Adani Energy Solutions Ltd · NSE:ADANIENSOL
Adani Energy Solutions — Adani Transmission — Debt Investor Presentation (September 2018)
38 slides from Adani Energy Solutions's debt investor presentation, September 2018
Slide 1: Adani Transmission Limited Investor Presentation
Adani Transmission Limited Investor Presentation September 2018 | STRICTLY PRIVATE AND CONFIDENTIAL
Slide 2: Index
Index A Introduction to Adani Group and Adani Transmission Limited B Sector Dynamics – Strong Fundamentals Supporting Growth C Regulatory Framework D Financial and Operating Highlights E Investment Rationale F Appendix 1 ATL Holding and Capital Structure 2 Financial Highlights 1
Slide 3: Introduction to Adani Group and Adani Transmission Limited
Introduction to Adani Group and Adani Transmission Limited A STRICTLY CONFIDENTIAL
Slide 4: Adani Group: India's Largest Infrastructure Conglomerate
Adani Group: India’s Largest Infrastructure Conglomerate ~INR 1,171 Bn / ~INR 1,972 Bn / US$ 17,218 Mn US$ 29,000 Mn Market Cap(1) Asset base(2) Gautam Adani, Group founder First generation entrepreneur, one of the leading businessmen of India with 30+ years experience 50+ 23,200+ Presence in 50+ co
Slide 5: Adani Transmission Limited ('ATL'): At a Glance
Adani Transmission Limited (‘ATL’): At a Glance Operational - T Under-Construction Operational - D 540 ckms 8,470 ckms 3,530 ckms 3,000 MVA 13,990 MVA 2,215 MVA 500 MW ~INR 310 Bn / ~99.9 % 22 years 3 million + Presence Across US$ 4,563 Mn Availability Average Residual High-Value Distribution (FY18)
Slide 6: Largest Pure-play Integrated Transmission and Distribution Play in India
Largest Pure-play Integrated Transmission and Distribution Play in India Pan-India presence with attractive mix of central / state and fixed return / fixed tariff projects Operational Assets – 8,470 Ckm & 13,990 MVA Central vs State Capacity Distribution Projects Under Execution – 3,530 Ckm & 2,215
Slide 7: Mumbai GTD – Asset Overview
Mumbai GTD – Asset Overview One of the largest private sector power distribution players in the country supplying power to 3 mm customers. Mumbai Power Generation-Transmission-Distribution Stable business with assured post tax RoE of 16% approved by MERC 1,892 MW of power distribution Annual e
Slide 8: Electricity Distribution: Regulated Business with Upsides
Electricity Distribution: Regulated Business with Upsides Distribution business provides the benefits of a long term asset with regulated returns and high cash flow visibility, while also giving the potential of leveraging multiple operational and technological upsides. Mumbai Distribution Business
Slide 9: Growth: Customer Base and Energy Consumed
Growth: Customer Base and Energy Consumed Customers (Mn) Energy Wheeled (MU) Max Demand (MW) 11154 1,884 3.00 8,270 1,509 2.73 FY09 FY17 FY09 FY18 FY09 FY18 Consistent with the growth of Mumbai @ 3% CAGR 8
Slide 10: Growth: Network
Growth: Network Network Length (Kms) PT Capacity (MVA) 3,600 2,492 5,933 3,619 3,860 4,618 FY09 FY18 FY09 FY18 HT Cable LT Cable DT Capacity (MVA) Distribution Loss (%) 10.59% 4,860 3,923 8.12% FY09 FY18 FY09 FY18 Adequate Network Augmentation commensurate with Demand 9
Slide 11: Diversified Counterparty Risk and Receivable Profile
Diversified Counterparty Risk and Receivable Profile Attractive mix of central / state counterparties, in conjugation with strong contractual protections limit overall payment risk Off-taker Mix Credit Profile of Off-takers Receivable Profile In terms of Ckt Kms (FY18) In terms of Ckt Kms (FY18) Ave
Slide 12: Transforming to an Integrated Model
Transforming to an Integrated Model Mumbai GTD acquisition creates India’s largest pure-play integrated transmission and distribution entity and will position ATL to leverage the next phase of growth. 1 High barriers and limited competition providing natural advantage Mumbai GTD: Robust Business 2 P
Slide 13: Focussed Strategy to Leverage Growth Opportunity
Focussed Strategy to Leverage Growth Opportunity • Focus on distribution opportunities - SEZ, Second license option, franchise, open access customers • Aiming to pursue, One Adani One Bill to cater to smart colony and smart home • Revisiting our geographic strategy in terms of risk-reward prospectiv
Slide 14: Sector Dynamics: Strong Fundamentals Supporting Growth
Sector Dynamics Strong Fundamentals Supporting Growth B STRICTLY CONFIDENTIAL
Slide 15: Electricity Sector Fundamentals Remain Robust
Electricity Sector Fundamentals Remain Robust Strong Demand For Electricity further supported by Renewable Sector Growth Electricity demand expected to grow at 7%+ in Exponential growth in renewable sector the medium term(1) foreboding well for transmission sector(1) (Billion Units) (GWs) 3.3x 225 C
Slide 16: Indian Transmission Sector Poised for Exponential Growth
Indian Transmission Sector Poised for Exponential Growth Robust growth outlook driven by strong policy support Significant under-investment in Transmission … implying robust growth in the sector with sector historically…(1) share increasing by 1.7x over next 5 years(1) INR 10 Trillion INR 9–9.5 Tril
Slide 17: Large Addressable Market for Private Players
Large Addressable Market for Private Players Government focus on transmission and distribution sector has opened up a large opportunity for the private sector over next 5 years Private sector participation is on the rise, with Large contribution is expected from the Private increasing preference for
Slide 18: Structural Factors Providing Significant Opportunities in Power Distribution
Structural Factors Providing Significant Opportunities in Power Distribution Existing systemic inefficiencies leading to increasing focus on privatization c. 89% of power distribution owned by state owned enterprises More than 100 state DISCOMs Tremendous opportunity for PPP / franchisee acquisition
Slide 19: Regulatory Frame Work
Regulatory Frame Work C STRICTLY CONFIDENTIAL
Slide 20: Well Defined Regulatory Framework
Well Defined Regulatory Framework Overview of Regulatory Bodies Governing the Sector Ministry of Power (MoP) Planning, policy formulation, processing of projects for investment decisions, monitoring implementation of projects, and enactment of legislation in regard to power generation, transmission
Slide 21: Payment Pooling Mechanism Reduces Counterparty Risk
Payment Pooling Mechanism Reduces Counterparty Risk Payment pooling mechanism substantially reduces any counter party default risk – also mitigating concerns around receivables Payment Pooling Mechanism Credit Support Mechanism and Structural Support Tariffs collected by either CTU (Inter-state) o
Slide 22: Transmission Business Model: Fixed Return and Fixed Tariff
Transmission Business Model: Fixed Return (with Cost Pass-through) and Fixed Tariff Both concession models provide significant visibility on cash flows with limited operational risk Annual Transmission Revenue for Each Project Annual Fixed Costs Incentive/(Penalty) Fixed Return Based Projects O&M Co
Slide 23: Distribution Business Model: Fixed Return with Full Cost Pass-through
Distribution Business Model: Fixed Return with Full Cost Pass-through Perpetuity-type asset license with term renewed every 25 years and well-established tariff setting mechanism with fixed ROEs on Regulated Equity Base Regulated Non-Regulated Components of Annual Revenue Requirement Wire Business R
Slide 24: Financial and Operating Highlights
Financial and Operating Highlights D STRICTLY CONFIDENTIAL
Slide 25: Strong Capabilities Underscored by Operating Performance
Strong Capabilities Underscored by Operating Performance Consistent performance across all operational assets with 99.9% availability and focus on incentive maximization Availability Across Operational Assets (%) Focus on Maximizing Incentives (Average, Min, Max) (%) FY16 FY17 FY18 Normative Incenti
Slide 26: ATL (Consolidated): Robust Historical Performance
ATL (Consolidated): Robust Historical Performance Strong Revenue Growth High EBITDA Margins 24% CAGR Margin 94% 94% 91% INR 32 Bn / US$ 476 Mn INR 21 Bn / 47% CAGR INR 21 Bn / US$ 311 Mn US$ 315 Mn INR 29 Bn / INR 20 Bn / INR 20 Bn / US$ 432 Mn US$ 294 Mn US$ 295 Mn FY16 FY17 FY18 FY16 FY17 FY18 One
Slide 27: ATL- Debt Profile Obligor Group
ATL- Debt Profile Obligor Group ATL Debt Profile Maturity Schedule -- Previous Year Rs in Crs. 1200 Bank / Investor FY16 FY17 FY18 1000 10 Yrs US Dollar Bond 3,418 3,368 800 1st Debenture 500 500 500 600 2nd Debenture 500 500 500 400 3rd Debenture 165 165 200 4th Debenture 750 750 0 5th Debenture 50
Slide 28: Investment Rationale
Investment Rationale E STRICTLY CONFIDENTIAL
Slide 29: Structural Protection to Debt Investors
Structural Protection to Debt Investors No capex for new projects to be undertaken in the Obligor Group No Greenfield Capex outside of Obligor Group limited by LRA provisions Risk New projects can be added to Obligor Group only after they become operational, Cash Waterfall Mechanism thus elimi
Slide 30: ATL – An Excellent Investment Opportunity
ATL – An Excellent Investment Opportunity Compelling Industry Strategically important sector in one of the world’s fastest growing economies Fundamentals Significant generation capacity addition expected to drive sustained growth Well defined regulatory framework with established & predictable
Slide 31: Highly Experienced Board and Management Team
Highly Experienced Board and Management Team Esteemed Board Membership Mr. Gautam Mr. Rajesh S. Mr. Anil Mr. K. Jairaj Dr. Ravindra H. Mrs. Meera Adani Adani Sardana Dholakia Shankar (Chairman) (MD and CEO) Strong Sponsorship Executive Director Independent Directors Highly Experienced Management Tea
Slide 32: Appendix
Appendix 32 STRICTLY CONFIDENTIAL
Slide 33: ATL Holding and Capital Structure
ATL Holding and Capital Structure 1 STRICTLY CONFIDENTIAL
Slide 34: ATL: India's Largest Private Sector Transmission Player
ATL: India’s Largest Private Sector Transmission Player Shareholding as on 31st March 2018 Adani Transmission Limited Promoters: 74.92% Public: 25.08% 100% 100% 74% (1) 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% ATSCL & WRSS ATIL MEGPTCL STL RRWTL CWTL ATRL NKTL PPP 8/9/10 FBTL Ghatampur BSES
Slide 35: ATL- Financial Summary
ATL- Financial Summary Rs in Cr. FY17 FY18 FY17 FY18 Particulars FY16 (Obligor (Obligor (Consol) (Consol) Group) Group) Total Revenue * 2,273 2,804 2,785 2,992 3,183 Less: Opex 266 888 896 1,004 1,118 Operational EBIDTA 2,007 1,916 1,889 1,988 2,065 Add: Arrear 237 237 872 872 Reversal due to MERC O
Slide 36: ATL- Yearly Comparison – Obligor Group
ATL- Yearly Comparison – Obligor Group INR Crs Particulars FY16 FY17 FY18 Tariff Revenue 1,927 1,895 2015 Incentive 47 31 33 Conduit Turnover 149 756 816 Other Income 101 122 128 Total Income 2,224 2,804 2992 Less: O&M 117 133 189 Less: Conduit Turnover 149 755 816 Operational EBIDTA 1,959 1,916 198
Slide 37: Adani Transmission: Consolidated Historical Financials
Adani Transmission: Consolidated Historical Financials Particulars (₹ in Cr) FY 16 FY 17 FY 18 Revenue(1) 2,118 2,139 3,239 EBITDA 1,996 2,005 2,937 PAT 368 416 1,143 Basic and Diluted EPS (in ₹) 3.35 3.79 3.79 Net Fixed Assets (NFA) 10,005 10,875 11,323 Total Assets 11,746 12,811 17,265 Total Long
Slide 38: Legal Disclaimer
Legal Disclaimer Certain statements made in this presentation may not be based on ATL assumes no responsibility to publicly amend, modify or revise historical information or facts and may be “forward-looking any forward looking statements, on the basis of any subsequent statements,” including those
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