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Adani Ports and Special Economic Zone Ltd
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Ladies and gentlemen, good day, and welcome to the Adani Ports and SEZ Limited Q3 FY '23 Earnings Conference Call, hosted by DAM Capital.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Mohit Kumar from DAM Capital. Thank you, and over to you, sir.
Thank you, Faiz. On behalf of DAM Capital, we welcome you all to the Q3 FY '23 Earnings Call of Adani Port and SEZ.
We have with us from the management, Mr. Karan Adani, CEO and whole time Director, APSEZ; Mr. Subrat Tripathy, CEO, Ports Business; Mr. Vikram Jaisinghani, CMD and CEO Adani Logistics; Mr. D. Muthukumaran, CFO, APSEZ; Mr. Charanjit Singh, Head of Investor Relations and ESG APSEZ.
Before we start the call, we request you to please restrict your questions to quarterly results or only strategic and business-related question. I request participants to reserve their group-related questions to a separate interaction with the group team.
Now I will invite Mr. Karan Adani for opening remarks on the quarterly results followed by Q&A. Over to you, sir.
Thank you. Good evening, everybody. Welcome to the 9 months FY '23 conference call to discuss the operational and financial performance of Adani Port and SEZ Limited. I will keep my remarks brief so we can have enough time for Q&A.
You will be pleased to note that APSEZ said has reported a robust set of numbers for the concluded quarter and strongest ever 9 months performance in its history. I can now state with confidence that we are on track to achieve our full year revenue and EBITDA guidance provided at the start of the year. We are likely to close the year at the upper end of the guided revenue and EBITDA range.
Talking about Q3 numbers, total revenue from operations increased by 18% year-on-year to INR 4,786 crores, while EBITDA increased by 15% year-on-year to INR 3,011 crores. Of the total revenue from operations of INR 4,786 crores, port business contributed INR 3,936 crores, logistics business contributed INR 490 crores, and the balance INR 360 crores is from SEZ and O&M business.
Of the total EBITDA of INR 3,011 crores, port business contributed INR 2,737 crores, logistics business contributed INR 142 crores and the remaining INR 132 crores is from SEZ and O&M business.
The port revenue per tonne has increased by INR 58 year-on-year which is a growth of 13%. Of this, INR 15 per tonne is due to depreciation of rupee against dollar and the remaining INR 43 per tonne is due to increase in share of high-paying customers and a higher volume growth outside the JV terminals.
Just to give you an example, in Mundra, the volume of JV partners has declined 9% year-on-year, while the non-JV container volume has increased by 11%.
As you can see, overall Mundra port volume -- container volume has remained flat. But because of this, our average realization at Mundra has increased by 25% year-on-year. Our port EBITDA margin continues to be at 70%. Logistics revenue has increased by INR 190 crores year-on-year, which is a good 64% jump. This is in line with the business growth trajectory that we have been targeting. Logistics EBITDA has grown by 80% year-on-year, and the margin expanded by 400 basis points to 29.3%. We expect to see a similar growth in the logistics business in the coming quarter 2.
As of March '23, we are expecting our net debt at INR 44,000 crores which makes -- which takes into account payment for Haifa Port, ICD, Indian Oil Tanking and the ongoing CapEx in line with the guidance at the beginning of the year.
Finally, on FY '24 guidance, we are expecting FY '24 EBITDA to be in the range of INR 14,000 crores to INR 15,000 crores, while the CapEx is likely to be in the range of INR 4,000 crores to INR 4,500 crores. The cash surplus generated during the year would be used to repay and prepay loans of INR 5,000 crores. This will result in our net debt-to-EBITDA ratio of around 2.5x.
Let me conclude by saying that our business fundamentals remain strong, and we are well positioned to continue our growth trajectory while being able to solve -- while being able to also deleverage APSEZ's balance sheet.
With this, I'll just open the line for Q&A.
[Operator Instructions] The first question is from the line of Sumit Kishore from Axis Capital.
My compliments on a strong P&L performance. My first question is on your CapEx guidance for FY '24 of INR billion 40 to INR 45 billion, which appears lower than our expectation based on interaction earlier. What is the breakup of this CapEx across key ports and logistics? And has this number seen a reduction versus earlier guidance?
So roughly, the port CapEx would be in the range of INR 3,500 crores to INR 3,800 crores. And the balance would be from the logistics business. This is not a reduction due to growth. I think it is just that a lot of our projects which were coming -- which we had started this year, they are coming -- they are maturing, and that's where we are on the tail end of completion of these projects. So that's where the CapEx is coming lower.
Since -- was that in logistics and would continue to be momentum in CapEx. So will that pick up in FY '25, then given your sizable growth aspiration in logistics?
So logistics, it will depend purely on the kind of growth that we are seeing. If we do see our utilizations increasing in FY '24, then we would look at expanding on that front in FY '25.
My second question is around your EBITDA guidance for FY '24, which implies around mid-teen growth on a year-on-year basis. Based on the reported numbers for port volume growth, FY '23 seems to be -- is likely to end around...
Sorry, your voice is breaking. We can't hear you clearly.
Sir, the line for the current participant has got disconnected.
The next question is from the line of Love Sharma from Lombard Odier.
Just one quick follow-up, I think, on the targets, you mentioned about the net debt and the leverage going forward FY '24. Could you just indicate what kind of debt reduction -- are you targeting any specific loans or bonds you have earmarked for prepay et cetera? And the second would be the how should we think about as you are getting more comfortable with the leverage where it's currently sitting at, let's say, 2.5, 3x, do we expect some differences to be taken out at some point in feasible manner in the business?
Yes. So on your first question, as we have mentioned that we are looking to pay and prepay INR 5,000 crores. We don't have -- at this point of time, we can't tell you exactly which bonds or which liability we will be paying down. But -- on a gross basis, you will see a reduction of INR 5,000 crores on our debt.
On your second question on the dividend, we have a stated policy on dividend payback and payback to shareholders. I think we will -- we would look at following that policy. And if there is any modification on the dividend that we would look at, we would obviously look at the amendment in the policy. But right now, we are looking at purely from the -- we would look to follow the policy what we have laid out in the capital allocation.
Sure. And sorry, Karan, so can you just remind what would be the current policy as a percentage of income or something?
Yes, it is 20% to 25% of our PAT is the current policy.
Okay. And just one last question for me. The Haifa Port, you mentioned that that will be accounted -- the payment would be accounted for this quarter in the Q4. Is this the entire payment which we paid right now? Or there will be some other stagger payments through...
Our entire payment has been done. We have already taken over Haifa Port.
The next question is from the line of Eric Liu from Nomura.
I have two questions. I think first question is about your current progress for the -- given that this will be kind of, yes...
Sorry to interrupt you. The audio is unclear from your line.
Can you hear me clearly?
Yes.
Okay. Cool. Okay. So first question is about any progress update and the timeline about the Myanmar divestment because this is also another ESG concern for the investment?
So Myanmar divestment, we are just waiting for certain CPs which are government approvals. Once those approvals are through, we should be able to complete the transaction.
Do we have indicated timeline regarding this approval and transition?
It would be either this quarter or next quarter, max by next quarter. Ideally, we are pushing for this quarter, but max, it would go to next quarter if for whatever reasons we are not able to get approvals in agreed timelines.
Got it. Second question, I think I just want to verify some number. I think between Slide 29 and the Slide 30, when you're talking about the reported cost, thanks for your time maturity profile, but your reported quarter is talking about INR 450 -- around INR 455 billion, and then your time maturity profile having other days INR 430 billion to INR 431 billion. So what drives the difference? Are they coming from letter of credit or other stuff that kind of payments?
If I understand your question correct, I could pick up that the total outstanding debt is INR 45 billion. What was your next question?
Yes. So next question, I think on Slide 30, you provide a detailed debt maturity profile. But because of the adding up together is INR 431 billion or INR 432 billion something. So this INR 20 billion this...
That's the short-term loan.
It is the working capital loan or...
That's correct, working capital.
Next questions from the line of Ashish Shah from Centrum Broking.
My question is, again, continuation to the first question on CapEx. So if you could -- you did indicate that for the port business, we are looking at INR 3,500 crores to INR 3,800 crores of CapEx. Any detail you could share in terms of which assets we are looking to expand? And what about our plans in Sri Lanka or any of the newer assets? Are we looking to slow down those CapEx?
No, we are not looking to slow down. Basically, whatever projects we have started this year, we are just looking at completion of those projects. And we have -- we firmly believe that we have enough capacity with all the projects that we have started this year and with their completion. We are very confident that that capacity would be enough to take us for the next 2 years' growth. So none of our projects are stopping. It's just the projects which are coming up towards the end tail of the -- of completion at least in some of the projects in India. But the detail we can provide at the -- at a later stage.
Sure. The second question is on the logistics side. So we have a broader medium-term target of tripling our presence in terms of rigs and 60 million square feet of warehousing. So how are we looking at those targets? Are we looking at those targets in the same time frame or probably an extended time frame?
So on the container side, we are looking at -- we are looking to first whatever we have expanded and with whatever we have constructed this year. We are looking to get them up and running, and that's where the focus is.
On the rail side, as and when the new order -- as and when the orders come, we would be looking to -- we would look at expanding. So those guidance do not change.
On the -- just to give you an idea, in terms of rail, next year, we have a 100 trains, which are under -- which are already placed under order, which we would be looking -- which would be coming online over the course of next year. So none of our growth targets change. It's just a matter of right now, what we are looking at is whatever we have started, we want to get them up and running and spread those assets.
The next question is from the line of Abhiram from Deutsche Bank.
Congratulations on a good set of results. I have two questions. The first question was on -- have there been any intercompany loans made post the quarter after the December '22 to outside the Adani Ports group? And the second question is broadly in reducing CapEx, as you mentioned, with the other business going down, why you see margins for the same in FY '24? Is the growth in EBITDA tied to the expansion of the logistics business that you carried out this year? Or is that primarily from the port side?
So first, let me answer your first question. Let me categorically say there is no ICD, there is no loans, no advances given to any group companies at -- even after the quarter. So I just want to categorically say that. And we have a very strong covenant around any of those -- any of the loans and advances that -- for a group company. And these are covenants which have been tied up in -- which we have given in our bond documents. So let me just categorically say that there is no ICD, which has been given -- forget this quarter, last quarter, any point of time in the last 2 years -- 2 to 3 years, nothing has been done.
On the second question, our growth is -- I mean, our margins and our growth is not tied up to the CapEx. I think whatever we have done this year, we -- our -- the capacities which are coming up this year, they will keep -- they will take the logistics business forward at least for the next 2 years. And we look -- and with the mix changing obviously, between the container and the bulk volume in the logistics business, that will also have been improving their margins. We do believe that there is possibilities of increasing the margin in the logistics business than what we have done this year.
The next question is from the line of Priyankar Biswas from Nomura Financial Advisory.
So my first question is regarding your CapEx guidance. So at the upper end, it is INR 45 billion. So is it just only organic CapEx? Or does it include some potential for acquisition as well within this?
No, it is only organic CapEx.
Okay. So the reason why I asked this question is, like, for instance, if there is some good assets like Container Corporation, let's say, for a strategic divestment, it comes up, so do we have a plan in place to essentially raise funds to possibly -- because you had earlier expressed interest to probably go from this asset whenever it comes up.
Yes. So let me just say that when we look at from an overall perspective, I think our priority is to deleverage and as guided, we would like to bring our leverage -- we would target to bring our leverage down to 2.5x., our net debt-to-EBITDA. That said, CONCOR is a strategic asset. If we are able to find a way to do the acquisition without increasing our leverage of 2.5x, we would look at it. But otherwise, we would -- as I said, that's how we would look at it. But our priority and our first order of preference is to deleverage to 2.5x net debt to EBITDA.
That's a very clear answer. And just one bookkeeping question, so need a clarity on that. So like if I see the waterfall that is in page -- that is in the Slide 29, it seems that there is a debt repayment that you have done of around close to INR 6,000-odd crores. But when I see the gross debt between March 2022 and December 2022, it is broadly the same. So can you explain this difference? Because this is something I'm not able to reconcile.
Gross debt INR 45,000 crores, and this INR 45,000 crores, we have paid with earnings. Priyankar, this is actually, this is Muthukumar. About INR 2,500 crores of gross addition has come from interim in December 2022. And the balance is actually the net cash that we were carrying in March that we have now paid out.
But pardon me, so -- but still the net cash difference so that still is reflecting in the net debt. So ideally -- so this figure, the net debt figure has gone up by, I think, close to INR 7,500-odd crores. So I'm not able to reconcile that, even with a INR 6,000 crore return.
Can we revert to you with a little more detail in a granular form. But basically, the point is on the one side, we have paid the loan that we had as of March but we have borrowed more on account of acquisitions on [indiscernible] and buyer credit of INR 1,200, and impact of MTM is INR 2,500. But I get your point, we'll come back to you.
Okay. And sir, just if I can squeeze in just one last. So earlier, you had given an FY '23 volume guidance of roughly 350 million to 360 million tonnes. Can you give us the similar volume guidance for FY '24? And what is the FY '25 target, like we had a 500 million tonne earlier?
Yes. So FY '24 guidance, we will give it to you at end of March. Let February and March go by. But we are very confident on the EBITDA guidance that we have given you.
Okay. And will this 500 million tonne target remains for FY '25? Or do you see a slippage of let's say 1 or 2 years? .
No, I think we will achieve 500 million tonnes.
The next question is from the line of [indiscernible] from MetLife Investment Management.
So I just have a couple of questions. So the first one would essentially be, could we just sort of get an idea of the INR 315 crore ForEx impact to PET because it is quite significantly larger from the last year. So could you just clarify what this impact actually is?
This is basically we have a $4 billion debt book. And in that $4 billion debt book, the movement of rate between September 30 and 31 December is actually recorded in 2 places. $2.7 billion is actually our designated bonds, all FX movement on that is in the OCI. And on the balance, $1.3 billion, we have actually recorded above the line, so which is in the MTM that you see. And just to remind, we don't hedge any of our FX exposure, basically because we have dollar revenues or dollar-denominated revenues that come from our container business, and that is even year-by-year more than any maturing amount. And even as the total book is more than our revenues -- sorry, revenues is more than the liability. So we don't hedge. There is a natural hedge.
Okay. No, that's great. And my second question, I think, just comes a little bit more on sort of acquisition. So you mentioned earlier that you don't have sort of any target for acquisitions built into guidance this year. But could we assume any sort of acquisitions that are in your view besides CONCOR? Are there any that you are looking at. I do remember seeing the news about the defaulting Port Karaikal. Is that still sort of meeting your scope of acquisition? Or is that maybe being put aside at this point?
No. Karaikal Port, we are already an H1 bidder. And our guidance bakes into that because that is an already an acquisition which has been approved by the COC. So -- and we do expect that port to come in. But there is -- but our guidance takes that into account.
Okay. So just to confirm, the CapEx guidance does include the potential transaction for this cost.
Yes, that's right.
All right. Okay. And just last comment from me. For the earlier question mentioning about that management will revert on a detailed -- that granular information, could I also be given that sort of information?
Yes, we will send across.
The next question is from the line of Sherry Chen from GaoTeng Global Asset Management.
So my first question is that for the maturities in this coming year. Wondering what company's plan as we noted that the majority of them are onshore debentures.
As the majority of them are, can you please repeat that part?
Noted that a majority of them are onshore debentures.
Yes, yes. So actually, we have totally -- I'm telling you in rupees now -- in crores, INR 8,500 crores approximately in rupee debenture. And they actually -- in next year, we have INR 1,600 crores out of that coming as maturity. And in the next year, there is another INR 400 crores of other short-term loans and loans that come up for maturity, so totally INR 2,200 crores. There is no other maturity, whether onshore or offshore in the next year. It is only in the following year we have the first dollar bond coming up for sort of payment in FY '25.
Yes, that's clear. So wondering what company's plan for this maturity?
Yes. So as far as the coming years' maturity is concerned, we'll pay that -- we have shown the cash flows that will be generated by the company from operations starting from EBITDA after CapEx, we are generating net cash of INR 5,000 crores. So we'll use that to prepay the maturing debt as well as we will target to prepay some of the other debts. So totally, we'll pay INR 5,000 crores of debt in the next year. And the following year, we have same amount of money coming from operations. So even if we don't do anything else, we'll be able to prepay that year's maturity from the cash flows as well.
Sure. That's clear. My next question is that this company at this moment has any plan to doing some tender offer considering current bond price under pressure?
Sorry, a tender offer of -- no, we don't have -- we don't have any plans right now.
Okay. The last one is about the acquisition of the Haifa Port. So I noted that in the announcement, you said that this transaction has been concluded. So could you elaborate a bit that whether all the related debt financing has been done? And whether you have consolidated already the financials coming from this new port?
Yes. So as you know, we have already concluded in January 10. We have taken over officially the Haifa Port. The amount has been paid to the government. Quarter 4 will be the first quarter where Haifa Port balance sheet will get consolidated into APSEZ. I'll request Muthu to talk about the debt for the financing of the Haifa.
Yes. So far, in Haifa, there are actually multiple components of financing. The total acquisition cost was $1.2 billion. We have actually taken $300-odd million of local debt, which is nonrecourse, and we have $475 million of dollar debt, which is actually a mid-line financing that APSEZ has guaranteed, and the balance 2 components, 70% from us and 30% from our partners, which is $230 million and $110 million of equity. So these 4 actually added up to the total purchase consideration that we have to pay.
The next question is from the line of Himanshu Porwal from Seaport Global.
Congratulations on strong results. I have a couple of questions. So first, on the liquidity side. Can you provide like what is your total liquidity, including your cash balances as well as any revolving facilities? And the revolving facilities, what is the unutilized portion if at all?
So we have INR 3,000 crores approximately of cash balance as of today as we speak, which is actually sitting in the FD. And we have about net of INR 2,500 crores -- INR 2,200 crores of commercial paper limits that we can actually borrow, which are not utilized.
And my second question, I mean it's a bit naive, but just for clarification, do you have any portion of your offshore assets? And how much of that will be contributing to your overall EBITDA levels from the offshore portfolio?
Can you just repeat that question, it was not very clear.
What is the portion of your offshore assets, if at all? And how much does it contribute to the consolidated EBITDA?
Right now, none of the offshore assets are operational. So as I said, Haifa Port will get consolidated in Q4, which is the operational asset, otherwise, none of the assets are operational. So they don't contribute into EBITDA.
And how much will this Haifa Port likely contribute as a percentage if you can say so?
I'm trying to recollect from memory, we actually made a detailed presentation in last October, I think. So next year, if I remember right, was $48 million -- $40-odd million is the expected contribution. We gave a year by year in that presentation.
For next year, not for the Q4, for next year. For full year.
Next year whole $48 million of EBITDA.
The next question is from the line of Imtiaz from Barclays.
Before I ask my questions, can I just clarify something that you had earlier said. I might have misunderstood you, but I recall you saying that your first U.S. dollar bond maturity is in 2025. But I thought you said 2024 maturity, is that right?
I meant FY '25, which is actually July '24, first quarter of financial year '25.
Okay. That's what I thought. If I can just ask you two questions on my own. The first one of your reported debt as of September, I think it was around INR 420-odd billion. How much of that is secured debt?
22% of it is secured debt.
Has that changed materially now in terms of percentage if you can give us guidance?
No, it hasn't changed materially. I mean it has not changed at all in the percentage term.
Okay. And my second question is, could you just tell us how much of your assets -- how much of those assets have been pledged or incumbent? The percentage would do.
Just one second. So from the 22% that has been secured, which are basically the INR 8,000 crores of NCD, those are -- there, the asset has been pledged, which is roughly at 12,000 -- 1.25x of that.
We needed an FSTR of 1.25x. And like I mentioned, in first quarter, we will pay off INR 1,500 out of which. So the FSTR will -- I mean the total assets that we need to give for cover will come down.
Sorry, can you just repeat that? I didn't understand that. So of your total debt, 22% is secure. And what is the INR 80 billion number that you mentioned?
See, we have total NCDs of INR 8,500 crores. That is the only secured loan that we have in the books. And on the INR 3,500 crores, we needed to give an FSTR of 1.25x. And we will pay off INR 1,600 crores out of that in the next financial year.
The next question is from the line of Luke from Pictet.
I'll be very quick. So could I also give update on the Page 29 and Page 30, the reconciliation of the debt numbers that you mentioned earlier, because cash flows, the December 2022 numbers of...
Sorry to interject, your voice is a bit blurred. Can you please ask again? We couldn't hear you clearly.
I'm sorry. Okay. I just wanted to just make sure I can get the updated numbers on Slide 29 and 30 because the debt numbers in 29 and 30 are not lining up.
Yes, sure.
And can I just clarify something before I ask one more question. You said to one of the other investors that you cannot -- any tender for -- Are you allowed to buy that your own dollar bond in the open market and to what extent can you do that because as is [indiscernible] there nothing due imminently, any INR 5,000 crores budgeted or estimated in the coming FY. But that's -- the total debt yield is mainly in rupees in FY '23 to '24. So why wouldn't you buy back debt at a lower dollar cost? And the real question is -- and then the final question is, do you have new or anything that is recent in terms of related party debt?
Okay. So let me go in the reverse order. Related party, Mr. Adani clarified that there have been no related party transaction in terms of debt outside of APSEZ. All related party transaction is APSEZ's subsidiary, wholly owned subsidiary or JV. There is no financial or loan transaction above APSEZ, number one.
And number two, to your question on how do we actually buy back, our bond document does not provide for buyback except towards the maturity. However, if at all, we do any buyback, we will actually do it under the loan management scheme that you actually see in the marketplace. Like any other bond issuer, if at all, we wanted to actually do some tender or market buyback, we could do that. But as we said, there is no current plan. And we have not guided exactly which particular bonds or rupee that we will repay out of that INR 5,000 crores that we will deal with specifics as we go forward.
But right now, our guidance is that we want to reduce the total debt in the balance sheet of the company. And we will actually work with the market to come up with the best possible outcome, which is sort of good for both us and them. But our main objective is that we are generating cash. We want to use that money to repay the debt after meeting all the growth CapEx.
Understood. So you wait for your friendly brokers to come up with the proposals on that one.
Yes, sure. And to your first question, actually, I would like to answer two parts, the first one is what you asked just now. You wanted us to reclarify the difference between Page #29 and Page #30 in the debt. If I can use rupees crores, if you don't mind. In Page #29, December 2022, we are showing a total growth debt of INR 45,534 crores, whereas the table that we have put in Page #30 adds up to INR 43,164 crores. So this INR 43,164 million is the long-term dated debt. The rest is short-term undated debt. That's how actually it stacks up. That is the first part. Is that clear?
Yes.
Okay. And the second part, I think there was a question earlier on how come we have same INR 45,000-odd crores as of March as well as December, and still, we are showing INR 6,000 crores of repayment? So let me actually explain that to you. We had a total debt of INR 45,453 crores in March 2022. And we have actually repaid INR 6,000 crores. So therefore, our gross debt would have come down to INR 39,000 crores. And this INR 6,000 crore was actually repaid from the cash flows of the company. We had cash balance in March 2022. So we used that INR 13,000 crores that we had both for CapEx as well as for debt repayment. So our number came down to INR 39,000 crores.
And in the last quarter and the previous quarter, we borrowed INR 2,300 crores short-term loan, which is again the difference that we spoke about between Page #29 and 30. And we also added buyers credit of INR 1,200 crores. And there is a noncash mark-to-market addition in the gross debt of INR 2,500 crores. So if you add these 3 numbers up, it is to the rupee. So we are back to actually INR 45,000 crores of gross debt.
If you could sum up on behalf of the other general investors, you repay when you say a loan repayment is long term. And so you had a short-term credit and the other one. So these brought the number on the left-hand like it to what it is, correct? So is this to simplify your explanation? I mean -- that essentially cost on that increase?
That's correct. Our gross debt...
Correct. Okay. So you repay long term of roughly INR 6,000 crores and you increased by close to INR 9,000 crores?
No, we increased same INR 6,000 crores incidentally.
I'm sorry, my line was -- sorry, again, what was that?
We started 1st April, which is 31st March 2022 with INR 45,000-odd crores of debt. And we repaid INR 6,000 crores. So our gross debt came to INR 39,000 crores. Yes. So we borrowed -- but for INR 2,500 crores, we borrowed everything. And INR 2,500 crores is the MTM accounting impact. So we're back to saying INR 45,000 crores of gross debt.
The next question is from the line of Aditya Mongia from Kotak Securities.
Congratulations at a very strong set of numbers. And to Karan, congratulations for becoming member as part of [indiscernible]. The first question that I had was linked with the leverage guidance for FY '24 and the continued spending that it reflects. I wanted to get a sense of what is the thinking behind the change over here? Is it more a medium-term target from here on at 2.5x would be? Or is it a 1-year phenomenon as things stand at this point of time?
No. So our philosophy remains the same, which is actually -- the 2 points that we wanted to emphasize by making that number out as a guidance is number one, we have a very strong operation that generates cash. And we guided that EBITDA for the next year will be INR 15,000 crores, and it will generate enough cash.
And the second point that we want to say is that we will have cash balance to the extent we foresee CapEx requirements. And if we see in the medium term there is no need for that cash, we will use that to repay the debt with the same cash that we generated from the business. So our idea is to generate cash and use it for growth. And whatever is left, we will repay the debt. So that's the message we wanted to communicate. And the math add up to 2.5x leverage.
And again, just clarifying from what I heard on the call, all potential spending, would we see in any context of whether one can conform to 2.5x leverage for FY '24? My simple question is, is this a 1-year statement that you are making? Or if there's some term statement that from here on for the next 2, 3 years, all spending decisions will be done in context of maintaining a certain 2.5x leverage?
We are not actually committing to 2.5x for the medium term. What we are telling you is what we can see as we sit in the dashboard right now. As you can imagine, we will be dynamic. If there are growth opportunities in the following year, we will pursue them. Otherwise, we'll continue to deleverage, and it can even go down even below 2.5. So we'll have to be sort of doing what the market offers at that point in time.
Understood. That clarifies. Sir, the second question that I had was that your guidance for FY '24 on EBITDA versus FY '23, if I take the midpoint is almost high-teens kind of growth that you are envisaging?
I'm just trying to get a sense of -- on an organic basis, can volume growth for you -- and on a comparable organic port-wise basis, can the 10% come in from that kind of quantum and the remaining coming in from other parts of logistics and an organic or -- just kind of trying to get a sense of what kind of organic port growth can actually happen and any downside that you may see happening?
See, basically, I mean, I would like to mention and reiterate that we will give specifics of the budget at a later point in time. We are giving now in aggregate. However, I wanted to put this in context. If you see our 9 months number, our actual EBITDA growth is 22% from April to December, the EBITDA that the company has achieved. Like you said, the guidance of 15,000 is actually mid-teens or other high teens, I mean like 17%, 17.5% growth. So it's well within what we have already achieved. And this is right now all organic growth that we could stack up and do a bottoms-up and come to this range of our expectation of EBITDA. And this also reflects an anticipated marginal slowdown in the economy or a lower growth, let's put it this way. FY '23 did see very good growth. So in our base case, we are assuming that growth will be slightly lower in FY '24.
The next question is from the line of Achal Lohade from JM Financial Institutional Equities.
I just had a couple of questions pertaining to the quarter. If you look at Q-o-Q, the volume drop seems to be very large, 13% drop in terms of volume. And in terms of revenue also, there is a drop. If you could elaborate a bit in terms of key ports like Dhamra, Krishnapatnam, Gangavaram has seen a sharp decline in revenue and the volumes. If you could elaborate a bit as to what has played out and how we're looking at for the fourth quarter?
Some of these are the externalities with respect to the high duties which the government introduced in between the years. So there were duties which are introduced on iron ore, steel exports and also imports, wheat was completely banned, rice again was banned and fertilizers, sugar also suffered certain duties. So as a result of which, certain volumes -- certain commodity volumes at specific ports was impacted. Otherwise, if you look into our realizations, our realizations largely have either remained in the plus positive territory or mostly stable. And I think Karan, when he started, he did mention about the improvement in realizations at some of the ports where you can have a look at the Gangavaram Port, at Krishnapatnam at Mundra specifically. So this phenomenon is not very specific to us. It is more of a macro driven by the government actions.
Understood. Just a clarification, Karan had talked about Mundra port, their non-JV volumes have seen a substantial improvement, while the JV volumes have declined. Can you elaborate a bit what has driven that? And how do you see it evolving?
See, for us, if you look from our business perspective, the realizations at -- for non-JV volumes is much higher, significantly higher in comparison to the JV partners. So if there is anything which is very specific phenomenon related to them, we have managed -- we are still managed, you can say balanced it out, particularly even at Mundra port in terms of growing the non-JV volumes. And in return, we have managed to improve our realizations. So there could be very specific events to the partners, but these are short-term lived. But this has enabled us or you can say, triggered us to look for ventures outside the JV.
Just a clarification. If you could help us with the transshipment volume at the company level and Mundra Port for the quarter or 9 months, what is...
See -- on a Y-o-Y basis, it is relatively lower. But at 9-month basis, the TPA is 83% versus 9-month basis -- Sorry, this is...
20% roughly is the TP. It's a little less.
And that is transshipment right now?
Yes, correct. Transshipment is less than 20%.
Mundra Port you're talking about, right?
Yes. For APSEZ at level, we are talking of a volume of 1,350 overall.
This is a 15,000 TEUs basically.
The next question is from the line of Bharat Jain from HSBC Hong Kong.
And a lot of questions have been answered partially as the line was very patchy. So if I can just very quickly clarify some of them. In your FY '24 EBITDA guidance, does it include maiden contribution from Haifa? That's my first question.
Yes, it does include contribution from Haifa.
And with respect to net debt-to-EBITDA guidance that you have offered like ending up at about 2.5x by end of FY '24, does it give us impression that following that year your probably CapEx run rate would double organically or you would start to grow inorganically because we'll be comfortable with that level? Or do you think that medium term, probably 2x the new 3x or between the 2.5x the new 3x, if at all?
I think organically, we would be comfortable at 2.5x. Actually, it might come a little lower also because our EBITDA -- as our EBITDAs keep growing, our capacity addition would not be in line with the growth of the EBITDA because a lot of capacity has been added, which will take us for the -- on a medium-term basis, which will take care of the growth for the medium-term basis. So we feel comfortable that on the port side what CapEx we are going through. And as a company, 2.4 to 2.5x should be good enough to take care of the organic growth.
And one thing that in the past used to comment on, we have seen that the pledging has come down at the promoter level. But is there any tangible or a timeline where you think that that will unwind? Or this is something that are not able to comment at this stage?
So, Bharat, the pledge is gone now, and there was a payment made yesterday, and it has come down below the levels which we have seen observed in December, and it will further go down from these levels.
Yes. I was more keen on that -- is there any timeline that you are looking at that over the next 12 months? We probably would see...
That's right. In the current financial year, it will go down towards 0.
And one final question...
Let me -- Bharat by financial year I mean the next...
FY '24, I understood that. And one final question, which -- I think Karan addressed repeatedly but just for my clarification purpose, because in -- because we were running a higher amount of cash at the end of last fiscal year. And in the annual report, there was a sentence underneath I think balance sheet where subsequent amount of loan was given to the intercorporate but which was guaranteed by a related party. Which is perhaps legally is not a related party, but how should we think about those kind of transactions from here on? Do you think that any of such intercorporate loans guaranteed by related party also will disappear?
Bharat, as mentioned earlier also, and as clarified by Karan also on the call that we are very clear that there are no related party loans, which were given in the past 2 to 3 years. Now coming to that, it's a treasury operation. We do seek security from the company, which is borrowing. And as a result of which, if they have come up with the security mechanism, which gives the comfort that was executed. This is one-off phenomenon with respect to the security. You could see the volume of loans which have been given and how they get given and get rotated. So it is very clear that it is one-off sort of thing, which is because of certain payable by a particular company, nothing beyond that.
So we shall not expect those transactions going forward, is that you're saying.
They have not been there in the past, if you see the last 2, 3 years also, that one-off transaction is not a reflection of the treasury operations, which they have been carrying.
The next question is from the line of Matthew Zeng from BIMCO.
I just have two questions. First of all, can you remind us after the acquisition of Haifa Port is carried, is there any other acquisitions that you have committed to but they're not fully settled and what would be the amount of it?
We have a port through bankruptcy court, we have taken Karaikal Port, which the committee of creditors have approved our bid. We have come out H1. And this amount is INR 1,500 crores over there for the acquisition of that port. And that has been baked into our guidance for the next year as well.
So that's included already in the CapEx guidance?
Yes, that's right.
Got it. Got it. And then the second question is are you restricted by any covenant to in other words, what's the maximum amount of assets that you can hedge to resecure that in case of this?
Sorry, can you repeat the question, please, Matthew.
I just wanted to understand a bit better of the flexibility in terms of raising secured debts. I understand you just mentioned, right, that currently around 30% of the -- 32% of the debts are secured. Just in case you need additional secured debt, what's the maximum amount of assets that you can pledge to raise secured debt without breaching any covenants?
We actually -- we have assets sitting in multiple subsidiaries. Our entire gross capital employed is technically available for security if we want to give, which is as per the last balance sheet, INR 46,000 crores. INR 46,000 crores, which is INR 460 billion.
The line was breaking up a little bit. Can you repeat the number again.
Yes, the gross PPE, which is in the balance sheet, return on value is close to INR 46,000 crores, plus any CapEx that we will do in the near term. But currently, it is INR 46,000 crores, which is INR 460 billion.
The next question is from the line of Justin from [indiscernible] AMC.
My first question about the intercorporate deposits and loans have been answered. My second one is just on Myanmar, I didn't catch it. You were mentioning about certain approvals forthcoming. Can you explain a bit more, but where this approval coming from?
We need statutory approval, as you can imagine, from any transaction perspective from the authorities. So we are working on them from the perspective of the buyer.
I see. So the statutory body is in Myanmar or in India?
Myanmar.
Okay. I see.
We don't need any approval from India for this.
The next question is from the line of Nikhil Abhyankar from DAM Capital.
I've got just one question. So can you just give us an idea as to an update on the concession renewal policy that GMV is working on? Will the policy be finalized in the near term?
GMV has engaged with the stakeholders, primarily with Pipavav Port and with other stakeholders as well. And we are expecting them to come out with the guidance very shortly now, preferably about 3 to 6 months right now.
The next question is from the line of Christine from GIC.
Just a follow-up on the leverage numbers and also the treatment of Haifa, because you mentioned that it will be consolidated from Q4, right? So on the debt part, because I think you mentioned there's 2 parts. One is nonrecourse. And then the second portion that is guaranteed by APSEZ. So for the debt number then, which number are you consolidating into your...
We consolidate the whole thing, the whole number.
The one including nonrecourse. And what's the number again, can remind me, sorry?
See, $1.2 billion is a total transaction value, out of which $230 million and $110 million, which is together $340 million is the total equity that has gone in. The balance will be consolidated as a debt. From accounting perspective, the whole thing is a debt. Sorry, I must also point out that in the same breath, actually, the company is carrying a cash of close to $600 million, and today generated more so close to $700 million. So while $840 million will be consolidated as a debt, there will also be a cash balance in the company.
Right. Okay so net of that cash, which is $700 million.
Yes, the net debt will go up only by this amount.
Okay. Got it. And I have one question on -- I guess, just your conversations with rating agencies so far given that I think S&P changed the outlook to negative yesterday. What's your, I guess, discussions with the company and so far, is there any like action required any kind of like documents that you need to provide to them? And any kind of like metrics that you need to maintain your investment grade rating?
So we have been in very detailed engagement and we have shared a lot of information with the credit rating agency. And basically, there is no particular condition that have been put on a metric that has been communicated to us for us to maintain, fundamentally because of all the cash flow and the leverage points that we keep emphasizing on this call as well. So our balance sheet is strong and getting stronger. So therefore, there isn't anything outstanding in terms of action points with credit rating agencies, but I'm sure the engagement will continue with them.
The next question is from the line of Christopher [indiscernible] from Kalamata Investment Management.
Just clarification. I know they asked this question and you replied, my line wasn't great. Can you reply what's the difference between the Slide 29 and that's on Slide 30 in terms of total debt, please?
Actually, there are repeated questions. What we will do is we will supplement with a separate sheet just on this following this call, sometime later today or tomorrow India time so that all of you have the same level of information, and we'll try to actually give a little more detail and color on this.
That said, let me actually tell you, the gross debt as on 31st December is INR 45,000-odd crores, and -- which is on Page #29. And Page #30 details only the long-term debt. Page 30 excludes short-term debt because there is no debt for repayment of those. So because there are no debt, we have excluded them. And that is why there is a net INR 2,000-odd crores, which is actually short-term debt.
The next question is from the line of Ajay Sharma from Maybank.
I wanted to check on your plans of 500 million tonnes basically by FY '25. So if you could provide some granularity on that right now, you're only around 350, 340, right? So where is the additional cargo going to come from?
So we have a lot of assets which will come online by FY '25. So we have our Vizhinjam port, which is under construction, which will come online. We would have our Sri Lankan Colombo port terminal, which will come online by that time. And these are -- and an additional container terminal in Mundra. So all of these new assets will add to the volumes -- to the existing volumes. And I think we are very confident that the -- we would be able to reach 500 million metric tonne by FY '25.
Okay. And then quickly on your CapEx, right? If I see in terms of the breakup you have given earlier on the logistics CapEx and ports CapEx, I see in terms of revenue to CapEx ratio for logistics seems to be rather low. So I'm just wondering how do you kind of justify that? And is that going to pick up in the future or what?
So right now, we don't expect major CapEx on the logistics side on the container because ICD because we've done a lot of development this year. We do expect CapEx on the agri logistics and the rail to continue as per our earlier guidance. And once our utilization on container ICDs improve, we will look at expanding those capacities.
The next question is from the line of Varun from JPMorgan.
Most of them have been answered. So just couple of them, more of a housekeeping ones. One, can you just guide me the JV level debt that would be not reflected in the debt right now, but -- which is guaranteed at the JV level? That's the first question. And then second question is just principally, if you can give some guidance to better understand. If I look at your cash flow statement, which typically happened in the semi-annual in the investing cash flow is always a very large inflow/outflow that happened for the loan and intercorporate deposits, typically, it's multiples of the cash that you have on the balance sheet. I know it's a grossed out number, but whom exactly does it go through? And how does it come back? If you can give some guidance on that as well.
So we'll answer the second one, till that time we'll gather the first one. Yes. So I think this question came earlier also. And what we explained is that these are treasury operations. Given the cash with the company, treasury works to drive a return on that cash. So these are more intercorporate deposits and other investments with the treasury make, very short term, well secured, and that has been our ongoing operations, giving very good returns to us. I hope that has answered your question.
What kind of -- does that go to your customers or suppliers who require short-term financing?
So it's not only limited to anybody in the market who has sufficient -- who can give us sufficient security once a short term, and we are confident in terms of the security of the principal, plus the terms of the return or the interest remains -- is completely negotiated with the borrower.
Can I ask like what percentage of your cash portion is typically utilized at any given point in time for these corporate deposits?
Yes. Actually, if you look as of 31st December or actually going forward, we are not going to have any of these because we have used up all our cash either to pay down our debt or in our CapEx. The buildup of cash happened in anticipation and lack of clarity on some of the large acquisitions as well as the CapEx plan at that point in time. So now there is no need for us to do the cash buildup. And therefore, in fact, we are specifically guiding that next year, we'll pay down the debt with the cash.
Okay. And the JV level loan, I think it was INR 900 crores. Is that largely unchanged?
No. So JV levels, so we have 3 JVs. We have the AICTPL, which is a JV with MSC. There we have a $300 million bond, 20-year bond. We have Dhamra LNG, which is a JV with Total. There, we have a $600 million ECB. And we have Adani CMA, which is container terminal in Mundra, again a 50-50 JV with CMA. There we have INR 1,500 crores of debt.
Okay. Just want to clarify, none of these debts have been guaranteed by APSEZ.
Could they appear more as contingent? Is that right?
This on issuance of is completely 20 years nonrecourse bond, subscribed by various bond holders.
Adani CMA loan is nonrecourse loan on the books of the JV. And Dhamra $600 million ECB is co-guaranteed. So $300 million by Total and 300 by Adani.
And which when we do the takeout at some point in time in future, this guarantee will follow. Right now, it is under construction. So it is it.
The next question is from the line of Rishab Sisodia from [indiscernible] Capital.
Just on a longer-term guidance question, given logistic exposure. So where can our blended revenue mix look at, let's say, 3 years or 5 years down the line for ports and logistics per se, and even warehousing, if you could improve?
I think it would be around 30 -- 70-30, 70% ports and 30% logistics.
And do you expect the margins to sustain at these levels of both the businesses, right?
Yes, ports 70% -- and 70% and above and for logistics it would be -- It will increase from the current level, as we have seen increasing in the last 2, 3 years. So from 17%, 18%, these are currently at 29%. And based on the types of assets, which is commissioned, this will continue to increase over the coming years.
Okay. And just one slight -- last question. So given a slightly lower CapEx guidance for the coming year. So given we are hedged for the -- at least for the next 2 years of growth guidance. So post that, would that again be a scenario where, again -- the CapEx will come in only then growth will drive that? Would that something be like?
I think what we are saying is that I think for the next few years, I think the CapEx -- this would be a sort of a consistent CapEx of INR 3,500 crore to INR 3,800 for ports to sustain the growth and to reach our guidance of 500 million tonnes for FY '25.
And on the highest receivable asset terms for both the businesses on net fixed assets per se?
What I'm asking is the asset of the maximum achievable asset terms for ports and logistics individually...
See, today, we have a total capacity in the ports of 550 million, and we are adding more capacity. We are adding Vizhinjam we are adding [indiscernible]. So we have room. But actually, there will be sustenance CapEx as well as actually mechanization as well as asset-specific like container, like liquid, so product-specific CapEx would be there. We have enough room. It will depend on the sort of mix of growth in the market.
The next question is from the line of Amit Jain from Samsung Asset Management.
Just a clarification again on the debt side. On the waterfall itself, right? I'm just trying to understand. You said about INR 35 billion is short-term loan and buyers credit. So is your working capital sort of more or less doubling in the 9 months -- sort of can you sort of even sort of explain what's happening on the waterfall in the presentation that is on the revised one?
Yes. We will give you little more specifics and sharper sort of waterfall. But fundamentally, we use short-term debt for both working capital as well as for all the sort of CapEx requirement. If you see all our current debt in the balance sheet is long term, which is $4 billion of bond and INR 8,500 crores of NCDs that I spoke about. And our objective is to tenure out this debt through 2 things. Number one, as and when assets start commissioning, we will actually do the takeout. And number two, as and when there is an opportunity, we will actually do long tenure bonds. So these are 2 ways in which we will actually tenure out over a long period of time. And the current use of short term to long term, as you can see, short term is very, very small in -- I mean 5% to 7%, and the long term is still the dominant part of our total borrowings.
[indiscernible]
Audio is breaking from line. Please repeat your question.
Can you hear me?
Yes.
So yes, just a clear waterfall would be helpful because I understand the INR 35 billion of inflows that you're getting from the sources you spoke about, I'm just not clear on where the utilization has been. So that would be very helpful if you can sort of update that.
We'll do. We'll do.
The next question is from the line of Aditya Mongia from Kotak Securities.
I just had one clarification to get from you in the bridge that you talk of cash flows, there is another component that is supported to the extent of INR 1,175 crores. Could you give us a sense of what are the key components inside the line item?
Sorry, which page you're talking about, Aditya?
I think it's Slide 29, where in the cash flows.
I'll say this is multiple small, small items, which we have clubbed them as others. So no specific major item, but multiple items with the buyers credit or some other loans being added. So this is what we are added. to get one number to.
Okay. And just a clarification again. What is it happening in...
Tax, any sort of deposits, so all those things get added into this. Mobilization, advance or something of that nature.
Okay. Understood. And just a clarification at Mundra or Dhamra, are you seeing any amount of market share losses that are happening, let's say, in Dhamra, or is it just the macro that is impacting our near-term workflow?
I think it's mainly the macro. Overall, we're not seeing any major shift in the market share at both -- both of the places.
Fine. And just again, the final question from my side. Is Haldia anywhere figuring in your FY '24 estimates of CapEx? Or is it only Haifa which is the inorganic part that side?
Sure. So for Haldia, we have almost 2.5 years to commission. So we have CapEx in this -- I mean, in the coming year, but it is very minimal because we have sufficient time to commission this terminal.
Understood. And on logistics, this 2x EBITDA that has happened on a Y-o-Y basis, is this all organic or is there any consolidation happening of [indiscernible] of numbers?
So it's a mix of both. Having [indiscernible] is also being added during the year, but there is a good share of organic growth, which has been an ongoing phenomenon. You could have seen that in the past quarters and the journey continues.
Bulk of this contribution has come from organic. [indiscernible] happened only for last quarter, that is this quarter. We see the trend, the trend has been continuing Q1, Q2, Q3 with the same increase that you are seeing now.
Understood. And again, sorry, but just again kind of reconfirming, the Karaikal Port CapEx of INR 1,500 crores is part of the INR 4,000 crores to INR 4,500 crore guidance, is that correct?
That's right. It is included.
The next question is from the line of Eric Liu from Nomura.
Actually, I just have one follow-up question, it's regarding the Adani International Container Terminal, the joint venture of the MSC. So there's news talking about the mutual termination between the MSC Maersk alliance will come in January 2025. And this joint venture for, I think, 70% of the volumes coming from MSC. So do we have a breakdown let's say, this 70% of the volume of which how much coming from MSC and how much coming from the Maersk. And going forward, how do you see the volume risk after this termination of the guidance?
Yes. So in AICTPL majority of the volume comes with an MSC volume, is the Maersk volume goes to another terminal is just a spillover which comes into this volume. So we don't see any disruption in the volumes of AICTPL as well as in the disruption of Mundra Port volumes because of this alliance breaking off.
And how is the utilization rate at the moment? Is it like around 90-something compared to previous year, turn of the issuance was talking about 60% to 70%.
In AICTPL?
Yes, correct.
So utilization is roughly 70% at AICTPL.
The next question is from the line of Bharani Vijayakumar from Spark Capital.
I have one question. On the gross debt, which is at around INR 45,000 crores at present. After the Haifa acquisition by the end of FY '23, how much is this going to go up to?
The gross debt will go up in the consolidated accounts by $840 million.
$840 million?
840, that's correct. 840. But like you said, it's also cash. Yes, there is also cash in the company. So net debt will be much smaller, but gross debt will be $840 million.
Okay. So gross debt will go up by roughly about INR 6,500-odd crores?
That's right.
And so that would be about INR 52,000-odd crores by the end of the year in the consolidated books? And you're telling from that INR 52,000-odd crores, it will come down by INR 5,000 by end of FY '24.
Yes, you will also see the numbers for 31 March, what we are now doing is 31 December. So like said at the beginning, we expect net debt by 31 March of INR 43,000 crore to INR 44,000 crores.
31st March 2023, you mean?
Correct. Correct. So from there, you have to start to calculate the INR 5,000 crores that we will pay for the next year.
Okay. So that will bring down the net debt to about INR 37,000 crores by end of FY '24.
That's it. That's right.
The next question is from the line of Pallavi Deshpande from [indiscernible] Capital.
I just wanted to know on the Haifa Port again, would the margins for that be lower or higher than Haifa?
Yes, the margins are lower than APSEZ. So roughly, the margins are 25% to 30% over there.
Right. And just on the land sales out, would that be still on track? What's the guidance for 2Q...
In our guidance, we don't -- we have not -- we don't account for any land sales in our guidance. So all our guidance are without land sale.
The next question is from the line of Matthew Zeng from BIMCO.
I just wanted to clarify on the point that you just mentioned before. You said that the entire bidding it on the balance sheet up to 4,000-odd crores can be pledged for secured land if necessary. But I also noticed there's a negative touch in your US dollar bond terms. Can you perhaps explain a little bit more on how you can catch these without breaching the negative hedge?
Yes. See, our U.S. bond covenant is that if we give security to any other bonds, then we have to give a pari-passu debt -- sorry, security to the current bond holders as well. But if it is a non-bond, then we actually have the security to be offered to anybody else. And of course, we'll have to be disciplined about our total leverage.
I just answered the question on the basis of theoretically what is the room available from the security side. We also have to calculate what is the room available from the leverage side.
So you're saying, if it's not the bonds, then you can provide security. It is a bank in bank loan or private placement kind of debt you can provide securities without breaching the negatives.
That's correct.
Right. And you just mentioned there is a regulatory restriction as well. Can you give a bit more color on that as well, please?
We mentioned what -- regulatory what?
Regulatory check on the amount of assets that you can hedge. Did I hear that correctly?
No, I didn't mention any regulatory. I was only saying that the entire asset technically is available for us to offer as a security from offering security perspective on the asset side perspective, but we also have to sort of calculate from a liability perspective, how much liability can we totally borrow within our leverage.
The next question is from the line of [indiscernible] from MetLife Investment Management.
I just wanted to reclarify on the question regarding GTPL. So my line was a bit choppy, but you mentioned that there will be no volume disruption from the termination of MSC contract with you. Could you please rewind?
Yes. So AICTPL is a joint venture between APSEZ and MSC. And 70% of the volume of AICTPL is MSC volume. Maersk volume does not come in this terminal. It's predominantly the volume goes to another terminal in Mundra port. Only some of the spillover cargo of Maersk as and when there is congestion comes into this -- into this terminal. And that's why we don't expect and we don't foresee any disruption due to the -- for both AICTPL as well as for Mundra Port.
All right. So if I got that correctly, so you're saying that only the spillover will be coming into this terminal?
The only spillover is coming right now, which is less than 2%, 3% of the total volume of that terminal.
All right. So basically, once the contract is terminated, then the other volumes would be sufficient to meet volume requirements?
Yes.
The next question is from the line of Yixi Yang from Macquarie Asset Management.
So I just want to kind of go back to something we talked about a long time ago. So last year, I think the guidance for CapEx overall was about INR 90 billion, right, much higher. And I understand that there's enough projects to drive growth for the next 2 years. But -- so I guess is it purely that -- so these projects are not as expensive as we saw, that's why we are able to cut CapEx? Or there are some things that are being pushed back.
No. So these are all the -- I mean next year, all the CapEx that we have -- all the projects that we have started this year would be coming to a closure in next year. That's where we are at the tail end of the cash flows for -- from a CapEx point of view. And then the capacities that we are adding, which will get added next year with those CapEx will be sufficient to take not just next year's growth but the following year growth as well.
So can I assume basically that you're completing the project faster or cheaper, and that's why you are able to reduce CapEx?
Yes, that's it.
The next question is from the line of Douglas from JPMorgan Asset Management.
I just want to circle back to the previous question.
Sorry, can you speak up. We can't hear you.
Is it better now?
Yes, it is much better.
What is the maximum amount of cash on balance sheet used for ICD in any different point of time?
Did I hear you correct? What's the maximum cash that we have carried in this year?
No. What is -- so I guess this question was previously asked, but I don't catch the answer quite clearly. What is the maximum amount of cash on balance sheet that is used for ICD in any different point of time.
See, as Muthu explained it earlier, there is no specific number here. It is dependent upon in the last 2 years, we have been building the cash reserve for certain acquisitions, which enabled us to -- for the treasury team to do those deposits -- or corporate deposits. This is not an ongoing phenomenon given the CapEx, what we have taken in this year and the acquisitions, we don't have any cash or we don't have that much of a cash to do this ICD. So this is not an ongoing phenomenon. This was more of what a short period of time given the cash buildup, which is -- and there is no specific RPT in that, just to be very clear on that. And this -- Mr. Adani also mentioned it that, that sort of intercorporate deposits, which we are talking of, these are not to the related parties by any nature.
Right. Yes. It's quite clear that it's not a related party. I just wanted to understand what is the maximum amount of cash that is used for ICD in any given point of time in the past 3 years?
So I think trying will -- on the risk of repeating what I said a few minutes back, we don't -- there is no specific number. It is primarily was the treasury operations looking forward and in the current situation, whatever the cash what we were having, we have put into the business in terms of the CapEx and the acquisitions that we have carried out. So you will not see that level of transactions or ICDs going forward.
Does that answers you? And whatever the cash which we have in the books, you can see the value and where it is currently deployed in the balance sheet, which was issued as of 30th September and earlier one as of 31st March also.
The next question is from the line of Justin from [indiscernible] AMC.
Management, I just had a follow-up again about Myanmar. I know that you mentioned that there's an additional approval for coming from [indiscernible] on Myanmar. So my concern is that last week, the U.S., U.K., Australia, I think previously, they held out on sanction. They have actually announced a new restriction targeting some of the SOEs in Myanmar. And also as I understand there's also expansion of the state of emergency. So in this context, is there any scope for much longer delay in approval than expected? I know you're mentioning potentially next quarter to get approval. But the problem is this is actually a real sticking point in MSC's assessment of your ESG profile.
No, 100% agree with you, and we are cognizant of the fact that it is a sticky point in our ratings, ESG ratings. I think we took a call, looking at the overall situation, we had taken a call one year back that we have to exit, and we've been working aggressively in terms of to find a buyer and to get all the approval so that whenever we do an exit, we do an exit properly as well. Because the worst thing we can do is we leave an asset behind which is, again, used for some other -- which could be used for human right violation purpose. So that's why we just -- we are cognizant of the fact that it is taking a little time than expected. But we just want to do it in a correct way so that it goes to the right buyer, and it is not used for any other purpose.
The next question is from the line of Matthew Zeng from BIMCO.
Just wanted to follow-up on the previous question from the ask. So regarding ICDs that you have ramped over the past few years, have they ever experienced any stress or difficulties in terms of getting money back?
We got the question, Matthew. Let me answer and if it isn't complete, please do follow it up with the question not completed. There is no write-off. The entire money has come back along with the full interest and treasury money is completely intact, and it did come back in full, number one.
And number two, because there are repeated sort of questions on this, I do want to actually go back to the principles of why it was there in the first place. There was a cash buildup in the company. Our operations threw up a lot of cash and it was built for both acquisition as well as the CapEx. You saw last year, CapEx panning out. It was just uncertain at that point in time, but it has now been used up for CapEx. In addition, at this point in time, there is no clear visibility on the CONCOR, which was also actually a point of sort of potential use at that point in time. So there was a cash buildup.
Today, there is no cash buildup. And actually, to demonstrate that point, we are now talking about paying down debt, the cash that is generated. So you won't see the ICD going forward.
Got it. Got it. And just a follow-up on this. So what will be a minimum amount of cash that you would be comfortable with on the balance sheet?
For the size of our operation, in addition to loan cash that is required, we normally carry sufficient cash for next -- I mean this is the group's policy, we tried to carry cash that is required for 1 year's upcoming maturity, plus all known CapEx that we want to use for the next 6 months. And lastly, for a kind of operation that we have, we will have $100 million to $200 million of cash that we want to carry in the balance sheet to meet the operating requirements of the company because it's a pretty large balance sheet. As you can see, it is close to INR 80,000 crore balance sheet. So we will carry some cash to meet the operating requirements.
Ladies and gentlemen, we'll take that as a last question. I now hand the conference over to the management for closing comments.
So thank you very much for taking out the time to attend this call. We will come and join back with you after the Q4 results. I hope most of your questions or all your questions have been answered for now.
Thank you. Ladies and gentlemen, on behalf of DAM Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.