Nava Bharat Ventures Limited (NBVENTURES) Q3 FY23 Earnings Concall Transcript

Nava Bharat Ventures Limited (NSE:NBVENTURES) Q3 FY23 Earnings Concall dated Feb. 03, 2023.

Corporate Participants:

Ashwin Devineni — Chief Executive Officer

Sultan Baig — Chief Financial Officer

Analysts:

Mohit Kumar — DAM Capital Advisors Limited — Analyst

Kalpesh Agarwal — Individual Investor — Analyst

Nikhil Abhyankar — DAM Capita — Analyst

Yash Sarda — Sushil Finance — Analyst

Samir Shah — Individual Investor — Analyst

P. Vijay — Individual Investor — Analyst

Unidentified Participant — — Analyst

Vandana Rajpal — Axis Energy Group — Analyst

P. Anirudh — Individual Investor — Analyst

Presentation:

Operator

Good evening, ladies and gentlemen. I’m Vidya, moderator for the conference call. Welcome to Nava Limited Q3 FY ’23 Earnings Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note, this conference is recorded.

I would now like to hand over the floor to Mr. Mohit Kumar from DAM Capital. Thank you, and over to you, sir.

Mohit Kumar — DAM Capital Advisors Limited — Analyst

Thank you, Vidya.

On behalf of DAM Capital, we welcome you to the Q3 FY ’23 earnings call of Nava Limited. From management, today we have with us, Mr. Ashwin Devineni, Chief Executive Officer; Mr. GRK Prasad, Executive Director; Mr. Sultan Baig, Chief Financial Officer; Mr. Nikhil Devineni, Senior Vice President; Mr. VSN Raju, Company Secretary and Vice President.

Before we go on to the main call, I would like to read the standard disclaimer. There may be forward-looking statements about the company and the subsidiaries, which are based on the beliefs, opinions and expectations of the company management as of the date of this press release. The company do not assume any obligation to update their forward-looking statements if those beliefs, opinions, expectations, or other circumstances should change. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Consequently, readers should not place any undue reliance on such forward-looking statements.

We will start with the brief opening remarks, which will be followed by Q&A. Over to you, sir.

Ashwin Devineni — Chief Executive Officer

Thank you, Mohit.

A very good evening and a warm welcome to all the participants. The statement of financial results both on stand-alone and consolidated basis detailing the operations of the Nava Group for Q3 FY ’23 has already been filed with the stock exchanges and posted on our website. I hope you have had a look at them and trust that they provide adequate information on our performance for the quarter ending 31st December 2022. Given the above, we would like to proceed with the question-and-answer session and request you all to seek clarification as you may desire. Thank you.

Questions and Answers:

Operator

Thank you, sir. [Operator Instructions] The first question comes from Kalpesh Agarwal, an Individual Investor. Please go ahead.

Kalpesh Agarwal — Individual Investor — Analyst

Hello.

Ashwin Devineni — Chief Executive Officer

Hello.

Kalpesh Agarwal — Individual Investor — Analyst

Is my voice audible?

Ashwin Devineni — Chief Executive Officer

Yes, please.

Kalpesh Agarwal — Individual Investor — Analyst

Yes. Hello. I guess the numbers are very good for nine months ended on a consolidated basis. And congratulations to the team for the good numbers. We are holding ourselves since 2013 now, sir. And in this last 10 years, we have received INR22 dividend — cumulative dividend. Now when I go through certain of the notification you sent on exchanges, you said that we have won the tribunal award from consent order, right? I want to understand that by August, you were entitled to receive that whole amount, plus we have a land parcel, which is in Hyderabad, which you are able to realize in coming years.

And plus this nine months, we have around INR800 crores, INR900 crores of a PAT number, right? So in total, if we just took a calculation, it comes to around, say for INR4,000 crores, INR5,000 crores of cash flows, which is going to come to you in, say, one year down the line. We want to understand that what is the company’s road map for this INR5,000 crores, because the dividend I said INR22 in 14 crores shares, that’s hardly INR300 crores dividend which we have distributed and some buyback we have done. That total will not be more than, say, INR700 crores, INR800 crores in the last 10 years.

I want to understand this INR5,000 crores comes in, we have not — we have only one mine — you from the previous call have said about one manganese mine. Besides that, there is nothing coming up in the company’s capacity. I want to understand if there is any road map for the company or we will wait for that amount to come and then we will decide. But during that time, our balance sheet would look — ROE and ROC numbers. Because currently also when we look at the numbers in the INR1,000 crores kind of a PAT, our company is sitting at only…

Ashwin Devineni — Chief Executive Officer

Can you please get to the question.

Kalpesh Agarwal — Individual Investor — Analyst

Yes. So I want to understand is what is the road map, sir, for the future?

Ashwin Devineni — Chief Executive Officer

Okay. Understood. So like you mentioned, we are financially healthy. We’ve always reported a healthy profit. In terms of bulk payments being received, you are right, both the land parcel, which would materialize, which will take some time, but eventually materialize will get us a good amount, but also the arbitration consent award.

Now with regards to the company’s growth path, we have reiterated in previous calls that we are expanding within our current verticals. Some of the expansions include expansion of ferro alloys division at Ivory Coast, expansion possibly in the power division at — in Zambia, expanding our 300 megawatt capacity to something higher. We’re also in the agricultural sector in Zambia. So all these require capital. And some of the proceeds of the amounts that are being received or will be received will be utilized towards these expansions. And then the remainder of it, definitely, we will look at certain corporate actions that will improve shareholder value, which includes dividend distribution amongst various others.

Kalpesh Agarwal — Individual Investor — Analyst

Okay. But don’t you think we are too late to start something at this point of time? Because I want to understand that, I mean, over the call from last three or four calls, we’ve been asking the same question and you have been replying, but not a single amount has been allocated till date for any kind of a number. What we want to understand is that we waited patiently for that MCL to get operationalized and rationalized, that looks on the thing. But I guess, during the — the difference between stand-alone and consol number is more with — to do with Maamba, which has performed excellently well, which we can see from the result in the Power segment. But we as an investor are a bit worried that there is no proper guidance given by the company in terms of absolute quantity of ferro alloys you want to expand. What megawatt you’re looking at Zambia? I mean any concrete will be much appreciated, sir?

Ashwin Devineni — Chief Executive Officer

Yes. We do see where you are coming from, but you know for a lot of these capital expansions, including ferro alloys and power, there is a lot of due diligence work that goes in. You would appreciate that we are not one of those companies that announce large numbers, get into projects, take on huge steps and end up like a lot of the other companies that have ended up in the space they’re currently in. So it’s not that we’ve not done anything. There’s a lot of homework. There’s a lot of work going on in the various areas that we are expanding. But in due course, when we finalize on exactly what the number is in terms of capacity or capital outlay, we will let the wider investors know.

Kalpesh Agarwal — Individual Investor — Analyst

Or can we expect a big dividend in FY ’24, sir? Is there — is it the right platform to ask at this point of time or we shall wait?

Ashwin Devineni — Chief Executive Officer

See, it is a little premature for me to answer that because it is dependent on certain cash flows coming in. The land sale, like I said, it’s a large chunk, it will take some time. And even with respect to Maamba, we need to get the utility to pay Maamba. Maamba need to declare the dividends and then we can announce it. So it’s in our mind. But in terms of timing, right now, it’s still difficult for us to commit at this stage.

Kalpesh Agarwal — Individual Investor — Analyst

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

Operator

Thank you, sir. The next question comes from Nikhil Abhyankar from DAM Capital. Please go ahead.

Nikhil Abhyankar — DAM Capita — Analyst

Yes. Thanks for the opportunity and congrats on a good set of numbers. First of all, I want to understand where is this extra profit coming in, why has our EBITDA margin expanded in this quarter?

Ashwin Devineni — Chief Executive Officer

Can you repeat the question, Nikhil? We can’t hear you.

Nikhil Abhyankar — DAM Capita — Analyst

Hello? Hello?

Ashwin Devineni — Chief Executive Officer

Yes. Can you repeat the question? We were unable to hear you.

Nikhil Abhyankar — DAM Capita — Analyst

What is the reason for this almost 9 percentage point expansion in our EBITDA margins for this quarter?

Sultan Baig — Chief Financial Officer

Hi Nikhil, thanks for your question. The primary reason for additional margin in the quarter is better performance of Maamba Collieries. One, on the sales, which is slightly higher because we had in USPPI, increment on the sale tariff to ZESCO and also slightly higher realization on the sales to SAPP. And if you go through the notes, you would also find that we have not made any provision on the expected credit loss because the dispute with ZESCO has been resolved. So both these factors are contributing to the additional margin in the quarter.

Nikhil Abhyankar — DAM Capita — Analyst

Okay. And sir — back to the arbitration question, sir, the excess amount that we’re going to receive, so that is only till May ’22. So is the payment regular for period after May ’22?

Sultan Baig — Chief Financial Officer

Yes, Nikhil. We have been receiving payments regularly as per the new tariff from ZESCO. So that [Technical Issues] default.

Nikhil Abhyankar — DAM Capita — Analyst

Okay. And sir, what are — what is your debt payment schedule?

Sultan Baig — Chief Financial Officer

Debt, as we declared in the financials, we have five overdue installments to be paid on the Maamba Collieries site. As of 30th December, we were able to pay one installment. Post that, we were able to make some small payment. But once we receive some amounts from ZESCO against arbitration process, we will clear the outstandings.

Nikhil Abhyankar — DAM Capita — Analyst

Okay. And we were thinking — already we were thinking of restructuring the debt, so any progress on that?

Sultan Baig — Chief Financial Officer

It’s too premature for us to answer that, Nikhil, because it depends upon the realization in the lenders’ discussion.

Nikhil Abhyankar — DAM Capita — Analyst

Okay. Understood. And sir, now, what payments…

Sultan Baig — Chief Financial Officer

Nikhil, I think you’re taking too many questions.

Nikhil Abhyankar — DAM Capita — Analyst

Okay. Sure, sir. I will get back in the queue.

Operator

Thank you, sir. [Operator Instructions] We have a question from Yash Sarda from Sushil Finance. Please go ahead.

Yash Sarda — Sushil Finance — Analyst

Good afternoon, sir. I had a couple of questions. My first question would be looking at the quarterly results, the margins in the ferro alloy business have reduced drastically. This is part of the reason would be since we have committed the contract with Tata Steel. And so could you throw some more light as to when can we achieve the same levels in the margin front what we used to achieve with Tata Steel? How long will it take us? And the road map ahead for the same?

Ashwin Devineni — Chief Executive Officer

Sorry, can you repeat your second question, please, relating to Tata Steel?

Yash Sarda — Sushil Finance — Analyst

And sir, like, we ended the — our contract agreement with Tata Steel, right?

Ashwin Devineni — Chief Executive Officer

Correct.

Yash Sarda — Sushil Finance — Analyst

So I wanted to understand, so our margins have reduced drastically in the ferro alloy business.

Ashwin Devineni — Chief Executive Officer

Okay.

Yash Sarda — Sushil Finance — Analyst

So what is your road map going ahead? When we’ll be able to match the margins of that of Tata Steel and then beyond?

Ashwin Devineni — Chief Executive Officer

Okay. Got it. So, Yash, firstly, thank you for your question. I think as you rightly pointed out, quarter three has been an extremely challenging period for all bulk alloy producers across the country and world over. There were two main contributing factors. One was with respect to the sales price falling by almost 15% from Q2 to Q3. This coupled with significantly high raw material costs has impacted margins very badly. Now going forward, fortunately, there’s been a big drop in raw material costs. In this particular case, with respect to manganese ore, which has dropped by almost 50% quarter-on-quarter. And we are also witnessing an increase in sales price from Q3 to Q4 by about 10%. So both these factors put together, we are bullish on the way forward for the ferro alloys market.

Now coming to your second question, see, with Tata Steel, the margins were fixed despite how the market behaves, whether there is an up or sometimes when there was a down, the margins was also canceled by Tata. In this case, we want to benefit from any increase in the market, because we are doing the entire production and marketing on our own. Secondly, the switchover to silico manganese in Odisha was based on long-term planning. The main purpose was to increase our market share in the manganese alloys segment. As you may be aware, currently, there’s been a 5.5% increase in steel production in India at 124 million tonnes. This figure is slated to increase to 300 million tonnes by 2030 as per the National Steel Policy Association. So going forward, we wish to enhance the market share in this particular case.

Yash Sarda — Sushil Finance — Analyst

All right. My second question, the question would be the management has entered into businesses like health care and agri. So I mean like what exactly is the management thought process? Given as a shareholder, if I’m investing in a company which is into ferro alloys and power, I’m looking at the company which should be focusing on its core and mainly putting 100% of their time and effort into the same business. Because earlier also, we faced an issue when we entered the sugar industry and we took an exit in that business and still we have an assets of around INR25-odd crores which are still lying on our books and we are not able to monetize the same. So in that — I wanted to understand the framework, if the management sees this business, this might not be the expertise of the management, is that coming from a power business and health care is totally different. So it’s moving in India, that’s something very ambitious I wanted to get your views on that thing?

Ashwin Devineni — Chief Executive Officer

Yes. No, I think we have to correct you on the sugar part of things, which I think the CFO will take. But with regards to our strategy of diversification, you need to understand that while we are in power, we are in thermal-based, coal-based power. The scope of expanding and constructing new coal-based power plants in India or many other parts of the world, say, apart from Africa are extremely limited. Now it’s not like we’re not expanding on the power side, like I just talked about the expansion possibly in Zambia and also on the ferro alloys side, we’re looking to expand at Ivory Coast, where we also have security of our raw material. So while we expand in these verticals, I think it’s always healthy for companies to look at new upcoming vertical plant seeds, and which we see could yield, good benefits, say three years to five years to 10 years down the line. And that’s one of the reasons why, one, in the agricultural side, we’ve gotten into avocado growing in Zambia and also on the health care side, we’re in Singapore and Malaysia.

Sultan Baig — Chief Financial Officer

And regarding the sugar business, you’ll have to understand the history. We’ve been in the sugar production for almost four decades. And one of the reasons for us to come out of the business was non-availability of the sugarcane in that region and it was difficult for us to operate on such a large state. And we have monitored all the assets at the sugar division above the book value and realized profit on that. Yes.

Yash Sarda — Sushil Finance — Analyst

Okay. If I can just ask one final question please, if I can.

Sultan Baig — Chief Financial Officer

Please go ahead.

Yash Sarda — Sushil Finance — Analyst

I just wanted to understand, sir, receiving $516-odd [Phonetic] million from ZESCO. So what we have that consent, is it — could you just give us some numbers on a quarterly basis how much we will be receiving from them? So I think that would be better for us to road map the debt restructuring, which you guys would be doing back paying of the interest or something of that sort. Nothing more than this, sorry.

Sultan Baig — Chief Financial Officer

Yes, point taken. As and when we are realizing the amount from ZESCO, we are declaring to the stock exchanges.

Yash Sarda — Sushil Finance — Analyst

Okay. So let’s — I think it’s [Indecipherable] you guys have received only $10 million as an upfront payment from them, right, out of $538 [Phonetic] million?

Sultan Baig — Chief Financial Officer

Yes.

Yash Sarda — Sushil Finance — Analyst

Okay. So we are still spending $500 million. Got it. Thank you. Thank you, sir. Thank you so much.

Operator

Thank you, mam. [Operator Instructions] We have a question from Samir Shah, an Individual Investor. Please go ahead.

Samir Shah — Individual Investor — Analyst

Yes. Sir, I wanted to ask $518 million, the agreement that we’ve done with Zambia, have we offered them any discount on that?

Ashwin Devineni — Chief Executive Officer

Yes, we’ve offered them. So the entire outstanding includes principal and interest. We offered them a $60 million discount on it.

Samir Shah — Individual Investor — Analyst

60?

Ashwin Devineni — Chief Executive Officer

60.

Samir Shah — Individual Investor — Analyst

Okay. And there was a tariff rationalization with ZESCO. At that time, was it a unilateral concession from our side or was there a quid pro quo where they extended the concession tenure?

Ashwin Devineni — Chief Executive Officer

No. So firstly, with regard to previous answer, the total outstanding initially was $578 million. So when I talk about a $60 million discount, the number you have mentioned factors in the discount, okay?

Samir Shah — Individual Investor — Analyst

Okay.

Ashwin Devineni — Chief Executive Officer

And the second question, sorry, can you repeat it?

Samir Shah — Individual Investor — Analyst

Yes. I was saying that the tariff rationalization earlier that we did where we reduced the tariff for ZESCO, was that a unilateral concession from our side? Or did ZESCO also increase the tenure of our agreement to compensate us? Or something of that sort? Was there any quid pro quo?

Ashwin Devineni — Chief Executive Officer

No. So we had very lengthy discussions and negotiations. We looked at basically our numbers, ZESCO looked at their payment profile, and then we are in the process of amending our existing PPA. There’s no increase in tenure.

Samir Shah — Individual Investor — Analyst

There’s no increase in tenure. And in the arbitration, you said $518 million is net of the $60 million. There was some tax component also which has to be reduced from that?

Ashwin Devineni — Chief Executive Officer

That’s right. Yes. There’s a VAT component, which in essence, we were paying. So basically, ZESCO is to pay us the money and then a part of that money we use to pay the VAT. Now what we have agreed with ZESCO is they will be liable to pay the VAT directly to the government.

Samir Shah — Individual Investor — Analyst

Okay. So in essence, there is no discount concession on that, it’s just a methodology change?

Ashwin Devineni — Chief Executive Officer

Exactly. And basically, the outflow from ZESCO to us would be slightly less because they wouldn’t have to pay us that VAT component, they could deal with it directly with the government.

Samir Shah — Individual Investor — Analyst

Okay. Okay. All right. Got it, sir. Thank you.

Operator

Thank you, sir. The next question comes from Vijay P, an Individual Investor.

P. Vijay — Individual Investor — Analyst

Hello?

Ashwin Devineni — Chief Executive Officer

Yes.

P. Vijay — Individual Investor — Analyst

Hello, am I audible?

Ashwin Devineni — Chief Executive Officer

Yes, please.

P. Vijay — Individual Investor — Analyst

Yes. Similarly, this time after declaring the results, the company has not issued a press release. So the investors are not aware of the happenings in the last three months in the production front, sales front, et cetera. You had made an announcement that the Odisha ferro alloy plant will be shut from 1st November for conversion from ferro chrome to silico manganese. Is the conversion over? Is the plant producing silico manganese now?

Ashwin Devineni — Chief Executive Officer

Conversion agreement with Tata Steel is on 31st of October, post which…

P. Vijay — Individual Investor — Analyst

No, I was talking about — no, no, no, I was not talking about the ferro chrome conversion, I was talking about the change in the production plan from ferro chrome to ferro — silico manganese?

Ashwin Devineni — Chief Executive Officer

So are you asking me if that’s taken place?

P. Vijay — Individual Investor — Analyst

No, I’m asking you whether the plant has now started producing silico manganese. If yes, from when? And then if it has started producing, what is the production in the last quarter?

Ashwin Devineni — Chief Executive Officer

So the production began from 15th of December of last year, and the monthly production currently is at 4,000 tonnes.

P. Vijay — Individual Investor — Analyst

4,000 is a targeted tonne. So it’s going to produce 75,000 tonnes [Phonetic] rated capacity for the year?

Ashwin Devineni — Chief Executive Officer

No, 4,000 tonnes is the actual monthly production as of now.

P. Vijay — Individual Investor — Analyst

So we are targeting 75,000 tonnes on a full year on a 12-month basis?

Ashwin Devineni — Chief Executive Officer

No. See, 75,000 tonnes was a rated capacity when it came to the ferro chrome operations. Currently, the specific power consumption in silico manganese was far higher. And as a result of that, the production — the actual production of silico manganese is far lesser than what it used to be with ferro chrome. So what we are essentially targeting is about 50,000 tonnes per annum of silico manganese.

P. Vijay — Individual Investor — Analyst

Thank you. That’s a good — that’s — that helps. Now regarding the plans to produce silico manganese in Ivory Coast, what is the capacity the company is looking at?

Ashwin Devineni — Chief Executive Officer

It’s extremely premature at this juncture to comment on that, because we plan to expand hinges on whether or not the mine that we currently have proves to be successful in two aspects: one, with respect to quality; and the other is quantity. Currently, we are in the process of exploration. The Phase B works have begun. So in about six months’ time, we should be having clarity on that.

P. Vijay — Individual Investor — Analyst

So we are not — the mine is not producing anything as of now?

Ashwin Devineni — Chief Executive Officer

No, it’s not.

P. Vijay — Individual Investor — Analyst

Okay. Last question is about the Zambia coal-based power plant. In the past, once the company had stated that producing any more power from coal, even the Chinese companies are not ready to supply a plant and machinery because of the stigma associated with it. So if we are going to go — if you are looking at expanding the capacity from 300 megawatt to maybe, say, 600 megawatt, who will be supplying the plant and machinery? Or is Nava is going to source it from India?

Ashwin Devineni — Chief Executive Officer

No. So with regards to what we said previously, I don’t think it was to deal with Chinese equipment, it was to deal with Chinese money and lending. I think Chinese banks are right now refraining from lending towards any coal-fired power projects. But Chinese equipment suppliers are still producing the VPG [Phonetic] packages. So while we are exploring the expansion, we are looking at both Chinese vendors, Indian vendors and other vendors. And we’ll basically zero down on the most cost-effective solution.

P. Vijay — Individual Investor — Analyst

So if you may allow me, I’ll ask one more question. When the consent terms were signed with ZESCO, they have made a token payment of only $10 million so far. We are already about more than one month, about 1.5 months from that date of award. And we have got about seven months left and to receive about $500 million. Is there any road map? Or is there any payment schedule? Is there any payment calendar?

Ashwin Devineni — Chief Executive Officer

Yes. So I mean, as far as ZESCO is concerned, they’re not defaulting on the payment terms. The end of August marks the time where they will basically pay the entire amount, they have still time. So that’s what they’re sticking to.

P. Vijay — Individual Investor — Analyst

So there is no monthly payment schedule?

Ashwin Devineni — Chief Executive Officer

No, there’s no monthly payment schedule. There are a couple of interim payments now and then, but I think the main number to or the days to keep in mid is August, which is a significant one.

P. Vijay — Individual Investor — Analyst

Yes. Thank you very much. That’s it all from my side.

Operator

Thank you, sir. The next question comes from Mohit Rathi from CCIPL [Phonetic]. Please go ahead.

Unidentified Participant — — Analyst

Hello, sir. Is there any update on the monetization of your land in Nagaram?

Ashwin Devineni — Chief Executive Officer

We engaged JLL basically to dispose the — not dispose, sorry, monetize the land and the works are underway. So there’s nothing to report further than that. Like we indicated to you previously, this is a large parcel. It’s going to take a little time. But JLL being a reputed firm is on it.

Unidentified Participant — — Analyst

Okay. Sir, I had one more question. Our company has a history of buying back its shares as our shares are undervalued. And now since our situation has improved with the regular payments, can we expect some buyback or something like that?

Ashwin Devineni — Chief Executive Officer

See, I think we’ve done this buyback twice. So it’s not like we’ve done this several times. With regards to a further buyback, like I mentioned, once we see larger amounts coming due to various actions or items that are due, we will definitely take corporate actions that will improve shareholder value, one being buyback. We’ll consider that.

Unidentified Participant — — Analyst

Okay, sir. Thank you. All the best.

Operator

Thank you, sir. The next question comes from Vandana Rajpal from Axis Energy. Please go ahead.

Vandana Rajpal — Axis Energy Group — Analyst

Hi. I have two questions for the CEO. My first being, you stated that you’re looking at expansion of your coal projects in Maamba, right? So how do you plan to tie up your offtake for this considering the factors the Zambian government has not been very supportive of your earlier project?

My second question is, with the drive towards sustainability, how do you plan to tie up this debt since most of the international lenders are not willing to finance coal projects anymore?

And my third question is around, how do you — what are the sustainability initiatives that the company is taking at the moment? Thank you.

Ashwin Devineni — Chief Executive Officer

Sorry. Can you repeat that? Can you repeat? Can you be — can you repeat the question again? You have three questions. Can you be precise and just repeat the questions clearly?

Vandana Rajpal — Axis Energy Group — Analyst

You want me to repeat all the three?

Ashwin Devineni — Chief Executive Officer

Yes. Yes.

Vandana Rajpal — Axis Energy Group — Analyst

Yes, sir. So my first question is around the expansion plans that you have stated, wherein you said that you would be expanding the capacity of the Zambia plant. So how do you plan to tie up the offtake of that launch considering that the Zambian government has not been very supportive of the first investment phase there, and there has been a good $60 million has been written off.

Ashwin Devineni — Chief Executive Officer

Okay.

Vandana Rajpal — Axis Energy Group — Analyst

My second question is on how do you plan to tie or bet for any further investments in the coal segment considering that — so with the sustainability drive across the globe, that still would be difficult to get?

My third question is on the sustainability initiatives being taken by the company. I do not see any — on — any of the filings of the company. If you could please elaborate on that, sir? Thank you.

Ashwin Devineni — Chief Executive Officer

Okay. So on the first point with regards to the offtake, I don’t think I agree with the point that the Zambian government has not been — maybe in the past, I don’t think we were receiving our payments duly. But since May ’22, we’ve been receiving all our payments on time and in full. And the fact that we have reached this consent award through the arbitration tribunal clearly shows that there was consent and things are different now. And both, I think, us and the Zambian government including the utility, want this to work. You need to also keep in mind that while everyone talks about renewable, Zambia is 85% to 90% renewable, and that’s one of the reasons why they are facing huge power prices right now because of bad rains in the street and in the last two years to three years. They almost have about 12 hours to 13 hours of power cuts on a daily basis.

So there is a huge urge for us to expand by the Zambian government, so that they can increase the base load. The other thing to add in terms of the offtake is what is different now is we have another offtaker. We are also now members of the Southern African Power Pool. So in the event, the state utility is unable to offtake the power. We have the option to create it in the SAPP network.

The question regarding debt and coal, you are right, it’s not as easy today to kind of raise debt on coal-based projects. But that being said, it’s not impossible. I mean there are not a lot of people expanding in coal and the only people, I think that are doing it is where there is an imminent need. And I think this is an area where the need currently exists. There is interest. We don’t know if it’s going to be with the existing set of lenders, but there definitely are parties that are still interested in financing coal projects as long as the margins are healthy.

Yes. In terms of the sustainability, and correct me if I’m wrong, you’re talking about the green initiatives taken by the company?

Vandana Rajpal — Axis Energy Group — Analyst

My reference is to any sustainability initiatives that have been taken up considering that most of the projects are capital — power intensive, which run on positive they could?

Ashwin Devineni — Chief Executive Officer

Well, I think on the sustainability part, Nava [Technical Issues] has had a good history in terms of how the operations would not impact the [Indecipherable] that’s been operating. We have had several [Indecipherable] going in our way. In fact, in Maamba too, in Zambia too, though it’s a large plant, there’s been a transformational change, which the company intends to pursue in all its projects, including the current proposed net cash.

Yes. And just to kind of add just because we use the coal — the word coal, it doesn’t mean in terms of — it’s not negative, because if you look at Zambia, especially, the coal was being mined for customers that are buying the high-grade coal. But what we do is take a low-grade coal that was previously termed as waste and which was just burning. And we feed it to our power plant, we capture 100% of the ash, we recycle 100% of the water, and therefore, preventing the environment from being polluted by sulfur and so on emissions. So it is actually an environment commitment action that we’ve done. And this is something that we follow in all our operations.

Vandana Rajpal — Axis Energy Group — Analyst

That’s it from my side. Thank you.

Operator

Thank you, sir. The next question comes from P. Anirudh, an Individual Investor. Please go ahead.

P. Anirudh — Individual Investor — Analyst

Yes. Thanks for the opportunity. I would like to ask my questions regarding the power sector, the domestic power business the company has. Last time I remember in the call, we were told that NBEIL was shut due to lack of availability, coal availability, coupled with poor tariff. Would appreciate if the management could throw some light on the prevailing situation and also the outlook for the future?

Ashwin Devineni — Chief Executive Officer

Yes. Nava Bharat Energy went through the stress of low coal availability as well as unremunerative prices of power around the IES. So the operations were definitely impacted in the previous quarters. What we decided was to use the time to undertake a major overhaul, which has been planned in the month of November. So the unit has been taken for that major overhaul, and it will be resuming generation later this — by end of this month. And this period has been advantageously utilized by the company to stock up the coal. So we expect that unit to be ready when real uptake is likely in the IES markets from March onwards. So we expect at least a reasonable performance in the next quarter or so. Let’s see how it pans out. But I think that’s where the company’s 150 megawatt stands.

P. Anirudh — Individual Investor — Analyst

Thanks for that, sir. One more question I have. We’ve spoken about Maamba also selling power to the grid other than what has been given to the Zambian utility. So in the last quarter, were there any sales to the African grid? And what was the PLF for the last quarter of Maamba?

Sultan Baig — Chief Financial Officer

Maamba, the last quarter, PLF was 99.5%. We’ve been fully operational. And about 20% power has been sold to SAPP platform.

P. Anirudh — Individual Investor — Analyst

That sounds very promising, sir. Thank you. That’s all I have.

Operator

Thank you, sir. [Operator Instructions] We have a follow-up question from Samir Shah, an Individual Investor. Please go ahead.

Samir Shah — Individual Investor — Analyst

Sir, I wanted to check with you, what is the tariff realization we’ve got on the South African Power Pool?

Ashwin Devineni — Chief Executive Officer

So we have an average of about $0.14 [Phonetic].

Samir Shah — Individual Investor — Analyst

$0.14. And we would be with ZESCO at about $0.09 [Phonetic] odd, right?

Ashwin Devineni — Chief Executive Officer

It’s over — indexation took place. So right now, our current tariff at ZESCO is slightly over $0.10 [Phonetic].

Samir Shah — Individual Investor — Analyst

Over $0.10. Okay. And about NBEIL, we’ve been going through the hoops in terms of trying to sell it to merchant power whenever the price is right. And then there is a non-peak period where we are not able to utilize the plan. Is there any long-term plan that you have for NBEIL versus this yearly merry-go-round?

Ashwin Devineni — Chief Executive Officer

You’re right. At this point, that’s merry-go-round. But I think what we are trying to see is whether we can have a long-term tie up for coal on alternative schemes. The government has been talking about some schemes. So once we have some such schemes, which probably could be tied with some kind of PPA as well, I think long-term subsistence should come in. We can’t tell you any time line, but the efforts are in those direction.

Samir Shah — Individual Investor — Analyst

Okay. Thank you.

Operator

Thank you, sir. [Operator Instructions] We have a follow-up question from P. Vijay, an Individual Investor.

P. Vijay — Individual Investor — Analyst

Hello, am I audible?

Ashwin Devineni — Chief Executive Officer

Yes.

P. Vijay — Individual Investor — Analyst

Yes. My question is, we seem to have forgotten about the parcel of land in Kakinada, some 200 acres, which we were trying to put up some technology park or an export park or something. Is there anything further — any further developments on that? Or is it in cold storage?

Sultan Baig — Chief Financial Officer

It’s done.

Ashwin Devineni — Chief Executive Officer

Well, I don’t think we’ve forgotten about it, Mr. Vijay. It’s just that we had all these other actions that took precedence. Right now, we’re also looking at land values in Andhra Pradesh and so on. And they’re not too attractive for any kind of sale at that stage. So I think we’ve been concentrating on the current efforts. And when things look better in Andhra Pradesh, I think we will take certain actions.

P. Vijay — Individual Investor — Analyst

So we don’t have any concrete plans as of now?

Ashwin Devineni — Chief Executive Officer

Currently, no.

P. Vijay — Individual Investor — Analyst

Okay. Thank you very much.

Operator

Thank you, sir. There are no further questions. Now, I hand over the floor to the management team for closing comments. Over to you.

Ashwin Devineni — Chief Executive Officer

Thank you very much for your participation in this discussion. I hope we’ve addressed all your queries adequately. So if there are any questions or clarifications that remain unanswered, please get back to us, and we’d be happy to provide answers on a wider investors platform. Thank you.

Operator

[Operator Closing Remarks]