Kiri Industries Limited (NSE: KIRIINDUS) Q2 2025 Earnings Call dated Nov. 14, 2024
Corporate Participants:
Manish Kiri — Chairman and Managing Director
Analysts:
Nupur Jainkunia — Analyst
Suresh — Analyst
Yash — Analyst
Arun — Analyst
Pradeep Rawat — Analyst
Manoj Bhura — Analyst
Vivek Joshi — Analyst
Aniket Gara — Analyst
Prakash — Analyst
Suyesh — Analyst
Ayush — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Kiri Industries Limited Q2 and H1 FY ’25 Earnings Conference Call hosted by Valorem Advisors. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Nupur Jainkunia from Valorem Advisors. Thank you, and over to you, ma’am.
Nupur Jainkunia — Analyst
Thank you. Good morning, everyone, and a warm welcome to all of you. My name is Nupur Jainkunia from Valorem Advisors. We represent the Investor Relations of Kiri Industries Limited. On behalf of the company, I would like to thank you for all participating in the company’s earnings conference call for the second quarter and first half of financial year 2025.
Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such results are based on management’s beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place undue reliance on these forward-looking statements and making any investment decisions. The purpose of today’s earnings conference call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review.
Now, I would like to introduce you to the management participating with us in the conference call. We have with us Mr. Manish Kiri, Chairman and Managing Director of the company; Mr. Jayesh Hirani, VP, Finance and Accounts; and Mr. Suresh Gondalia, Company Secretary.
I would now request Mr. Manish Kiri to give us his opening remarks. Thank you and over to you, sir.
Manish Kiri — Chairman and Managing Director
Thank. Good morning, everyone, and welcome to the earnings conference call for the second quarter and first half of the financial year 2025. I hope you are all keeping safe and well. To start, I’ll provide an overview of the financial performance for the second quarter of FY ’25, followed by the operational highlights. On a standalone basis, revenue from operations during the quarter under review was INR146 crores, a 4% decline year-on-year with an EBITDA loss of INR3 crores and net loss of INR21 crores. The total revenue for quarter two FY ’25 decreased due to a decline in dye intermediate sales resulting from reduced demand and lower price realizations in dye segment.
Operational expenses saw a 4.6% increase in power cost this quarter. Other manufacturing expenses were in line with the previous quarter, mainly due to close monitoring while higher freight and legal costs contributed to the negative EBITDA this quarter compared to the previous one. Please note that the legal cost in this quarter continued to occur at a higher level. For the first half of FY ’25, standalone revenue from operations were INR313 crores, representing 7% year-on-year growth, while an EBITDA profit of INR11 crores and net loss of INR23 crores post depreciation.
On a consolidated basis, revenue from operations for the quarter under review was INR272 crores, representing an 18% increase year-on-year with EBITDA of INR22 crores and net loss of INR13 crores before the share of profit of associates before consolidating DyStar. For half one FY ’25, consolidated revenue reached INR537 crores growing 17% year-on-year with an EBITDA of INR40 crores and net loss of INR15 crores before share of profits of associates. Operational expenses increased by 8%, mainly due to very high legal cost associated with litigations against Senda International Capital in Singapore courts.
Other income included increased earnings from other joint ventures, Lonsen Kiri Chemical Industries Limited. Regarding the DyStar case, Kiri had filed an appeal against SLCC order dated May 20, 2024, which did not award interest on the buyout amount to Keri. Senda also filed an appeal regarding the awarding of priority payment to Kiri from the proceeds of sale of DyStar. The appeal hearing at the Court of Appeal was concluded on November 12, 2024 and the judgment was reserved. Furthermore, Senda International Capital has agreed to pay legal cost and disbursement owed to Kiri along with interest in SIC4 and related appeals, including the principal amount and applicable interest at 5.33% per annum until the payment is made. Senda has already given pre-revocable instructions for this cost to be paid directly to Kiri from Senda share of [Indecipherable] proceeds from Kiri and Senda shareholding in DyStar Global Holdings Limited.
The En Bloc sale process is being conducted by Matthew Stuart Becker, Lim Loo Khoon and Tan Wei Cheong of Deloitte & Touche LLP who have been appointed as a joint receiver and the process is proceeding according to the schedule and the timeline provided by the receiver to the court.
With that, we can now begin the question-and-answer session. Thank you.
Questions and Answers:
Operator
[Operator Instructions] The first question is from the line of Suresh from Burism [Phonetic] Financial. Please go ahead.
Suresh
Good morning, sir, Manish, sir. Suresh from [Indecipherable] Pradesh.
Manish Kiri
Yes, Suresh ji. Yes, yes. We know you well. Please go ahead.
Suresh
Sir, En Bloc sale tenders inviting date or any details you can mention last time conference call. Any update yet, sir?
Manish Kiri
Yes. So the timeline has been now decided, presented and committed and the non-binding offers would be due on November 22, 2024, which is next week and binding offers to acquire DyStar would be due by end of January. During this time, 2.5 months, the detailed due diligence of Phase 2 would be conducted by prospective buyers. Already there has been a lot of interest presented by the prospective bidders and Phase 1 due diligence is going to get completed by next week. And assuming that by January end the binding bids are coming in, then February, March, we are expecting the sale purchase agreement to be executed and sale of DyStar to be concluded.
Suresh
Sir, after completed the agreement, you can fund — received fund how much time take, sir?
Manish Kiri
I think the execution of agreement and tendering our shares or giving our shares to a new buyer will happen simultaneously. So shares would get exchanged with the payment against the share. So I don’t think it will take more than two to four weeks. So we are highly hopeful that before the end of this financial year, which is 31 March, 2025, we can expect the inward funds from sales proceeds.
Suresh
Sir, next you can buy back any shares in the open market or only preferential issue, you can increase the sake? Any open market…
Manish Kiri
The preferential issue has already been made which you know, the announcements have been made. Warrants have been issued only to the promoters. And there is no plan currently to buy anything from the second market by the promoters because promoters do not have that much of room. Promoters doesn’t have more than 5% ability to purchase in secondary market. So no, it’s not possible also legally. Thank you.
Suresh
Okay. Any mutual funds buying happen in the Kiri interested?
Manish Kiri
I think several funds what we have seen and you would also be able to see from the list of shareholders that we see the new funds, new FPIs are coming in. So we see the participation increasing currently.
Suresh
Sir, another question. Actually you can propose the new copper plant and fertilizer plant. We can — environmental clearance is coming, sir. Copper plant is clear.
Manish Kiri
It’s clear.
Suresh
In future projects, copper plant is clear the environment is clearing.
Manish Kiri
Yes. Yes, completely clear.
Suresh
Completed. It will start the company further update…
Manish Kiri
We are — the implementation of project will start very soon and next quarter or a quarter after onwards when we are in the process of building the plant, electing factories and executing the project, we will definitely keep you updated on our quarterly announcements. We’ll definitely do so. If there is any significant event in between, also we’ll be pleased to announce. But the company is already in the process of implementing the project and the required steps, actions have already been taken to start that new plant as soon as possible at the earliest in 2026 for the first phase.
Suresh
I’m telling you November 22 En Bloc sale update, you can inform the exchanges.
Manish Kiri
Yeah. We see the — we will reveal the communication which we receive from the receiver. And based on the communication that we receive, we’ll be pleased to do so. Thank you. Yeah.
Suresh
Okay, sir. Thank you. Thank you, sir. Best of luck.
Operator
The next question is from the line of Yash from Dante Equity. Please go ahead.
Yash
Yeah. Hi, am I audible?
Manish Kiri
Yes, right. Please go ahead.
Yash
Yeah. Just wanted to understand a couple of things, right? Especially with the preferential issue that you’ve done, I just wanted to understand for a conviction, just to understand your conviction on the company itself, what percentage of your net worth have you deployed through the preferential issue because it’s a substantial amount of money, right?
Manish Kiri
Yes.
Yash
Yeah. So what percentage of your net worth have you deployed into the preferential issue? I’m trying to understand the conviction. I’m trying to understand your conviction on the company itself because you’ve doubled your stake.
Manish Kiri
Yeah. What we did is whatever personal assets which we had, besides our house, everything has been put into. We are double down by investing everything which promoter had in the company.
Yash
But are these shares going to be pledged? Have you taken out bank loans to finance this? Because pledge shares are…
Manish Kiri
No. There are no shares pledged. Let me clarify, there are no shared pledged of promoters. Nothing has been pledged, okay? And if you — just by growth — if you do — so there are no shares pledged. There is a commitment given to the lenders for the new project by the promoters that they would not reduce this to, right? So the announcement which we have made is the commitment from promoters not to reduce the stake and no pledge of any shares of promoters have taken place. So that also clarify. Number one. Number two, the $130 million has been raised in Singapore, out of which both expenses paid, $120 million is as we speak now would be invested into copper project and we are already in the phase of executing that project since last three weeks in fact, right? So we are investing and saving one year to start the new facilities earlier. So for that the borrowing was made by the Kiri subsidiary in Singapore and that subsidiary has injected a permanent capital, FDI into copper project which is Indo Asia Copper Limited, right? So there is an equity infusion which has already been done by Kiri subsidiary to kick start the new growth project that we have confirmed.
Yash
So how have you raised that money? How have we raised that money, is it a loan?
Manish Kiri
So that’s the money which has been raised as an advance against the judgment order. So there are funds in Singapore which have done judgment funding to Kiri subsidiary and that is against the judgment order.
Yash
So if anyone is going to do a judgment funding, they are pretty sure that you’re going to get the money, right? Is that the correct assumption?
Manish Kiri
Exactly, that’s the correct exemption. So when they have done judgment funding, they have gone through the legal diligences. They came to the conclusion that it’s only a matter of time and Kiri is going to get money very soon. So when they got this confidence, there were four funds in Singapore which were prepared to give judgment funding to Kiri and we availed from two funds. And there was legal due diligence, detailed due diligence conducted by these funds when they came to conclusion that the money is secure for Kiri.
Yash
Right. And also in your P&L, you’re getting some sort of associate profits. Those are not cash profits, right? Those are just book entries, right? Can you clarify that?
Manish Kiri
No. These are the — as I mentioned earlier, the associate profits are only book entry. Kiri is not entitled to any profit of DyStar and any economic interest of DyStar, correct? So it’s only because Kiri continue to hold shares of DyStar. Statutorily we are required to consolidate the associate profit, but there is no liquidity which relates to that.
Yash
Right. Last question, you’ve hired somebody from Birla, right, from Aditya Birla or Birla Corporation. I’m not sure. Can you throw some light on that, like who you’ve hired, what is their background? When are we going to hear them on con calls? What is their role, etc, etc?
Manish Kiri
Yeah. So right. So we have hired Dr. Sanjay Sarkar who is basically leading the copper project. He is the CEO and Executive Director of Copper Project. He has come along with key management team who have long experience in copper and he was Chief Operating Officer of Birla Copper for more than 10 years. And then before he retired, he was a board member of Hindalco. So very long years in copper and very knowledgeable and expert in the field which we have taken on board to execute, operate and run this sector and run this business sector for Kiri.
Yash
Right. I definitely have more questions. I’m just going to come back in the queue out of respect for the other participants. Thank you.
Manish Kiri
You’re welcome.
Operator
Thank you. The next question is from the line of Arun from Grow Capital. Please go ahead.
Arun
Yeah, good morning. Thanks for the opportunity. Just wanted to check, you have taken the warrants and diluting the existing shareholders. Will this also trigger the open offer?
Manish Kiri
No, it doesn’t trigger the open offer.
Arun
Because the stake will go beyond 5% — will increase beyond 5%.
Manish Kiri
No, the warrants are converted over a period of 18 months which covers three financial years.
Arun
Okay. So okay. So you [Speech Overlap] in such a way that it doesn’t trigger the open up.
Manish Kiri
Yeah. So it doesn’t trigger and conversion will take place over a period of 18 months.
Arun
And any reason why you didn’t give this opportunity to the existing shareholders, diluting the existing shareholders?
Manish Kiri
I think the existing shareholders’ opportunity would be entitled for the rights issue and Kiri’s Board didn’t feel it appropriate right now to have that much of capital required to do a right issue. But in future, if need arises, definitely would consider.
Arun
Yeah, because my only submission was sir, that the company did not require capital because anyway it is expecting capital of $600 million. So there was no need to raise capital. Anyway. Second question was, sir, what is — are we inclining towards strategic or a financial investor? That’s part one. And second, you mentioned about the status of appeal. I think there was some disturbance. Can you repeat what is the status of the Senda’s appeal in the court?
Manish Kiri
Yeah, sure. So there was appeal hearing took place on November 12 where one day hearing took place with the same judges who have heard Kiri’s cases in court of appeal earlier. Senda first argued on the priority payment to Kiri to overturn the priority payment and Kiri made arguments for the interest, post judgment interest because post judgment interest has not been awarded to Kiri and we strongly believe that we deserve a post judgment interest at least. So there was a one day argument in which we strongly believe that the possibility of overturning the priority payment to Kiri are extremely less, while we are very hopeful that the court would do justice and award interest to Kiri post judgment post March 2023. So when the outcome comes of this appeal in the next few months, we are expecting based on the prior experience that the judgment should be out by January beginning 2025. And if Kiri is awarded interest that would be overturning the SICC’s decision not to award interest to Kiri. And depending on what interest rate cost is deciding, it may add somewhere between $60 million to $100 million on the current award. So all court trials have been completed now or all court appearances for Kiri has been concluded and no more cost submissions would be required now.
Arun
Got it. And any intimation towards strategic or a financial investor, a PE kind of a guy…
Manish Kiri
You mean for the new project?
Arun
No, for the bidding with the Deloitte…
Manish Kiri
For the bidding, see, for the bidding, there are multiple participants. A huge number of interest came for the exploration of interest. The numbers went about 70, right and now when the non-binding begins next week I think the participants are going to be — based on my own opinion, at least more than 20 to go to the next round of detailed divisions. The interest is very high. DyStar has now by end of September filed up to $607 million cash and it has touched $1 billion of net current assets. Looking at this financial strength, it looks like there are many financial private equity investors have jumped in.
Arun
Sure. That’s wonderful to hear. And lastly, what is the status of the DyStar financials this year? How has the P&L been behaving?
Manish Kiri
I think if you look at the first nine months, $90 million is the beta. And at the same run rate when the year ends in December, it can touch to about $120 million of beta this year. And this is post the taking out management fees, post they are extracting related party transactions and post all kinds of fees that they expect out. So it is post that. The reported numbers could touch close to $120 million.
Arun
Sure. Thank you. Thank you, sir and good luck for everything.
Manish Kiri
Thank you.
Operator
Thank you. The next question is from the line of Pradeep Rawat from Yogya Capital. Please go ahead.
Pradeep Rawat
Yeah. Good morning and thank you for the opportunity. So I have first question regarding the borrowing that we have increased. So what was the interest cost for the borrowing?
Manish Kiri
The interest cost is about 15% on the borrowing which is back ended, which would be paid back along with these interests from the sale proceeds of that.
Pradeep Rawat
So it would be concluded once we get the cash proceed from DyStar.
Manish Kiri
Correct. There is no debt serving required, there is no payments required, it gets concluded. So essentially it is an advance against the judgment order.
Pradeep Rawat
Okay. And what is the planned capex for this financial year?
Manish Kiri
This financial year, we will see how much we are able to deploy out of total close to $120 million, but I assume that it would be at least half of that $60 million we should be able to deploy before the end of the year.
Pradeep Rawat
Okay. So I’m assuming that we have raised $120 million and we have to — we will pay back this once we get the amount. So the amount would be — we will receive the amount by March 2025. And we have at now planned to invest only $60 million. So my question is, why have we raised so much money, $120 million as we have planned only $60 million as of now?
Manish Kiri
No. The $60 million we would be able to deploy, right? But whatever funds we have raised, $130 million, out of that $120 million would be deployed in the new project. Part this year, part next year financial year because we don’t know at this time how much suppliers we would be paying advance, what kind of machinery we would be tying up, right? So essentially the funds have been kept to make sure that we don’t have at least for one year short of cash when we start the project. We don’t want to start the project if something goes wrong and you are halfway hanging there, right? So we have secured the amount. We could have raised up to $200 million, right? But the first phase of the investment where Kiri’s equity requirement would be $91 million. So looking at this $91 million to be precise, we have now ability to invest $120 million and that would allow us to have our one product line operational by 2026.
Pradeep Rawat
Yeah. Okay. And what I understood that $90 million is the requirement for capex. Is that correct?
Manish Kiri
Yes, correct, $91 million, correct.
Pradeep Rawat
Okay. So we raised $120 million and in addition to that, we have cash from warrants, so it is approximately INR300 crores.
Manish Kiri
Yes. So right. So if you look at now balance sheet of Kiri on the next quarter, as per the requirements, as per the warrants, all the debt of Kiri is paid off, right? So by close to INR150 crores of debt which we had on the books, everything is going to go away next quarter results, all paid off, finished, right? So Kiri’s would be completely clean balance sheet, debt-free balance sheet going forward. And not only that with accumulated losses, you have seen that the working capital was stretched and our quarterly news readers also highlighted the crucial issue of working capital. So we have strengthened our working capital and funded another INR100 crore plus only in the working capital.
So that would help to improve the profits of the existing business also going forward. So please understand that there were certain loans which Kiri had raised earlier and those loans need to be paid. That loan was raised to make the — to make payments to the Singapore lawyers. Now those loans were getting due by October this year, starting from October. So we had to raise this money to make sure that we don’t recall on any loans. That’s number one. Number two, at the same time, to continue to have the better operations, working capital was required to be infused. And those are the preliminary objectives and remaining funds is again going back to project as an equity. So those are the reasons because of which it was necessary to raise some fund domestically and also kick start new projects. So both the objectives got solved with that and completed.
Pradeep Rawat
Okay, sir. That was helpful. And one last question that how much of the legal fee reimbursement that we are going to receive from the En Bloc sale?
Manish Kiri
So that is SGD8.5 million, not U.S. dollar plus the interest. So interest has been running for more than two years. So I think it would be north of SGD10 million.
Pradeep Rawat
Understood. Thank you and wish you all the best, sir.
Manish Kiri
Thank you.
Operator
The next question is from the line of Manoj Bhura from Adinath Financial Services. Please go ahead.
Manoj Bhura
Good morning, Manish ji.
Manish Kiri
Good morning, Monoj ji. Good to see you here.
Manoj Bhura
[Foreign Speech]
Manish Kiri
I am okay. I am all right. Thank you please.
Manoj Bhura
[Foreign Speech]
Manish Kiri
Of course, thank you.
Operator
The next question is from the line of Vivek Joshi, an Individual Investor. Please go ahead.
Vivek Joshi
Hi, congratulations on finally ending this long court case. Wish you all the best for your new projects and…
Manish Kiri
Thank you so much.
Vivek Joshi
Yeah, I had a couple of just housekeeping questions. So for the warrants, half of 492 has already come in and recently you’ve converted a little more. Is that correct?
Manish Kiri
Yes, correct.
Vivek Joshi
And the rest will be converted over the next two financial years. Is that a correct?
Manish Kiri
Yes, correct. Correct. Yes, correct.
Vivek Joshi
Can you just give me a little more detail what exactly this copper project is? Is it like getting over then melting? Can there be some contract of what exactly what it was?.
Manish Kiri
Yeah. To explain you briefly, the project is about producing 0.5 million ton copper, right, in two phases. First phase to produce 200,000 ton right 2 lakh ton copper and second is to produce 5 lakh ton copper, right? We would be able to feed both. We would be able to feed copper concentrate, which is produced from copper ore. So there is a smelter of 300,000 tons — 3 lakh tons capacity. And there is a scrap inboard and blister furnacing — blister processing furnace and then refinery. So it would be a recycling line, production line as well as a smelting production line. Totaling together is 500,000 ton. The entire premises is going to be completely internationally ESG compliant. So it will have a zero liquid discharge, not a single drop of ethanol will go out of these premises. And because of that, we are converting all the waste into various products. So fertilizers are produced as a byproduct. So fertilizers are planned along with the copper and there would be some ore, some blocks. So there are number of byproducts which would be produced by this plant, which would be ultimately as a copper and fertilizer production facility near power port.
Vivek Joshi
And what is the total capex? I’m sorry, I missed it if you have already told, what is the total capex for this?
Manish Kiri
So the total capex in two phases, right, which would be reaching — for the first phase and for the second phase together would reach close to INR8,000 crore. It will be funded both by equity from as Kiri well as debt from the bank.
Vivek Joshi
What debt-equity ratio are you comfortable with just the long-term? Just to understand the balance sheet because those deals are now balance sheet play.
Manish Kiri
So the balance sheet we receive would be approximately one-third equity and two-third of debt.
Vivek Joshi
Okay. One-third equity and two-thirds of debt. And when is the production expected to start one project?
Manish Kiri
So that one-third of equity will take away almost 50% of sales proceeds of that. Just to tell you the math for you.
Vivek Joshi
Yeah, I understand that. And this 8,000…
Manish Kiri
This would be over a period of two years.
Vivek Joshi
Okay. Thank you. All the best. Thank you so much.
Manish Kiri
Thank you.
Operator
[Operator Instructions] The next question is from the line of Aniket Gara, an Individual Investor. Please go ahead.
Aniket Gara
Good morning, Manish ji. Hello. Am I audible?
Manish Kiri
Please. Thank you.
Aniket Gara
Yeah, I just wanted to ask a couple of questions. Regarding the DyStar sale, is the sale proceeds capped at $600 million or we might get additional power?
Manish Kiri
Yes, it has been capped and crystallized at $604 million plus the legal cost. So as I just mentioned, the legal cost would be close to another SGD10 million. That $604 million is in U.S. dollar. And then if interest is awarded from the judgment for which the appeal just got concluded two days ago, then interest would be added to it and interest would also come out of the sale proceeds on priority. So based on the judgments, these amounts are all crystallized and capped. So irrespective of what price DyStar is sold, Kiri is going to get the fixed amount decided by the court.
Aniket Gara
Thank you. And another question is regarding the copper plant. As you mentioned, it’s basically the raw materials would be like from copper mines as well as scraps, right, for the copper plant?
Manish Kiri
Correct. Both the seeding, copper square plus copper ore, copper concentrate.
Aniket Gara
Okay. And when commercialization happen after approvals and all?
Manish Kiri
Sorry, can you repeat please?
Aniket Gara
When will the commercialization of the plant happen?
Manish Kiri
In two phases, one phase in 2026 beginning, that’s the target and second phase 2027 beginning.
Aniket Gara
Okay. Thank you. That’s it from me.
Manish Kiri
Thank you.
Operator
The next question is from the line of Prakash, an Individual Investor. Please go ahead.
Prakash
Yeah. My first question is regarding our new expense — sorry, like new project. So for the corporate project, you mentioned 200,000 is the first phase. So what is the like capacity for the fertilizer and which fertilizer we are going to produce?
Manish Kiri
So there would be two fertilizers. Total capacity of fertilizer production would be about 1 million ton and it would include DAP, dye ammonium phosphate and NPK. These are the two products that we have considered to produce.
Prakash
So like by 2026, what will be the like capex for this one for the first phase? And in first phase, how much will be like — you are saying 1 million, so 1 million is like taken together both fertilizer, right? And like then again there is like two is to three, like phase 1, phase 2.
Manish Kiri
So total capex of INR8,000 crore will be split into two. First phase would be INR2,500 crores and then the second phase would be INR5,500 crores.
Prakash
Okay, sir. So can you please like give us some more detail on the status of the implementation, like for example, the appointment of consultant or like by which quarter we are going to like place all the orders, what about for example, this land like leveling and like land also?
Manish Kiri
So what we will do is we will be pleased to give quarterly updates to update you where we are and we would try to disclose as much information as we can, but please be rest assured that all our team would be targeting seamlessly to achieve the numbers and to start commercial production, because the site is ready as we speak today. All the approvals are in place. For example, technology tie-ups are completed, technology agreements have been executed, memorandum of understanding for the raw material supplies have been executed, agreements with the port has been executed, lot of things have been completed as we speak now. So the timing is such that once we enter into now implementation of the project, once the orders are placed, advances are released, we have then fixed timeline for each machinery and we will definitely provide all the substantive information when the…
Prakash
[Speech Overlap] In the presentation. Yeah. So here the question is like as of now, all the existing corporate smelter companies have announced their expansion. I don’t want to name here, but I’m sure like we all know it. So like…
Manish Kiri
Many are expanding because the demand supply gap in India is very high.
Prakash
Yeah. So sir, my question is that like will there not be any epoxity of the — like of the required raw material because everybody will be jumping for the same pie, right? So how are you like just going to — how are you going to tie up your raw material, whether from import or are you looking from import also or like it should not be the case that like we have built up a plant and then like this raw material not available or it’s available, but at a very high price. So like the delta doesn’t make sense.
Manish Kiri
Yeah. These are the critical parts of business aspects. And we would definitely make sure that all these aspects are covered in the process when we are about to start our facility, raw material tie-ups, tie-ups with the mines, agreements with them, right, tie-ups with other vendors, machinery contracts. So all would be tied up and it would be done — the implementation would be done sophistically through the project implementation process and there would be one of the best people, technology providers, project executors, PMC companies, lot of people will be involved in the process, right? So all the aspects which you are correctly mentioning now, I can give you assurance that every one of those would be taken care.
Number two, when you look at the India’s demand and India’s current production, we are at 1.5 million ton of consumption in India, while production is only 0.4 million ton. There are several plants announced our facility some expansion with existing people, one more project just started. When you put together, it would all be by 2027, ’28, 1.5 million ton will be able to barely recover by the time India’s demand is expected to rise to almost 3 million ton, correct? Even at 2030, even after all the announced projects are operational, right, the way we have pledged the solar and renewable energy to reach to 450 gigawatt and the speed at which the electric vehicles are getting popular and converted in India, this number may exceed beyond 3 million ton.
So there is still a room and everyone is seeing this room and that is why other players are also jumping in because there is demand supply gap which is favoring not only one, but still multiple players to come in India and which is good because you are replacing all the imports of billions of dollars which is happening into India as on today. So there is an opportunity that everyone is trying to embark upon, right.
Prakash
No, sir, like my question was not regarding the sales part. My question was regarding the raw material part because when so much capacity is coming, so…
Manish Kiri
Raw material part is going to be the most challenging among all, right? So everyone is going to struggle and here the — because most of the current supplies are tied up with China, right, so not only us, every Indian producer is going to struggle and that is where the most challenging requirement we will have to come across, right? You said very correctly, but we are confident that we would be able to tie-up. More than half of the requirements are already as we speak now signed with MoUs and offtake agreements are under drafting. So well before our facility starts, we want to ensure that the entire feedstock is tied up. But there is still more and more shortage from the supply side. You will be able to see when this mergers, I agree with you. Earlier we tie-up, the better particularly for us.
Prakash
Yeah, that was my question. So sir, here I have one humble submission because now these — considering the size of the balance sheet of Kiri and the magnitude of these two projects, like these are by way like highly material like things the company is going to execute. So whenever any significant item is done, like for example, any technology type is done or any MoU signed, please kindly ensure that the corporate announcement is done to the stock exchange so that all the shareholders at masses can be aware of their background in the company.
Manish Kiri
Of course, sir. Of course. We will do so and we’ll definitely do so. Your suggestion is well taken. Every development, we will ensure that we update the shareholders.
Prakash
Very good, sir. My last point sir, like regarding $604 million.
Operator
Mr. Prakash, please fall back in the question queue for further questions. The next question is from the line of Suyesh, an Individual Investor.
Suyesh
Hi, sir. Good morning. My question is regarding the existing dye intermediary position. How is the industry looking right now? You mentioned in the last few calls that we have seen a durable bottom being formed and things looking up. So is that — has that trajectory picked up?
Manish Kiri
I think the demand-side has improved a bit, right? But looking at last quarter and looking at the current situation also, demand is improving slowly, not what we expected. There are lot of external factors which influence dyes exports and also depending on the textile producers and textile player situation in India, the recovery has been actually slow. What we have been trying to do is improve our product mix so that even at a lower capacity utilization, so if you look at our capacity utilizations across the plants today, less than 50% even today, right? So unfortunately, we are not seeing the influx of demand that can allow us to have adequate level of the capacity utilizations, which is not happening yet, in fact, unfortunately. So that’s where the subdued demand is still continuing for the dyes intermediate business.
Suyesh
Okay. And sir, my next question is regarding the copper plant. What kind of products are we going to make? And what is the ballpark EBITDA margin that you’re looking and asset turns out of this INR2,500 crores of first phase capex that you’re looking to do?
Manish Kiri
The products are various categories of copper, copper cathodes, copper rods, copper coils, copper tubes. So these are four or five categories of products that we will be selling with different products. Number two, if you look at these matters all around, right, and the new technology which we are also going to implement now, it would generate somewhere in between 10% to 12% EBITDA. And at the first phase of 200,000 ton at a current price, you are looking at almost INR16,000 crore of revenue.
Suyesh
Okay. Okay, got it. Got it. Understood. Thank you. That’s all from my side.
Manish Kiri
Thank you.
Operator
The next question is from the line of Yash from Dante Equity. Please go ahead.
Yash
Yeah. Am I audible? Hello?
Manish Kiri
Yes, right. Sorry, you got cut off last time if you were asking the question. Go ahead.
Yash
Yeah. So I think most of my questions have been answered through the previous callers. But I think one more thing that I really sort of want to understand is if there are any sort of regulatory changes with regard to copper, right, whether it’s from the countries that we are importing to — sorry, if it’s from the countries we’re importing from and India’s own regulations that might change? I don’t think they will, but have you factored that in? Just want to understand.
Manish Kiri
Absolutely. We have factored in not only the local regulatory compliances. As I mentioned earlier, we want to build and we are in the process of building the best ESG profile. For example, the way we have planned over the next two to three years, the things will spell out would be to have one of the best global, the acceptable ESG profile of this matter. So that’s why I said the entire premises would be a non-polluting, zero liquid discharge. We are not putting a coal based power plant. We will be transiting to the solar, right, to have reliable energy. Ammonia which we are using is a brown ammonia. Initially, it would be again a transition phase where it could be changed to green ammonia. So there is a game plan which will drive us to the highest level of compliances, not only locally, but whatever is the best practices globally and that is what we have targeted.
Yash
Right. And…
Manish Kiri
In case in case we end up targeting export markets, then these are quite essential factors which will have to incorporate it now onwards.
Yash
Right. One more thing I’d really like to understand is what percentage of your revenue, let’s say, post three to four years is going to come from the copper vis-a-vis the fertilizer like what is your target? Like what part of your business is going to be copper? Hello?
Manish Kiri
Yeah. The copper division — the copper subsidiary is going to going to have the biggest numbers, right, at the full stabilization of both the phases, you are looking at close to $5.5 billion of revenue. So that amounts to somewhere close to INR50,000 crore of revenue. Now these numbers look too big, but it takes three years compared to the size of the company currently. So then this project and the successful execution of this project will completely change the profile of the company as a whole, right? And then the EBITDA generation would be multiple times higher than what the current line of business is generating. So you are essentially transforming the whole company to the new platform.
Yash
So fertilizer via copper, is it okay to assume that copper is going to be 80% plus and fertilizer is going to be 20% or lower?
Manish Kiri
Absolutely. More than 80%.
Yash
Yeah. That’s the number I wanted. Thank you so much for taking all my questions.
Manish Kiri
Fertilizer is just a byproduct to make sure that you convert all your waste to the usable products that is the only purpose. It’s not to enter into per se this fertilizer manufacturing as a different segment. That’s not we are doing.
Yash
Please highlight that. I mean, when you say copper and fertilizer, right, it seems like you’re trying to do two different — two very, very different things. I would really request you to highlight, because fertilizer is not a very…
Manish Kiri
That sometimes misleads. You know that we are entering into two different phases there.
Yash
Exactly. So I would request you to sort of mention that you’re doing copper and fertilizer is just a byproduct or whatever, like however you can sort of mention it to the investors. That would be great.
Manish Kiri
We’ll do sir. Thank you.
Operator
The next question is from the line of Arun from Grow Capital. Please go ahead.
Arun
Yeah. Sir, thanks for again giving me an opportunity. Just wanted to submit that as a minority investor, we have been invested in the company and we were expecting this big inflow. But disappointed to see that there is no mention of any big dividend or a buyback at a much higher price that rewards the minority shareholders and rather the management has gone and ahead and committed big capital towards projects that are uncertain, that have lot of riskiness and there is no past experience. So there is a big disappointment on that front. Any comments you would like to make there?
Manish Kiri
I think, see, the company has not been able to grow for 10 years, right? Number one. Number two, when the company is changing drastically its business operations and diversifying heavily into a new sector, there has always been a risk involved, right? And we are taking all essential steps to mitigate that risk. You are right, the risk is there, but if we succeed to overcome all these risk factors and we deliver and execute the business performance what we have planned, then as a shareholder, if you are prepared to be in a long-term, you will be rewarded immensely, right? So let me put it this way. So when you see the company which is growing somewhere close to 40 times where it is today, right, and if you are prepared to wait through the journey, there would be a long-term view and there would be reward on the long-term view. Please remember, all shareholders have suffered and I apologize and I’m sorry that the litigation continued 10 years. So we couldn’t grow, we couldn’t invest. We couldn’t do certain things which we could have done in this 10 years. But now the time has come where things can change and growth trajectory can start. Number…
Arun
Sorry, go ahead.
Manish Kiri
Yeah, please understand that the commitment of capital in equity as we speak now is about 50% of proceeds coming in, right? And proceeds will be coming in by March. So dividend buyback, nothing is closed. So please be rest assured when the time comes, when the money comes, when we talk maybe the quarter ending March end, we would be speaking with the different objectives at that time. So all these options still are open, just be rest assured and committed capital is almost half of the incoming capital, which still company has. So there are possibilities to do other things and we’ll definitely look into what you just said that the shareholders have been waiting for 10 years and there is something that can be given and that’s very well taken.
Arun
Sure. Thank you, Manish ji, for that. And just want to reiterate that we have waited too long, 10 years while the markets have risen, but they have not been rewarded. So this is the time for us totally rewarded, please do consider and the Board and do consider a buyback or a higher dividend amounts. Thank you for that.
Manish Kiri
We will definitely. Thank you.
Operator
The next question is from the line of Ayush, an Individual Investor. Please go ahead.
Ayush
Hello, sir. I have a couple of questions. So on the borrowing side, this $130 million facility that we have availed, who is the lender in this facility? Is it a litigation finance sort of fund? And what are the interest rates that we are bearing for this?
Manish Kiri
As I mentioned earlier, this is the judgment funding and the funds who do these kind of activities, they are based overseas out of India into Singapore and it would cost back ended IRR based almost 15% of the country.
Ayush
So it would cost around 15% you say?
Manish Kiri
Correct.
Ayush
And that would be 15% on dollar or INR.
Manish Kiri
All dollars because the — it’s all dollar linked, the reward is dollar linked, the investment, the borrowing is dollar linked, it’s all dollar linked.
Ayush
Okay. And on the planned expenditure side, sir, basically the — are we using the same land facility that are already there in the company or are we planning to buy a new land or we already purchased new land for the project that they are going to build?
Manish Kiri
We already purchased a substantial new land already, which is there with the company and some more new land would also be purchased in future.
Ayush
Okay, understood. So it will be very helpful if you can — as a follow-up, if you can share a detailed presentation of what is the status of end use of funds because if we are bearing such a huge interest…
Manish Kiri
[Speech Overlap] Sure. We’ll so. Definitely do so. Yeah, we’ll do so. We’ll share a brief presentation in that in the future.
Ayush
Thank you.
Operator
Thank you. Ladies and gentlemen, this was the last question for today’s conference call. I would now like to hand the conference over to the management for their closing comments.
Manish Kiri
Thanks to all of you for participating in today’s conference call. All the best. We’ll speak next quarter. And meanwhile, whatever is the significant development, we’ll keep all the shareholders. Thank you so much. Thank you.
Operator
[Operator Closing Remarks]