded at 16% to 18% kind of IRR. So then when it comes to the NHI for them, that 16% to 18% IRR is the threshold at what the first financial model is submitted to that. So when we are talking about the IRR, it ranges from 16% to 18%, not at 8% or 9%, what is the cost of good.
Dhiraj Dave
Okay. And just a last thing, like this HEM asset which we acquired, actually speaking, has it performed as per because I don’t find any addition, while I understand there has been some disturbance in and it would have taken cash outflow, but the point is that HAM asset, how much — did it perform as per expectation of management, the key Hem asset.
Rushabh Gandhi
So basically the HEM asset has been providing the annuity income as per the scheduled plan and they have been the trust. However, because of the disruption in the project, the debt has been netted out. That’s the issue.
Vinod K. Menon
So just on — just to basically provide some more information on the HAM asset, where we have evaluated that HAM asset, that time the bank rate was on a lower side and thereafter there was increase of 50 basis-points in the bank rate. And that interest which we received from the NHAI, that has moved by 50 basis-points. In fact, the project has performed better than what we have expected at the time of acquisition. Just to add-on your first, sir, regarding the NDCF, so has changed the format of NDCF in current financial year. That’s why we could not provide that comparison. But maybe from next year onwards, definitely will have.
Dhiraj Dave
Yeah, but sir, if you look at all REIT invite all across. Maybe would have changed for everybody. So at least you can put a note. See, that’s fine that last year there was a different disclosure or something, whatever kind of it. If you — because this becomes — otherwise what happens is that information I get, now I need to look at Q2 and then you are saying that the definition is changed and again, we are in soup, right? We cannot even compare that base is also different. So in fact, you are the best people, whatever is best disclosure, you would be the best person to take a call, but do give comparative because whether there is a growth, de-growth, how do we know?
Vinod K. Menon
Sure. We take your suggestion.
Dhiraj Dave
Sure. Thanks. And do we have any last question before I — do we have any reserve kind of any reserve on the — means we distributed almost 100% of NCDF or we kept some buffer
Rushabh Gandhi
So the retail would be close to INR25 crore INR30 crores.
Dhiraj Dave
Okay, fair enough. Thanks and thanks for patiently hearing and answering my question. Wish you all the best.
Operator
Thank you. The next question is from Vivek Purushottamlal Surreka, who is an Individual investor. Please go-ahead.
Vivek Purushottamlal Surreka
Thanks for taking my follow-up question. Just following from the last question. So our current cash surplus is 23% overall or that is just for this quarter?
Rushabh Gandhi
So can you just repeat your question?
Vivek Purushottamlal Surreka
Yeah. So my question is on the cash surplus which we are holding. It’s overall INR23 crore or that is only for this quarter.
Rushabh Gandhi
So INR25 to INR30 crore will be cumulative apart from the DHR and MMR ratio which we have. It’s apart from that.
Vivek Purushottamlal Surreka
Okay. Thanks. Another question is like our current net-debt to equity is 0.3, which is quite good. So assuming we are not raising any new equity portion of this. So what is the additional buffer which we have for acquiring new assets?
Rushabh Gandhi
It will be close to 3.5 hours.
Vivek Purushottamlal Surreka
Sorry, can you repeat that? It was not very audible hello. Hello.
Rushabh Gandhi
Yeah, can you repeat your question?
Vivek Purushottamlal Surreka
Yeah. So our current debt-to-equity is 0.3. My question was what is the additional buffer we have to acquire new assets without raising equity?
Vinod K. Menon
So I think as of now, the debt is close to, 25% 27%. We can go up to 49%, but still we have INR2,500 crores to INR3,000 crores kind of buffer.
Vivek Purushottamlal Surreka
Okay. Thanks. And that’s all from my side. Thank you.
Operator
Thank you. Next question is from Sourabh Chitare, who is an Individual investor. Please go-ahead.
Sourabh Chitare
Hello, am I audible now?
Rushabh Gandhi
Yes. Please go-ahead.
Sourabh Chitare
Yeah. Sorry about previous calls. So I got couple of questions. One is, what is the rate of interest that we are paying for the debt? Close to 8.7%, 8.7%. And considering that we are AAA-rated and everything seems to be like balance sheet and everything is of highest-quality. Kant, was there — because the — I’m just comparing with the other, they are paying close to 8.15. So is there — I mean, and we also did a refinancing, right? So is — was there any opportunity that we have not maybe have missed or something on those lines or it’s like this is the rate — that this is the best rate that we got
Rushabh Gandhi
So our interest-rate is linked to. So as and when the MCLA duty, we’ll get that benefit. So at one point in time, our interest-rate was close to 7.25%.
Sourabh Chitare
Okay. Okay. So it’s not — okay, it’s not fixed-rate. And okay. So in that how much is fixed and how much is variable or everything is variable?
Rushabh Gandhi
Everything is linked to NCLR. Yeah.
Sourabh Chitare
Okay. Got it. And okay, my other question was, if I look at Slide number 16 in presentation, right, in that I can see that the cash earnings per unit is INR7.8 for nine months for FY ’25, right? So for my understanding, as per the model, the model, 90% of the profit should be distributed out. So which components are getting added here? Obviously, we are all like we are distributing 6%, which does not come to 90%. So which — which other things that needs to be excluded or I shouldn’t be looking at that at all.
Rushabh Gandhi
It will be the profit-loss account. Basically premium payment is not coming out so what we are seeing of INR200 crores of premium payment for nine months, that will need to be excluded.
Sourabh Chitare
Okay. Got it. Got it. So premium payment does not come here. All right. Yes. Okay, cool. Thanks a lot. All the best.
Operator
Thank you. Next question is from Ashok Shah from Eklavya Invesco Family Office. Please go-ahead.
Ashok Shah
Thanks for taking my question. Sir, as per five asset has been offered by the parent. So can you just throw some — any figure or figure of what will be the investment and how it will be profitable or if you can give some idea about it? Thank you.
Rushabh Gandhi
So I think, sir, based on the publicly available information, the total asset value is around INR15,000 crores. And out of that roughly INR7,000 crores is debt and then the equity value which are supposed to be paid to them is close to INR8,000 crores. This is the based on the last valuation report. We are doing our own evaluation. We have appointed the independent traffic consultant. And based on our review and analysis, we will be finalizing the price to be paid to the private-equity. And once sir, we decide the broad contours, then definitely we’ll be able to provide more detail on the same. As of now, sir, we will be only able to share the broad details on the assets.
Ashok Shah
So this private Invy is itself from the IRB private itself or it’s from the parent side.
Rushabh Gandhi
So it’s from the private where IRB owns 51%, government of Singapore owns 25% and owns 24%. These are the three investors in the private. They are offering these assets to the public and once the — we will evaluate that and put up to the Board. And once Board agrees for the same, then the same will come for the unitholder approval.
Ashok Shah
Sir, this asset which was actually our system first year in. So parent had not offered this to us and it was converted into private InvIT by some offer to the other investors. And again, debt in which is selling to us, so why such a route is taken and not directly it is given to us.
Vinod K. Menon
Very good question, sir. It’s a private is a development platform. When these assets were first was won by the IRB, those were under-construction. Those were not revenue-generating. And as per regulation, those would not have been formed part of the public. And accordingly, those projects were part of the private where IRB and GIC has invested initially and thereafter Group has joined the private. Once the asset has become matured and can be now offered to the public. Private Invoid has offered those assets to the public.
Ashok Shah
So this is the — let us offer. Earlier, I think we had acquired something — some asset, I think three, four years back by taking some loans. So does that asset is also per net level profit-making or it’s still in loss?
Vinod K. Menon
And after that, I think I have covered that in my previous question also, that asset is performing based better than what guidance we have provided and that asset is contributing payout to the unit.
Ashok Shah
Okay. So earlier interest-rate 7.7% approximately has increased to 8% plus interest-rate, but still it’s making profits in the.
Rushabh Gandhi
Yes. Thank you. That’s all from my side. Thank you.
Operator
Thank you. The next question is from Satinder Singh Bedi from Eon Infotech Limited. Please go-ahead
Satinder Singh Bedi
Yeah, good morning. Thanks for the opportunity. Sir, my question was regarding the distribution. So now the distribution at is undergoing a change in the sense that it is becoming a more tax-efficient because of the dividend component and the capital reduction. So what’s the indicative breakup of the distribution for FY ’26? Like what percentage ballpark should be dividend and what percentage could be reduction in capital please indicative for FY ’26.
Rushabh Gandhi
Sir, for FY ’26, as of now, we’ll not be able to guide because there are high assets are getting added, then definitely those will change the dynamics of the payout. But however, for Q4, we expect similar kind of distribution and similar kind of breakup, because MDR is on the end-of-the concession and that project asset is generating book profit. So that will continue to give the dividend, distribute the dividend. And that dividend considering the asset is in old tax regime will be exempt in the hands of unit holders.
Satinder Singh Bedi
Okay. Okay. So that clarifies, okay. And this debt the debt, I assume it will be linked to — it will be a floating-rate, okay. So what’s the reset? So in case like February 7, the anticipated repo rate cut happened. When will the benefit of this start touring to us on the cost side, please?
Rushabh Gandhi
Our interest-rate is linked to three months of MCLR. So as and when we get that benefit, that benefit will be passed on to us. It’s a three-month MCLA.
Vinod K. Menon
So, sir, to answer more specifically with respect to whether there will pass-on as and when the bank will cut the MCLR, we will get the benefit at the regular interval.
Satinder Singh Bedi
Okay. So our next reset would be 1st of April, I assume. Is that correct understanding?
Rushabh Gandhi
Yes. Yes, again.
Satinder Singh Bedi
Okay. Okay. And you are Jaipur Daoli and Tompur are showing handsome traffic traction. So do we expect that to continue going-forward or any challenges we see there, okay, because we’ve seen a good growth in the last few months now.
Vinod K. Menon
We expect a similar growth to continue and basically there is no challenge I think continuing that growth.
Satinder Singh Bedi
Okay. And on Talega,, sir, has it come back so there was that the fly over or whatever which was getting built-up, because still has seem slightly on the weaker side so is all the interruption over or is some part still left.
Vinod K. Menon
So portion of that part is completed and that can be seen from the toll collection also. So the average for the month of December was better as compared to earlier period.
Satinder Singh Bedi
So yeah, okay. Okay. Finally, sir, on the — like, like — so there is a compensation metric. So could you just amplify, you did mention it earlier. Could you just amplify — so what is the compensation mechanism? It is extension by equal number of days plus 50% of
Rushabh Gandhi
O&M cost and the interest cost.
Vinod K. Menon
That will be to the extent of 50% and extension 100%.
Satinder Singh Bedi
So 100% and 50% of what’s sir, I couldn’t get that. 50% of the
Rushabh Gandhi
Operational maintenance cost along with the increased costs. Yes, finance costs.
Satinder Singh Bedi
Okay, okay. 50% of O&M, 100% of finance cost and equal expansion — equal expansion. Is that a correct understanding?
Rushabh Gandhi
So 50% of operational maintenance cost, 50% of finance cost and 100% of extension and concession period.
Satinder Singh Bedi
Okay. So that’s very clear. Thank you very much and wish you all the best for your — for your acquisition. Thank you.
Operator
Thank you very much. We’ll take that as the last question. I would now like to hand the conference over to Ms Swapna Vengurlekar for closing comments.
Swapna Vengurlekar
Thank you all for joining on this call. We appreciate your participation. If you have any further questions, please don’t hesitate to reach-out to us. Thank you.
Operator
Thank you, ma’am. Ladies and gentlemen, this concludes your conference for today. We thank you for your participation and for using Research by its conferencing services. You may please disconnect your lines now. Thank you, and have a great day-ahead.