Slide 1: REC Limited Investor Presentation: Performance Highlights Q2 & H1 FY19
REC Limited (Formerly Rural Electrification Corporation Limited) A Navratna Enterprise of Govt. of India Investor Presentation Performance Highlights Q2 & H1 FY 19 Lighting up lives through composite financial solutions……..
Slide 2: Table of Contents
Table of Contents India - Power Sector – Empowering India REC Overview Operational Performance Asset Quality Borrowing Profile Financial Highlights Disclaimer : • This presentation is for information purposes only and is not to be construed as an offer or invitation or recommendation to
Slide 3: India Power Sector Empowering India
India Power Sector Empowering India 3
Slide 4: Generation
Generating Stations 900 Installed Capacity 345 GW Generation Generation Units 2200 PLF 61% Peak Demand 177 GW 4
Slide 5: Transmission
Transmission 7000 Substations Lines 4,00,902 CKM Transmission LINES 100 nos -765KV Transformation Capacity >1300 nos –400KV 8,25,488 MVA LINES 26 ISTS >3200 nos– 220KV Transmission 10 nos – HVDC Licensees Bipole BtB 5
Slide 6: Annual Per Capita Consumption of Electricity (kwh)
Annual Per Capita Consumption of Electricity (kwh) 1400 * 1200 1122 1149 1075 1010 1000 957 884 914 Per capita Consumption 819 779 World - 2,674 800 717 734 672 Brazil - 2,516 631 600 South Africa - 3,904 China - 4,475 400 Japan - 7,371 Russia - 7,481 200 Singapore - 8,160 USA - 12,071 0 2005- 2006-
Slide 7: Estimated Demand by 2021-22 (MW)
Estimated MW Already 234,169 achieved Demand by 250,000 75% 2021-22 (MW) 200,000 172,381 150,000 100,000 50,000 0 As at 30.09.18 Target 2021-22 Source : CEA 7
Slide 8: Generation Capacity by 2026-27 (GW)
GW Generation 700 619 Capacity by 600 479 2026-27 (GW) 500 400 345 275 264 300 243 222 175 200 71 100 45 51 63 17 7 10 0 Thermal Nuclear Hydro RES Total As at 30.09.18 2021-22 2026-27 Source : CEA, National Electricity Policy 8
Slide 9: Fund Requirement (Generation) by 2026-27
Rs. Crores 933,839 956,214 1000000 Fund Requirement 900000 (Generation) by 800000 2026-27 700000 600000 542,954 (Rs. Crores) 495,082 500000 400000 291,589 300000 246,127 200000 98,902 89,837 79,706 45,855 100000 0 Thermal Nuclear Hydro RES Total 2019 - 2022 2023 - 2027 Estimated fund requirement for
Slide 10: Transmission Line Capacity by 2021-22 (CKM)
CKM Transmission Line 500,000 Capacity 470,515 Already achieved by 2021-22 (CKM) 450,000 85% 400,902 400,000 350,000 300,000 250,000 As at 30.09.18 Target FY 21-22 Source : CEA 10
Slide 11: Renewable Energy in India
Renewable Energy in India Sources Potential (%) Potential (GW) Installed Installed Target Expected 2027 Particulars Capacity Capacity Wind Power (Onshore) 11% 103 2022 (NEP) 31.03.2018 30.06.2018 Solar 83% 749 Small Hydro 2% 20 Solar >1 MW 21,651 23,023 100,000 57% 1,50,000 55% Biomass /Bagasse 3% 2
Slide 12: Distribution Modernization by 2019
Present By March 2019 AT & C Loss Below 15% Distribution 21.84% * Modernization by 2019 Gap ACS -ARR Zero Rs.0.29/U* 24X7 Power Supply Power for All Does not include data of Mizoram, Nagaland, Andaman and Nicobar Islands, 19.9 Hrs Lakshadweep * Source : https://www.uday.gov.in 12
Slide 13: SAUBHAGYA
SAUBHAGYA Universal access to Quality Power for All Overview W.e.f 11th October 2017, Govt. of India launched Rs. 16,350 crores household electrification scheme named Pradhan Mantri Sahaj Bijli Har Ghar Yojana (translated as the Prime Minister’s Programme to provide easy electricity access to all ho
Slide 14: REC Overview
REC Overview 14
Slide 15: Key Strengths
Unique and close relationship with all Occupies Strategic major players – Position in the Growth Public & Private - in and development of Indian Power sector the Power Sector across India Experienced Management Team With Nodal Agency for Sector providing 24x7 Expertise quality power to all 600,000 K
Slide 16: Major Milestones in Long & Successful journey of more than 49 years
Jun’ 2018: “Bharat 22” ETF FFO, GOI holding reduced to 57.99% Jun’ 2018: Migrated to Ind-AS 2018 Major Milestones in Long & 2017: “Bharat 22” ETF GOI holding reduced 2018 Successful journey of more to 58.32% Appointed as the nodal agency for “Saubhagya” Scheme than 49 years CPSE ETF Furthe
Slide 17: Board of Directors
Board of Directors Experienced Team with sector experience Was Principal Finance Secretary / Additional Chief Secretary and Development Commissioner to Government of Andhra Pradesh for five years. Dr. P.V. Ramesh, IAS Substantial expertise & experience in development assistance management (Governmen
Slide 18: Board of Directors
Board of Directors Experienced Team with sector experience Mr. Sanjeev Kumar Gupta Extensive experience in Design & Engineering, planning & implementation & induction of new Director (Technical) technologies in power transmission projects. > 34 years experience BE (Electrical) from G.B. Pant Univers
Slide 19: Board of Directors
Board of Directors Experienced Team with sector experience Professor T.T. Ram Mohan Specializes in financial sector. Previously, Divisional Manager with Tata Economic Consultancy Independent Director Services. Carried out policy studies for Govt and international agencies and consulting Professor of
Slide 20: Board of Directors
Board of Directors Experienced Team with sector experience Ms. Asha Swarup Has served as Secretary Ministry of I&B, Special Secy./ Addl. Secy. & Financial Adviser in the Ministries Independent Director of Commerce and Textiles. Chief Secretary, Principal Secy. in Departments of Finance, Health, Powe
Slide 21: Shareholding Pattern
Shareholding Pattern As at 30.09.2018 As at 30.06.2018 GoI , 57.99 GoI , 57.99 FPI, 21.66 FPI, 22.10 MFs, 6.33 MFs, 6.22 Others, 1.00 Others, 1.21 Insurance Insurance Individual/ Cos., 3.39 Individual/ Cos., 3.40 HUF, 8.08 HUF, 7.49 Corporates, Corporates, 1.55 1.59 21
Slide 22: Shareholders Outlook
Shareholders Outlook Top 10 Share holders as at Sept 30, 2018 Dividend Payout as a % of Equity Rank Particulars Shareholding Category Share Capital (%) Consistently high dividend paying company 1 President of India 57.99 POI 125% 2 Life Insurance Corporation of India 2.30 INS The Prudential Assuranc
Slide 23: Operational Performance
SZ SEI | a oS S - AI EPTOOK = SOX EDR S7 L = = 7 H — “a = O i = soi 9 =: = Bc: = Oy _. = oO 7 i joe =
Slide 24: Sanctions - Composition
Sanctions - Composition Sector-wise breakup of Sanctions in H1 FY19 23% Project Loans Generation Renewable H1FY19 33% 6% vs H1FY18 STL 4% T&D 56% 12M Q2 H1 Discipline-wise FY16 % FY17 % FY 18 % FY 18 % FY 19 % FY 18 % FY 19 % Generation 27,828 43 28,209 34 53,224 49 6,035 27 18,642 37 23,804 42 21,5
Slide 25: Disbursements – Composition
Disbursements – Composition Sector-wise breakup of Disbursements in H1 FY19 27% Project Loans STL Generation H1FY19 8% 33% vs H1FY18 Renewable 13% Distribution 33% Transmission 12% 12M Q2 H1 Discipline-wise FY 16 % FY 17 % FY18 % FY18 % FY19 % FY18 % FY19 % Generation 12,820 27 21,697 37 18,086 29 3
Slide 26: Outstanding Loans – Composition
Outstanding Loans – Composition State Generation 79% STL 45% 1% Customer-wise Category-wise breakup Renewable breakup of of Loans as at Energy Loans as at 5% 30.09.2018 30.09.2018 Joint 8% Transmissi Private Distribution on 30% 13% 19% 12M Q2 & H1 Discipline-wise FY 16 FY 17 FY18 FY19 Amt % Amt % Am
Slide 27: Outstanding Loans - Asset Diversification
J&K Haryana 316 5,792 Figures in Rs. Crores Himachal 770 Assam 298 Punjab Uttarakhand Arunachal 7,967 2,317 Outstanding Loans - UP 23,373 Sikkim 4,985 14 Asset Diversification Rajasthan 26,828 Bihar 11,163 PAN India Presence with loan concentration across Nagaland 28 states and 1 Union Territory 98
Slide 28: Outstanding Loans – Loan Concentration
Outstanding Loans –Loan Concentration Major Borrowers (as on Sept 30, 2018) Amount % of Total Loan S.No. Top Ten Borrowers Outstanding Assets (Rs Cr.) 1 Maharashtra State Electricity Distribution Company Limited 14,937 5.81% 2 Tamil Nadu Generation and Distribution Corporation 13,950 5.43% 3 Maharas
Slide 29: Asset Quality
Asset Quality 29
Slide 30: Asset Quality & Provision Coverage
Asset Quality & Provision Coverage As at September 30, 2018 Figures : Rs. Crores Utility Total Loan Credit Impaired Assets (NPAs) Standard Assets Total Outstanding (Stage – III) (Stage – I & II) Provision Outstanding Provision Provision Outstanding Provision Provision * coverage ratio (%) coverage r
Slide 31: Borrowing Profile
Borrowing Profile National Ratings “AAA” “AAA” “AAA” “AAA” International Ratings “BBB - ” “Baa3” 31
Slide 32: Outstanding Borrowings
Outstanding Borrowings Rs. Crores 12M Q2 & H1 Particulars FY 16 FY 17 FY 18 FY 19 Institutional, Subordinate 109,678 113,449 128,871 129,188 & Zero Coupon Bonds Foreign Currency Borrowings 21,924 21,081 25,996 30,123 FCNR (B) Loans - - 3,811 5,048 Capital Gain Bonds 17,164 19,477 23,705 23,953 Tax F
Slide 33: Outstanding Borrowings
Outstanding Borrowings Total Borrowings (Rs. Cr.) 1,69,106 1,67,517 1,98,791 2,15,603 % age 100% 7.6 7.6 5.9 5.9 3.7 3.7 90% 3.3 2.3 12.6 2.3 13.0 14.0 14.0 80% 0.4 1.1 11.6 3.0 3.0 70% 10.1 11.1 11.1 60% 50% 40% 64.9 67.8 30% 60.0 60.0 20% 10% 0% 2016 2017 2018 H1 2019 Taxable Bonds 54EC Bonds Bank
Slide 34: Funds Raised During The Period
Funds Raised During The Period Rs. Crores 12M Q2 H1 Category FY16 FY17 FY18 FY18 FY19 FY18 FY19 (A) Long Term Capital Gains Bonds 6,477 7,663 9,565 1,904 1,677 3,412 2,899 Tax Free Bonds 1,000 - - - - - - Institutional Bonds/ Subordinate Debt 15,526 18,600 26,145 6,305 5,000 6,305 5,000 Term Loans f
Slide 35: Funds Raised During The Period (Long Term)
Funds Raised During The Period (Long Term) Total Funds raised 31,255 28,495 47,406 14,063 (Rs. Cr.) % age 100% 7.8 90% 16.4 24.7 26.4 80% 26.9 70% 27.5 20.2 60% 20.7 50% 20.6 40% 65.3 30% 55.2 49.7 20% 35.6 10% 0% 2016 2017 2018 H1 2019 Taxable Bonds 54EC Bonds ECB Banks/ FIs etc. Tax Free Bonds 35
Slide 36: Financial Highlights
ameat R EC srr tre Se Financial Highlights
Slide 37: Key Financial Highlights
Key Financial Highlights Total Income for H1 FY19 and Q2 FY19 stands at Rs. 13,618 crores (up 21% Y-o-Y) and Rs. 7,299 crores (up 30% Y-o-Y) respectively. PAT for H1 FY19 and Q2 FY19 stands at Rs. 3,233 crores (up 30% Y-o-Y) and Rs. 1,764 crores (up 25% Y-o-Y) respectively. Loan book as at H1 FY19 s
Slide 38: Standalone Statement of Profit & Loss
Standalone Statement of Profit & Loss Rs. Crores Q2 H1 Particulars FY 18 FY 19 FY 18 FY 19 Interest Income 5,392 5,999 10,858 11,667 Less: Finance Costs 3,254 3,784 6,440 7,411 Net Interest Income 2,138 2,215 4,418 4,256 Other Operating Income 210 1,287 366 1,936 Other Income 1 13 2 15 Total Income
Slide 39: Statement of Assets and Liabilities
Statement of Assets and Liabilities Rs. Crores Particulars As at 30.09.2018 Assets (A) Financial Assets 263,452 Cash and Bank 3,535 Derivative financial instruments 2,842 Loans 246,977 Investments 2,821 Other financial assets 7,277 (B) Non-Financial Assets 2,650 Current tax assets (net) 177 Deferred
Slide 40: Key Ratios
Key Ratios Particulars Q2 Q1 FY 18 FY 19 FY 19 Yield on Interest bearing Loan Assets (%) 10.94 10.67 10.32 Cost of Funds (%) 7.57 7.28 7.27 Interest Spread (%) 3.37 3.39 3.05 Net Interest Margin (%) 4.35 4.01 3.72 Return on Net Worth (%) 17.68 21.64 18.15 Interest Coverage Ratio (Times) 1.61 1.67 1.
Slide 41: Reconciliation of Net Profit for quarter and half year ended on Sept 30, 2017
Reconciliation of Net Profit for quarter and half year ended on Sept 30, 2017 Rs. Crores Particulars Q2 FY18 H1 FY18 Profit under IGAAP for the period 1,215 2,516 Adjustments under Ind AS : Adjustment on account of Expected Credit Loss 53 -347 Adjustment on account of MTM accounting for derivatives
Slide 42: Thank You
Thank You 42