Coal India Ltd
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Earnings Call Transcript

Earnings Call Transcript
2022-Q3

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Operator

Ladies and gentlemen, good day, and welcome to the 3Q FY '22 Earnings Conference Call of Coal India hosted by Motilal Oswal Financial Services Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Vishal Chandak from Motilal Oswal Financial Services. Thank you, and over to you, sir.

V
Vishal Chandak
Analyst

Thank you, Vibisha. Good evening, everyone, and welcome to the third quarter FY '22 earnings call of Coal India Limited. This is Vishal here from Motilal. I would like to thank Shri Pramod Agrawal, Chairman and the Managing Director of Coal India for giving us this opportunity to host him for the call.So without much ado, I would like to hand over the floor to Mr. Agrawal for his opening remarks, followed by which he would open the floor for Q&A. Over to you, sir.

P
Pramod Agrawal

Good evening, everyone. We have completed third quarter and we have announced our results. To my understanding, despite the difficult circumstances in which we were working, our performance in last 9 months have been significantly better than last year. We must keep in mind that -- while evaluating this performance, we must keep in the mind that the first 3 months were very difficult for Coal India because there was very difficult -- means the time was very difficult because of COVID situation and we lost many of our miners, many of our officers in that time period.Then secondly, the rainfall in our area was especially very high this year. On one day in ECL, there was a rainfall of about 400 mm, and this resulted in submergence of almost all the mines of ECL. And in ECL area for a couple of days or maybe a week, there was almost 0 production because none of the mines were in the condition where we could have operated.In other areas also, the rainfall was very heavy. Despite that, our results are quite satisfactory. And today is a great day for us because today we have surpassed the dispatch that we did last year on 31st March. And we are looking forward that this year the dispatch will be ever highest, much higher than anything that we have achieved till now. And I am targeting that the dispatch will be in the range of 660 to 670 million tonne.Secondly, our production this year also is likely to be very high. We are already about 25 million tonnes ahead of what we did last year, in the corresponding -- till today. So I'm looking forward that maybe we will end up this year with a production of more than 630 million tonne. We are targeting that we should try to achieve 640 million tonne, but that is a slightly difficult target, but we will put everything to achieve this.We have supplied huge quantity of coal to power sector. And I think that dispatch this year compared to last year is 17% to 18% higher than what we did last year or any other year which was a normal year.If we compare the dispatches to nonregulated sector also, we are maintaining a dispatch of about 3.2, 3.25 lakh tonnes per day and which is more than what we did in FY '20 or FY '19 In FY '21, definitely we had given slightly more coal to nonregulated sector because the demand in power sector was less. However, today everybody wants that coal should be supplied by Coal India because our prices are very low compared to international market.Replacing the whole thing in a year is slightly difficult, but in the coming years we will definitely increase our production. And if our performance remains good in first quarter of next year, which I expect that it will be, then perhaps in next year a lot of demand -- or a lot of import that is taking place can be replaced by Coal India.With this opening remark, I would like you to ask questions so that we can explain, if any doubt is there.

Operator

The first question is from the line of Prashanth Kumar Kota from Dolat capital.

P
Prashanth Kumar P. Kota
Vice President of Research

Congrats for a good set of results. Sir, my question is regarding the pricing of G1 to G5 grades, wherein earlier we had some flexibility to keep the prices of these grades on some discount import parity basis, et cetera. Where are these prices now and what is the thought process in thinking around these prices because international prices are quite high? So just wanted to know your thoughts and latest situation on this, sir.

P
Pramod Agrawal

See, from G1 to G5, the availability of coal in Coal India is very less. Most of this coal is given to NRS sector and which is linked to their end use. And then secondly, it is based on linkage auction. Just because the international price has increased, we cannot increase that price suddenly breaking the contract. But small portion of which it is auctioned, there we are getting very good premium, and there price will be also considered whenever this price -- overall price increase takes place.

Operator

The next question is from the line of Amit Dixit from Edelweiss.

A
Amit A. Dixit
Financial Analyst

Congratulations for a good set of numbers. I have 2 questions. The first one is on the status of wage negotiation. Where we are now? When we expect this to be completed? And also, if there is a possibility of price hike in next 2, 3 months? That is the first question. The second one is a more bookkeeping question essentially on receivables that you have on books as on January end, or if you can mention for February 15. That would be great.

P
Pramod Agrawal

Coming to your first question on wage negotiation. Wage negotiation, yesterday we had the third round of negotiation, third round of meeting. I don't foresee wage negotiation getting concluded in next 3, 4 months. But definitely, we'll try to conclude it by end of FY '23. It depends how it goes and where -- what are the stand that both of us take.So it will be very difficult for me to tell you the timeline for it, because never before wage negotiation has been completed in 1 year time. Only once it got completed in 10 months. It generally takes slightly longer time. But we are very keen that it should be concluded well in time, and maybe by end of FY '23 it will be concluded.The second thing is price hike. I'm trying and trying to bring everybody on board. And for me, every day is critical. I hope price hikes should take place immediately. It has become very urgent for Coal India. And for certain subsidiaries, it has become so important that without that, it will be difficult for them to survive.And on the -- I can't tell you what is the receivables on 15th of February as such, but it is constantly going down. And at -- somewhere -- and it was trailing -- that was 13,000.

U
Unknown Executive

31st December it is 15,000.

P
Pramod Agrawal

And it is now 13,000. And on 31st of January, it was 13,000 and on 31st of December it was 15,000. And I think we should get back to that stage which was earlier by the end of March, because some of the state governments have requested us to bear with them till March end and they have agreed that by March end they will clear most of their dues. So I'm quite hopeful that we should come in the range of minus 10,000 by the end of March.

Operator

The next question is from the line of Rahul Jain from Systematix.

R
Rahul Jain
Vice President of Metals & Mining

I have a couple of questions. Firstly, on your volumes. How do we look at volumes for next year? Because this year we have reportedly sold from our opening stocks of about 16 million tonnes. So next year, although -- say, probably, we may see a 4%, 5% volume growth. But on dispatch tonne, we may just see 1%, 2% growth. Is that assessment right?

P
Pramod Agrawal

I couldn't get your question. Please repeat.

R
Rahul Jain
Vice President of Metals & Mining

Yes. Sir, this year, so far we have sold about 16 million tonnes from opening stocks and that's why we're seeing this good offtake growth of about 12%. So for next year, how do you see the situation? Because our typical volume growth has been around 4%, 5% and like you may have to like finish your stocks and things like that. So are we looking at a flat year in volume for next year?

P
Pramod Agrawal

See, next year, our production should grow. This year, we'll be ranging at 630. I'm looking for a growth of about at least 10% or something in that range. Because last year, our performance was -- in production was very bad up till May, June because of COVID situation. We were producing something like 14 lakh tonnes per day, whereas our capacity to produce in any quarter is about 18 to 19 to 20 lakhs per tonne.We will try to maximize this. If we are able to perform well in the first quarter, that will give us about 40 million tonnes extra coal, and that itself will be adequate to propel our growth. So I am looking forward that next year the dispatches will be in the range of 700 and the production should also be in that range.Yes, you are right to one extent that this year we got a support of whatever stocks we had last year. But then there were constraints also in this year in production front because of COVID and the heavy rainfall. I don't think this will get repeated this year. If there is a COVID situation, if there is a very heavy rainfall like last year, perhaps then at that point we will make the correction. But today, I'm quite hopeful that we will be able to give a substantial growth next year.

R
Rahul Jain
Vice President of Metals & Mining

Right, right. Okay. And sir, my second question is on your wage provisioning. So 6 months have already passed. And have we done any provision so far? And what kind of quantum -- suppose if the -- the last hike what we had, if similar kind of a hike happens this time, so what is the provision which has not been done so far?

P
Pramod Agrawal

We are providing about INR 100 crores per month. It will be difficult for me [Foreign Language] what will be the wage negotiation. But if you see all the factors which are prevailing in the economy -- wage increase also depend on the growth that takes place in the economy because the growth gets compensated. The dearness -- or the inflation gets compensated in dearness. But the growth plus some thing gets reflected in this thing. So to my understanding, this should be in the same range. But it will be difficult for me -- maybe slightly more posing...

R
Rahul Jain
Vice President of Metals & Mining

Why I'm coming to this is because last time when we had the wage increase, I think the total cost went up by almost like INR 15,000 crores. So INR 100 crores is really a very miniscule number and...

P
Pramod Agrawal

And I think it went up by about INR 4,000 to something crores, not INR 15,000. It was not INR 15,000 crores.

U
Unknown Executive

INR 4,500 crores.

P
Pramod Agrawal

INR 4,500 crores or so. So I concede that INR 1,200 crores or INR 1,300 crores may not be adequate. But we'll provide something more in coming months.

Operator

The next question is from the line of Rahul Modi from ICICI Securities.

R
Rahul Modi
Analyst

Congrats. Great set of numbers. And thanks for a very liberal dividend. Really appreciative of that. Sir, a couple of questions. Sir, how has the e-auction volumes and pricing been post December? And how is the demand itself from the NRS sector and our supplies to that sector been?

P
Pramod Agrawal

The e-auction thing. In January, our premium was about 100%. We got about 100% premium on that. And this e-auction total was -- can you tell?

U
Unknown Executive

Total quantity is 873...

P
Pramod Agrawal

In January?

U
Unknown Executive

Total...

P
Pramod Agrawal

Till January, and it is 86 million tonnes.

U
Unknown Executive

It is 3% higher than the same period last year.

P
Pramod Agrawal

And 3% higher than the last year. And...

U
Unknown Executive

Up to December.

P
Pramod Agrawal

Up to December. And January, what is the...

U
Unknown Executive

January, we are slightly less. But then, up to December, it is 3% higher than the last year.

P
Pramod Agrawal

We are doing slightly better than the last year, but the quantum has increased slightly 3% or 4%. But the premium in January was in the range of 100%. And if we offer in spot more, perhaps the premium will be higher because in spot we get much higher this. And the lifting too also has been good. It is more than what it has happened last year. I don't have figures right now, but I will tell you in a while.

R
Rahul Modi
Analyst

Sure. So sir, we did close to around -- in the first 9 months, we've done around 83 million tonnes. So are you comfortable touching, obviously, more than 100 for the full year?

P
Pramod Agrawal

I am quite hopeful that we'll do more than 110 million tonnes, which we -- we did last year 120 million tonnes -- 124 million tonnes. I think our production is increasing. Now -- today, we have reached 23.5. Once we cross this 24, we will offer much more quantity for e-auction also. So maybe not 124, but 110 or 115 type we will definitely achieve.

R
Rahul Modi
Analyst

Perfect, sir. On the employee cost and the contractual expenses, how do you -- now employee cost is 50 -- we've done around -- close to around INR 30,000 crores for the first 9 months. This is -- so any actuarial or something booked on a Y-o-Y basis? Anything...

P
Pramod Agrawal

Yes, there was a provision of about INR 800 crores for CPRSME and for medical after retirement.

R
Rahul Modi
Analyst

INR 800 crores. So this is a provision? This is noncash, is it?

P
Pramod Agrawal

Yes, this is noncash.

R
Rahul Modi
Analyst

And this -- sir, over and above the INR 800 crore, we've done INR 600 crores of wage provision?

P
Pramod Agrawal

Yes, that's right.

R
Rahul Modi
Analyst

So wage provision, we've only done for 2 quarters...

U
Unknown Executive

[indiscernible].

R
Rahul Modi
Analyst

Pardon? Please repeat, sir?

P
Pramod Agrawal

Yes, Rahul?

R
Rahul Modi
Analyst

Wage revision, we've done only for 6 months -- we done INR 600 crores so far, is it? Or we've done...

P
Pramod Agrawal

We started from July, since -- from 1st of July, the wage revision is applicable. So we have started from 1st of July only.

R
Rahul Modi
Analyst

Okay. Okay. Perfect. And sir, how do you see the contractual expenses, because, obviously, due to fuel price hike there has been a constant increase. So how -- you see this normalizing at what level? Obviously, subject to the input cost, how do you see this moving?

P
Pramod Agrawal

I think per tonne basis, this will normalize at this level. There is -- but one doesn't know where the -- nobody expected that the petroleum prices will breach the $100 mark. It has not breached there yet, but it reached to $96, $97 per barrel. Nobody expected that. There has been a significant impact on our expenditure because of diesel. I think in the 9 months, it has been contractual plus our own diesel consumption. The extra expenditure will be more than INR 2,000 crores. But it should not...INR 700 crores is for our consumption, plus contractual about INR 2,000 crores has taken place. And in coming months, I don't see that it will -- likely to go up. But I can't make any comment on that. If our production increases, that is something different. But if diesel prices will increase, it may take that further. So it will impact.

R
Rahul Modi
Analyst

So sir, you -- so now this is -- this would be a good enough reason for the long awaited price hike. What's your view? We've been constantly asking you the same question again and again.

P
Pramod Agrawal

I think I should do it tomorrow, Rahul. If I -- but then the crisis that is going on in the country because of this -- all the stakeholders are not on board and unilateral decisions are not possible in this sector.

R
Rahul Modi
Analyst

Right. Sir, last question from my side before I get into the queue. Sir, in terms of restocking at power plants, obviously, the demand from the power sector is high and it's continuing to be high. So when do you see this restocking happening? And we read a lot in the papers that the NRS sector constantly complains. And we, as Coal India, get higher realization selling there. So where do you see on a sustained basis beating the power demand and moving towards NRS also? How do you see the situation qualitatively?

P
Pramod Agrawal

Rahul, first thing is we have not reduced the supply to NRS. That's a wrong perception being created in the market. Normal year, FY '20 you take, we have given more than that, 10% more than last -- FY '20 to NRS sector. One must understand that the price of Coal India's coal is much below the market price or the imported coal price. So everybody wants that they should get this coal at -- means -- by pressurizing us. But it is not correct that we have reduced the supplies to NRS.The second thing is the power plant stocking. The power plant -- stocks at the power plant has reached 23 million tonnes. Besides that, about 8 million tonnes is there in pipeline, which is lying in the stockyards or the goods shed, et cetera -- washeries and sidings, et cetera. So this coal has already been sold to the power plants. It is just because the railways, because of excessive demand, is unable to transport them to power plant point. But that is easily available. And at -- this 8 million and 9 million tonnes, if it reaches to the power plant, then their stock will reach to more than 30 million tonnes, which will be higher than the last year.But last year, we faced the crisis. So I think that in March, again, we will have to give them extra coal. From April onwards, if we are able to maintain the production level at a reduced level but at the level of January or December also, then also there will not be any shortage of the coal. And I think the requirement of NRS -- even the increased requirement of NRS, we will be able to meet.

Operator

The next question is from the line of Murtuza Arsiwalla from Kotak Securities.

M
Murtuza Turab Arsiwalla
Director of Research & Senior Analyst

So I just have one question. A lot of my questions...

Operator

I'm sorry interrupt you, Mr. Murtuza. Can you speak a bit louder? We cannot hear you.

M
Murtuza Turab Arsiwalla
Director of Research & Senior Analyst

Am I more audible now?

Operator

Yes.

M
Murtuza Turab Arsiwalla
Director of Research & Senior Analyst

Yes. A lot of my questions have been sort of asked. There's only one more left, sir. What is the CapEx that you've been able to do against the additional guidance for -- up to YTD? And where you think you'll end up for the full year? And any guidance on CapEx for FY '23?

P
Pramod Agrawal

For this year, we will be doing about INR 15,500 crores to INR 16,000 crores. And in next year also, I think we should try to complete INR 17,000 crores or go beyond that. A lot of our projects for evacuation and road construction, et cetera, and rail-line construction are in progress. Once they're constructed, we will be able to evacuate more coal. Today, the problem is not coal, but evacuation. So we have to streamline for that. And once this is done in next 2, 3 years, thereafter perhaps the CapEx will get stabilized.

M
Murtuza Turab Arsiwalla
Director of Research & Senior Analyst

Sure. And just -- sir, for 9 months up to December, how much of this INR 15,500 crores have been spent?

P
Pramod Agrawal

We have spent about INR 10,500 crores.

Operator

[Operator Instructions] The next question is from the line of Saket Kapoor from Kapoor & Company.

S
Saket Kapoor

So I take this opportunity to thank the investor presentation team for such an elaborate and exhaustive presentation, and we hope for the continuity of that same, sir. Sir, firstly, coming to the point that -- as discussed earlier, regarding the buyback clarification, which we were awaiting from post the budget. So any update on the tax part?And sir, secondly, as we have seen in other -- one private corporate, where they were looking for restructuring the company because of the holding company scenario of dividend leakage and also buyback proposals getting -- not being -- having the efficiency in tactician. So can -- Coal India could also be looked in that angle in restructuring the same so that this holding company discounts that -- generally, the company getting on the bourses will get eliminated.

P
Pramod Agrawal

2 questions. First is about buyback. We did try a lot for this budget to be incorporated. But maybe the department decided that it should not be done. We are taking up this matter constantly with DIPAM. But till the time that buyback structure is not -- the tax structure on the buyback is not changed, it will be difficult for us to go for buyback because there is a huge leakage in that, since about 50% will go as a tax. So I think that will not be considered prudent by the investors as well.I don't think there is any leakage in dividend payment because of the holding structure because -- now that tax is completely pass-through. Whatever dividend I get and I pass it to the shareholders, then we are not required to pay any tax.The third thing about restructuring. In a major way, we are not thinking of any restructuring, but we may think of listing 1 or 2 small companies like CMPDI or BCCL in coming days. But it depends on what type of financial strength they develop.

S
Saket Kapoor

Right, sir. Actually, I was asking for the holding company discount that we are getting currently, since all the subsidiaries -- we are -- Coal India is the holding company. It is not an entity holding the asset. These are the subsidiaries that are holding the coal mines. So as we have seen in case of Vedanta, wherein they were looking to delist the company first, get it restructured, and then relist again. So can -- for the value creation for investors since it is -- our company is trading at a huge discount. That was the thought process.So second point was on the diversification part, sir. Are we looking for -- into ethanol project and flue gas as an opportunity going forward? And also, sir, on the cost reduction exercise post the implementation of FMC, what kind of cost reductions and increasing efficiency, if you could quantify per tonne on a basis that will go to the P&L going forward? That would suffice. And then I'll come in the queue.

P
Pramod Agrawal

Okay. Coming to this methanol thing...

S
Saket Kapoor

Ethanol.

P
Pramod Agrawal

Pardon?

S
Saket Kapoor

Ethanol, sir. Ethanol, ethanol. Ethanol blending program, sir.

P
Pramod Agrawal

Ethanol blending, we are not getting into because there is -- I have been told that there is no very established technology to convert coal -- ethanol from coal. And that is a very -- means there's -- nowhere in the world, I have been told, that there is any big plant existing. So I don't think we can go into ethanol blending or using coal for ethanol blending. But at today's rate, everything looks viable. We are thinking and we are exploring the possibility of converting coal to ammonium nitrate. And this ammonium nitrate will ensure a steady supply of explosives to our company. We are looking at it, and we will be putting it to tender if found attractive and viable.Actually, the finance -- honorable finance minister has declared her budget speech also that there will be granting certain concessions for it. And with that, if it becomes viable, definitely Coal India will look into it. But that will depend on its viability and rate of return, et cetera.And second question that you asked about, what was the...

S
Saket Kapoor

The flue gas opportunity for carbon capture program. And sir, I was seeking the ethanol projects from the grain-based distillery part. I think GAIL and other PSUs are participating. So with the cash accruals and with the kind of returns that these ethanol plants are generating from grain-based distilleries. In terms of diversification, that was my question, not from -- not looking for ethanol from coal. It was totally going through -- setting up ethanol plants and helping the government in achieving this blending program.

P
Pramod Agrawal

I've not -- frankly speaking, I've not looked into that aspect. In the last 6 months that I was -- I just got some information a few days back that it is a very viable project and it doesn't require much of capital. But if the capital required and the returns are high, it is better for the Coal India. But frankly speaking, I've not looked into it. Let me look into it. Then perhaps we can take a call on that.And second thing -- what was your another question, means not the gas flue?

S
Saket Kapoor

Flue gas, sir. I was looking into the flue gas opportunity for power plants, carbon dioxide capturing program, sir.

P
Pramod Agrawal

Flue gas, again, I have not looked into that. Nor is a carbon capture, to my understanding, is a very viable option for Coal India. This is for the thermal power stations, are the persons who are using the coal to look into. If suppose we get some opportunity that it becomes very viable for us, then I will think. But then as of now, no.

Operator

Next question is from the line of Pinakin from JPMorgan.

P
Pinakin M. Parekh
Associate

Sir, just going back to your comment on e-auction prices, 100% premium to FSA coal prices. So just to be clear, sir, the third quarter implied FSA -- e-auction price was INR 1,947, which on FSA was roughly 42%. So has this INR 1,947 moved to around INR 2,500, sir, because that is what 100% premium would imply?

P
Pramod Agrawal

In January, it has.

P
Pinakin M. Parekh
Associate

In Jan. So the blended portfolio has moved to those kind of realizations in e-auction?

P
Pramod Agrawal

[Foreign Language].

P
Pinakin M. Parekh
Associate

Yes, sir. Sir, second point is that there is e-auction sales and then there is linkage auctions. So if you were to roughly -- the FSA coal bucket was 145 million tonnes. Is that entire bucket of coal sales on fixed prices? Or does it also include some kind of linkage auctions? So basically, we're trying to understand, is there scope for more coal to get transferred from the FSA coal bucket to the linkage coal bucket?

P
Pramod Agrawal

Can you repeat your question? I just missed it.

P
Pinakin M. Parekh
Associate

So basically, sir, other than e-auction coal sales to the non-power sector, Coal India has been auctioning coal linkages and supplying that. So sir, what is the update over there in terms of have all the non-power coal sales on contract shifted to linkage auctions? Or are there more to be shifted over the coming period?

P
Pramod Agrawal

See, we all are based on linkage auction. This non-power thing I'm talking about, all are on linkage basis. Some linkages were done in Phase 1, Phase 2. Today, what is going is the Tranche 5. In Tranche 5, there are certain things which have expired and we have not been able to do the auction for them. But all those are not getting coal on linkage price. They have to take from e-auction.

P
Pinakin M. Parekh
Associate

So sir, in third quarter, what would have been the volume which got sold under linkage auction as part of that linkage auction?

P
Pramod Agrawal

I won't be able to give you right now...

P
Pinakin M. Parekh
Associate

And sir, that, you will be classifying it under FSA call or e-auction volume when you report the sale?

P
Pramod Agrawal

See, if we sell coal through e-auction, it will be classified in [indiscernible]. If it is through linkage auction, [indiscernible] linkage auction. If the linkage auction has last and they're taking coal [indiscernible], it will be classified in e-auction only.

U
Unknown Executive

Volumes are around 100 million tonnes.

P
Pramod Agrawal

Linkage auction volume in the whole year is about 100 million tonnes.

Operator

The next question is from the line of [ Vipul Shah from Sumangal Investment ].

U
Unknown Analyst

Congrats for a good set of numbers. So sir, my question is -- in your Slide 11, you have mentioned that 700 million tonnes of coal projects are progressing. So over what time frame these are going to be implemented? So our capacity will be 1,600 million tonnes after all the projects are implemented?

P
Pramod Agrawal

See, the thing is 700 million tonnes, but some of the projects will outlive their life also. So this 700 million tonnes, what we are saying the extra coal that projects will generate, it will take another 4, 5 years to come in place, not less than 5 years. So it will not go up to 1,500. But if all this coal is produced by 2030, about 1,200 tonnes or 1,300 tonnes type of coal can be produced.

U
Unknown Analyst

And sir, you are estimating -- so you are executing coal evacuation infra projects worth INR 20,000 crores. I suppose these are JVs. So all this CapEx will not be done by Coal India. Some of the CapEx will be done by your JV partners. So can you quantify how much will be Coal India's contribution in the coal evacuation infra projects?

P
Pramod Agrawal

See, when we are saying INR 20,000 crores, it includes about INR 8,000 crores -- remaining about INR 7,000 crores of FMC projects. Then some of the railway lines, which are to be laid in next 2, 3 years, which will -- and which are financed completely by Coal India, that will be another INR 6,000 crores, INR 7,000 crores. And the sidings, et cetera, which will constitute about INR 4,000 crores, INR 5,000 crores.So about INR 18,000 crores, INR 19,000 crores are required to be spent from the Coal India only. This is the type of money we will be investing as our own -- means as equity in certain projects like FMC, WRL and CRL, et cetera. It will be part of the equity. And plus what -- which is fully funded by us. So it will not be equity thing -- not be debt or partners' money, which we are talking about.

U
Unknown Analyst

So you will be compensated later?

P
Pramod Agrawal

If we move -- suppose we construct the line fully like we have constructed this line Shivpur-Tori, we get extra mileage on that, about 60% extra mile we get. And that money should come and that is process in coming. So in that project alone, we are likely to get INR 200 crores per year.

U
Unknown Analyst

Only a follow-up question, sir.

Operator

[Operator Instructions]

U
Unknown Analyst

Ma'am only -- this is follow-up. So what will be the return on this INR 20,000 crores worth of investment? I'm still failing to understand that.

P
Pramod Agrawal

Okay. For sidings and these FMC projects, which constitute the major part of it, we have calculated that the money gets returned in next 3, 4, 5 years. Because a part of -- means the transportation cost from mining to the point of loading, that's reduced substantially. So within 4, 5 years, we get the return. So that type of return we are getting. For the railway projects, which are essential, we don't get much of return on that. But most of those projects are being constructed through PPP route. In that, the PPP company gets a return, about -- [Foreign Language]. I don't -- 12% return we keep in that. And -- but that -- those projects are essential for our whole evacuation. So if we don't do that, our coal evacuation will come to a standstill.

Operator

The next question is from the line of [ Satyan Wadhwa from Profusion Capital ].

U
Unknown Analyst

My question is regarding washed coking coal. For many years since the IPO, Coal India has been talking of setting washeries and increasing the output of washed coal. We are still only at about 2 million tonnes as of last quarter. And coking coal is highly profitable no matter what the economic scenario is. So can you shed some light on what the company is doing regarding this? And demand is only going up. So India imports almost all its coking coal. Why can't Coal India not get to like 30 million, 40 million tonnes of washed coking coal a year in the next few years?

P
Pramod Agrawal

See, there are 2 types of washed coal, one is coking and non-coking. From your question, I understand that you are talking about coking coal only. Washing the coal reduces the ash percentage, but it does not improve the other properties. Indian coke or Indian coking coal is not of very good quality and it cannot be used as such. It has to be blended. It can be used only for blending.And what the people say and what the metallurgist say that at the best, 20% or 25% of Indian coal can be blended with the imported coal to be fed in blast furnace. So whatever the demand is -- a few days back, there was a meeting with steel ministry also and they have indicated that not more than 17 million to 18 million tonnes of Indian coking coal can be absorbed by the -- and that too by 2030 -- by the steel industries of the India. So if we think that we can replace the coking coal -- imported coking coal completely by Indian coking coal, that is not a possibility.

U
Unknown Analyst

Right. But even to get to 15 million tonnes, by when -- if Coal India has a plan, by when do you think we'll get to 15 million tonnes of washed coking coal?

P
Pramod Agrawal

If all our washeries get constructed in time with the extended time line also, I think by 2030 we will be able to produce that much type of washed coal.

U
Unknown Analyst

Right. Okay. And non-washed coal will go up in the same proportion, 3x non-washed versus 1x washed coal?

P
Pramod Agrawal

I couldn't get your point. 3x, 1x means -- what do you mean...

U
Unknown Analyst

So currently, your total washed coal is 2 million tonnes as of last quarter, of which 75% is non-coking. So will that percentage remain the same with the washeries?

P
Pramod Agrawal

Most of the coking coal -- most of the capacity of washing coal is coming up within the coking coal, not the non-coking. Non-coking, there are 2 washeries existing and 1 more is going to come, which may come next year. And rest of the -- we are not constructing any more washeries.

Operator

The next question is from the line of Kamlesh Bagmar from Prabhudas Lilladher.

K
Kamlesh Bagmar
Research Analyst

Sir, my basic question was on the FSA realizations. So if I see the FSA realizations, they are at the -- like say, in 9 years, they have increased in total absolute terms by 6-odd percent, if I take the, like, say, 9-month average. And on top of that, we are seeing significant cost increases and we are having such a high CapEx, like, say -- I do appreciate that in your regime the way the aggression on the CapEx have increased. It's beyond imagination. So in that perspective, sir, we are not able to take a price hike. And that is also, like, say, in last 4 years we have not took the price hike. So on the working side, like, say, what price increase we are factoring in or we are asking to the ministry, because that is the only authority which is going to allow you to increase prices?

P
Pramod Agrawal

First thing, FSA price has not gone down in this quarter. I think it increased by INR 7.

K
Kamlesh Bagmar
Research Analyst

No, no, sir. I am saying that over 9 years -- like, say, if I see the realizations in FY '13, it was INR 1,300, and we have in 9 months at roughly around INR 1,380. So it's a total increase of 6%.

P
Pramod Agrawal

Yes, that's right. In last 4 years, we have not increased the price. That is a known fact. We are trying our best to bring all the stakeholders onboard. And the price rise has become imminent. There is no question about it. So we are working on that, and I've been working very hard for last 1 year or so. But I think now it should happen. When will it happen? It is difficult for me to comment.CapEx is required. Without which, we cannot increase our production and dispatch. See, second thing you must understand, that in Coal India most of the expenditure is committed expenditure. Whatever extra we do, gives us a lot of returns. Like this quarter, we did slightly extra production and extra dispatch, and the returns have been very phenomenal.Second thing, in other areas, in this non-FSA area and in this -- we get auction price. We are trying to increase those volumes. Unfortunately, this year because of the price of imported coal being very high, the imported coal-based power plants have shut down and we had to cover that up. And we...

U
Unknown Executive

22 million tonnes we had covered.

P
Pramod Agrawal

We have to supply something like 20 million, 25 million tonnes for that. So in that situation, increasing the volume became difficult. But in the coming months, with our increasing production, I think we will be able to increase our volumes in e-auction, and that itself can give lot of return to us. So I'm not worried about return per se, but I'm really worried about price increase, and we must do that. That I understand.

K
Kamlesh Bagmar
Research Analyst

And sir, lastly, on the -- like going back to the beneficiated coal. Like in FY '07, we were doing 14 million tonnes and now we are doing 10 million tonnes. So the whole theme that we are going to put up 20-odd new washeries -- so even over like -- around like, as I said, almost like 13 years, our volumes have gone down from 14 million to 10 million tonnes. So what's the view on that part? Are they on a no-go mode or they have been stopped? Or what is happening on that part, sir?

P
Pramod Agrawal

See, there are certain issues, regulatory -- some legal issues, et cetera, in constructing the washeries because of which -- 3 washeries which we had -- we have stood LOA, we could not start. There are -- one washery we have started last year, Pathardih -- Madhuban -- Pathardih. And the second washery, Madhuban, we will start maybe in next 15 to 20 days. If that is started -- and Dohlabari [Foreign Language].

U
Unknown Executive

Dahibari.

P
Pramod Agrawal

Dahibari. Dahibari has been started. We are trying to complete this. But there is some issue of using TB land for non-coal purpose. And for that -- almost the decision now government has taken and I think it should be taken very soon. And once that is done, these washeries can be constructed. But this is one aspect in which definitely CIL has failed to deliver on what they had promised.

Operator

The next question is from the line of [ Mohit ] from DAM Capital.

U
Unknown Analyst

Congratulations on a good set of numbers. Sir, what is the status of our solar PLI bids? Is there any update which you can share?

P
Pramod Agrawal

See, we had -- we were out of list when it was only -- whatever they had declared, INR 4,500 crores, et cetera. But now we are in the list. And once it is clarified -- and whatever they have declared in the budget, we should get that thing. And we are looking for a partner. As I had told earlier that Coal India will not establish at its own. It will look for some partner and construct a joint venture. If we get that, then only we'll go ahead with that.

U
Unknown Analyst

Secondly, the MDO tenders, how has been your experience with the MDO tenders? And how many blocks do you expect to bid out in FY '23?

P
Pramod Agrawal

We have already done 2. The third, Chandragupt, again, has been bidded out and LOA has been issued. For that, the -- maybe the agreement or work order will be issued very soon. Subhadra and Gare Palma and another other one, Madan Nagar, these 3, the financial offers have been opened and they are being evaluated. So I hope out of these 3, at least 1 or 2 will be awarded. We are working. But this -- all these are very huge mines. They may look 4, 5 mines, but then [ CRML ] itself is 50 million tonnes. [indiscernible] is about 5 million tonnes. And Chandragupt is about 20 million tonnes. So volume-wise, they are very huge. And all these mines once auctioned out -- means, even if this 4, 5 is done, it will be in the range of 100 million tonnes.

U
Unknown Analyst

Lastly, sir, what is the status of coal gasification project? Will we go -- will we start -- will you do something in the near term, medium term, tender out some large tenders? Given the fact that there is a national coal gasification policy in place, how do you see you over the medium term?

P
Pramod Agrawal

See, we are not implementing this in EPC mode. We are trying to implement in DO mode. Dankuni's tender was route, but there are certain complexities because of which it is taking time. And I don't know what will happen to that tender. But rest of the -- 2 tenders have been issued. We are waiting also for the government's clarifications about what type of subsidy they are going to provide or what type of support they are going to provide. Once it becomes clear, then the viability can be established and then perhaps it will be possible to move forward and define the time lines.

U
Unknown Analyst

Sir, which are these 2 tenders?

P
Pramod Agrawal

One is [Foreign Language] -- CCLN and...

U
Unknown Executive

ECL and SECL.

P
Pramod Agrawal

ECL and SELC.

Operator

The next question is from the line of Raashi Chopra from Citi Group.

R
Raashi Chopra
Director & Analyst

So what is the cash on your books, net cash on your books as of December?

P
Pramod Agrawal

As of January, and I know it is about INR 30,000 crores. And as of December end, it was INR 27,000 crores?

U
Unknown Executive

INR 28,000 crores.INR crores...

P
Pramod Agrawal

INR 28,000 crores. Hello?

R
Raashi Chopra
Director & Analyst

Yes. Okay. So got that. Second thing is on the e-auction prices. You mentioned that the premium was 100% in January. Is that still persisting through the -- through February as well?

P
Pramod Agrawal

February, I don't have a report right now. But Director of Marketing, I request if he has got some figure. He will tell you. But in January, we did got 103 million -- 103% thing. And that was about -- for 8 million tonnes coal? Or just -- 12 million tonne coal. And in February -- do you have data?

S
Satyendra Nath Tiwari
Director of Marketing & Director

February, no, I have not finalized it. But it will be more than 12 million tonnes.

P
Pramod Agrawal

In February he's saying it will be more than 12 million tonnes, and the rate will be in the same range.

S
Satyendra Nath Tiwari
Director of Marketing & Director

Same range.

R
Raashi Chopra
Director & Analyst

Same range, okay. And do you anticipate that the situation at the power plants in terms of the inventory gets better in the next -- course of the next few months?

P
Pramod Agrawal

It is getting better. There's no doubt it will get better because there is 23 million tonnes already there in powerhouses and 8 million tonnes, as I mentioned, is there in pipeline. Means it is not just -- it is extra coal that is lying in the goods sheds and washeries, et cetera, of powerhouse. So we have already sold that coal. Once it reaches there, it will become 31 million, 32 million tonnes. And we have increased -- the accretion is taking place every day. And I hope in April, May, June, again, our production will remain good. And in that situation, there should not be any shortage of coal in powerhouses this year.

R
Raashi Chopra
Director & Analyst

Got it. Okay. Just one last question from me. You said that you had a meeting for the wage negotiation yesterday. What do they ask from the union at the moment?

P
Pramod Agrawal

At the initial stage, the asks are like sky. They're asking for a 50% increase in everything. So those asks have got no meaning.

Operator

The next question is from the line of [ Hemal ], an individual investor.

U
Unknown Attendee

Just very quickly, what is the cash on the book as of December 31 and the debt that we have?

P
Pramod Agrawal

There is hardly any debt. Cash is about INR 28,000 crores. And we have removed all the short-term borrowing. There is a long-term borrowing, which gets reflected because of those railway projects of the CERL and CWRL. It's about INR 3,500 crores.

U
Unknown Attendee

Sir, so just one final question. The rest is all answered. In case we are going to continue with the INR 16,000 crores to INR 17,000 crores CapEx next year and if the price rises don't happen, the wages do have to increase as per your negotiations, do the additional CapEx still continue and you'll borrow for the same? Or how do you -- or is it a capital allocation where CapEx gets the front-end investment over the dividend policy? How does it work in your mind? If you can shed some light on it.

P
Pramod Agrawal

Giving any commitment about future will be difficult. But what I think -- there is no reason that prices will not increase. Prices will have to be increased. Otherwise, coal production in the country will get tougher. Because some of my subsidiaries are also -- already feeling the pinch. And hence, that will happen. But in a hypothetical situation, nothing happens, then we are a 0 debt company and we can leverage our balance sheet very easily at a very low cost. So that is not a bad option. We will do that.

Operator

The next question is from the line of Amit Dixit from Edelweiss.

A
Amit A. Dixit
Financial Analyst

I have just 2 questions. The first one is on incentives. Earlier, we used to get incentives in fourth quarter. But last year, we forgot it because of COVID situation. So this year, do we -- I mean, how much incentive can we expect in fourth quarter? That is the first question.

P
Pramod Agrawal

We had waived the PIs -- I think you're asking about performance incentive because no other incentive is there in Coal India. That is there till March. That waiver was given till March. And after March, we are going to -- means, that's there.

A
Amit A. Dixit
Financial Analyst

Okay. And one another bookkeeping question. What was the cash flow from operations in -- for the 9 months FY '22?

P
Pramod Agrawal

Cash flow from operations perhaps -- can you tell? [Foreign Language] I won't be able to tell you right now.

U
Unknown Executive

Around INR 16,000 crores.

P
Pramod Agrawal

About INR 16,000 crores. I will send you this answer. Okay?

A
Amit A. Dixit
Financial Analyst

Okay. Great.

Operator

The next question is from the line of Rahul Modi from ICICI Securities.

R
Rahul Modi
Analyst

Just quick 2 questions, sir, one on the employee cost. Sir, how is the attrition rate panning out as we speak? So you -- and given the attrition and post the wage hike that has to happen, sir, you see normalization of the employee cost and that not increasing going forward? That is first. And second question is, sir, regarding the 3,000 megawatts of solar projects that we were planning to do, sir, any update on that, please?

P
Pramod Agrawal

First thing, attrition of the employees. That is going as we had predicted, because there is no prediction involved in that because the retirement age is one thing which is fixed. It is not decided by god. It is decided by man. After wage hike, attrition will take place, will continue. And because of certain provisioning this year, we have seen slight increase in our employee cost. But in coming years, it is likely to reduce further because we had not provided earlier for one -- this CPRSME, means post retirement medical benefit, for nonexecutive.And secondly, there was some provisioning to be made for gratuity also. Because of that, we had to make some provisioning this year and last year as well -- last quarter of the last year as well. And so, there is some this -- I won't be able to say that this reductions or the reduction in manpower will be adequate to compensate completely for the -- completely for the wage hike that is likely to take place. But that wage hike will not be significantly -- will not significantly the PAT of the company. That much I'm quite sure.

R
Rahul Modi
Analyst

Right, sir. And last, sir, on the 3,000 megawatts of solar plant...

P
Pramod Agrawal

Okay, 3,000 megawatts thing. We have already placed order for 190 megawatts. 90 megawatts is in pipeline, which the order can be made very soon. And another 100, 150 megawatts is in pipeline. We were bidding for this in whatever market we are getting. Except for 100 megawatt, rest of the thing is for our internal consumption. We were bidding in whatever discounts were coming forward and trying to get that. But unfortunately, the market has been fluctuating and the taxes, et cetera, have increased substantially. So we have not been able to -- we have not been very successful in that.Now we are planning that we can have solar power plants in our own land which is lying vacant. And perhaps with that, the cost of generation will come down and we can bid. So that we are planning.

Operator

The next question is from the line of Saket Kapoor from Kapoor & Company.

S
Saket Kapoor

Sir, coming to the point of this staff cost versus the attrition part. So today's employees trend, the ex number -- what is the reduction we are expecting for this year and for the next financial year in the absolute number term?

P
Pramod Agrawal

The net reduction -- attrition -- reduction in the manpower is in the range of 14,000 to 15,000. This year, again, it will happen and next year, again, that will happen.

S
Saket Kapoor

Right, sir. And sir, on the setup of this employee cost, sir, looking at the size, the projects we are contemplating and the way the production is ramping up, sir, being a government organization, is this going to be the employee cost structure permanently that a fair share of the revenues goes towards the payment of employee costs. We can understand the social obligation, the duty and government being the owner. But then you are also in the listed space and you have your minority shareholders to also accountable for, if my point is correct, sir.So sir, in that case, the ratio of employee cost to the total revenue stands slightly unexplained in that sense. So if you could explain to us, going forward, is this the same ratio going to be? Because sir, as you have told [Foreign Language] their ask is 50%. And as and when we go for an increase in the selling price, they would be putting pressure again for revision or -- in that correlation. So what is the thought process? And how is this cost going to plan out, say, from today at 630 million to 1 billion and then above -- over and above that. So if you could explain.

P
Pramod Agrawal

See, Saket, the employee cost has remained fairly constant in absolute terms over the last 4, 5 years. If you see the number, it has remained almost constant. There might have increased 1% or 2%, 3% or something like that, but the employee cost has not increased despite increase in DA, despite increase in their increment that takes place every year.So if we increase the volume, that employee cost is not going to increase in the same proportion. Today, we are getting more than 70% of our production through outsource mode. So we are not dependent completely on our permanent employee to increase the production, nor are we planning to induct more manpower just to increase the production. That again we are not doing.So there's no reason why the employee cost percentage and the total expenditures should not reduce in coming years. It will come down substantially over the year. Our employee strength will stabilize somewhere near 1 lakh or something after maybe 6, 7 years. So that is the thing that is likely to happen. So in long-term employee cost is going to reduce.Whatever CapEx that we are doing is not requiring extra manpower. If we are constructing FMC, et cetera, they are being maintained by the contractor in the initial 4, 5 period. And thereafter, we are outsourcing the maintenance part and operation part to the private sector. So there also, we are not increasing extra manpower. So slowly, the cost of the employee as a percentage of the turnover is likely to reduce substantially.

S
Saket Kapoor

And sir, then what is the key reason for such kind of valuations we are commanding. Sir, if we look at your presentation...

P
Pramod Agrawal

Something -- an enigma to me also.

S
Saket Kapoor

Just putting the thrust again, sir. Just...

P
Pramod Agrawal

That is an enigma to me also why the share market is not -- maybe this is because it is a fossil energy and people are not liking the fossil energy company. All over the world, fossil energies are being valued at much lower. And secondly, maybe because it is a government company and sometimes government takes steps which are not appreciated by the stakeholders -- shareholders. Because of these reasons perhaps we are undervalued.

S
Saket Kapoor

Sir, if I may...

Operator

Sorry to interrupt you, Mr. Saket.

S
Saket Kapoor

Yes. Ma'am, if I could make my follow-up and then conclude, ma'am, with permission of the Chairman.

Operator

Please go ahead, sir.

S
Saket Kapoor

Sir, as I was putting the thrust on the restructuring part, sir, when we look at the structure for Coal India, it is all the subsidiaries and Coal India is the holding company. Correct me there, sir. If that could be a reason that a holding company discount is prevailing sharply over the market capitalization. And we should contemplate things like what Vedanta was looking forward, just to get it first delisted and then again...

P
Pramod Agrawal

Saket...

S
Saket Kapoor

Yes, sir.

P
Pramod Agrawal

Saket, on this topic, we can discuss why Vedanta was doing and why not we should do. These are not things we can discuss openly. And you know much better than me why Vedanta was doing, why it was undervaluing the market, why it was trying to sell it at much lower price. These are known facts.And secondly, I told you, it's not because of -- just because of this. Why NMDC is being valued so low? These are the considerations which we have to [ talk ]. So we can discuss this thing sometime offline. Come down to Calcutta, we can discuss it.

S
Saket Kapoor

Sir, I'm in Kolkata, sir. I will come down and...

P
Pramod Agrawal

Fix the time and come down.

S
Saket Kapoor

Yes, sir, I will do that.

Operator

The next question is from the line of Faisal Hawa from H.G Hawa and Company.

F
Faisal Hawa

Sir, do -- will we continue to outsource our contracts for -- like we did to Power Mech, et cetera, and keep on reducing our staff on the rolls? And will this accelerate like anything now? Or we will continue with our own staff further up...

P
Pramod Agrawal

I couldn't get your point. Means -- can you repeat the first sentence?

F
Faisal Hawa

Sir, can you hear me now?

P
Pramod Agrawal

Yes, that's right.

F
Faisal Hawa

Yes. My question is that we have been outsourcing most of our extraction and other contracts to third-party contractors like Power Mech Projects, et cetera. So will this continue as a trend, where we will try to reduce our employees on the books?

P
Pramod Agrawal

See, our employees are reducing. I am not planning to increase it substantially. So extra production has to come through outsourcing. So that is the plan of the company.

F
Faisal Hawa

Then why are we not issuing more tenders for the same in other mines also?

P
Pramod Agrawal

[indiscernible] a lot many tenders. You see a number of tenders are finalized for the last year. We have created extra capacity of excavation and transportation.

F
Faisal Hawa

Okay, sir. And what could be the savings in terms of crores of rupees in [indiscernible]?

P
Pramod Agrawal

Giving numbers, et cetera, to such a thing will be difficult. But about 75,000 person -- 25,000 people are producing about 70,000 coal. 70% of our production and about rest of the manpower is producing 30%. So I don't have right now, but we have got those figures, what is the cost per tonne from the departmental labor and from the outsource level. Do we have that? Can we calculate that? I can get it calculated and then send it. I don't have it right now.

F
Faisal Hawa

No problem, sir. And sir -- I mean, efficiency wise, you feel that the third-party operator's labor is much more efficient than ours. That's for sure.

P
Pramod Agrawal

Let's talk all these things offline.

F
Faisal Hawa

Okay, sir. But I must admit that you have given a very candid con call. And within the government's constraints that you have, you've guided these investors very well.

Operator

The next question is from the line of Kamlesh Bagmar from Prabhudas Lilladher.

K
Kamlesh Bagmar
Research Analyst

Sir, any update on the aluminum project?

P
Pramod Agrawal

Yes. We are working hard for that. We have got approvals, et cetera, from Odisha government. We have requested them to give us mine on nomination basis. Once that is allotted, then we'll go ahead with it. It is a time-taking process. But to my understanding, every stage of aluminum is a profit-making venture. We can sell bauxite and make profit. We can sell alumina and make profit. And we can make aluminum and make profit. So I think this is one project on which we are seriously working. Whether we succeed or not, that is a different question.

K
Kamlesh Bagmar
Research Analyst

I believe DPR and all has been made, sir. How much...

P
Pramod Agrawal

DPR means -- PPR has been made. Including powerhouse, it will cost something like INR 26,000 crores, INR 27,000 cores. But it will be based on leverage things. And we are not going to invest everything, as we do in generally our own projects.

K
Kamlesh Bagmar
Research Analyst

Okay. And how much, like say, share or equity would be there?

P
Pramod Agrawal

We are planning that our -- we should hold the majority stake, because -- otherwise, on a nomination basis, getting the bauxite mine is not possible. So we are working in that line. But it will depend when the partner is inducted, that what he wants.

K
Kamlesh Bagmar
Research Analyst

Okay. And lastly, sir, your other expenses has increased a lot, sir. Like it's an increase of roughly around, if I see, 18-odd-percent year-over-year, while our production has increased almost, like say, 4.5%. So what's the reason for that?

P
Pramod Agrawal

Other expenditures -- one thing is that environmental and tree plantation has increased, hire charges have increased. But I won't be able to give you the details why it has increased. Maybe I will request the Director of Finance -- we don't have Director of Finance right now -- the CFO to send it to you separately.Any more question? Or...

Operator

We do have a question from the line of Vipul Shah from Sumangal Investment.

U
Unknown Analyst

So what will be your employees trend 3 to 4 years down the line?

P
Pramod Agrawal

I think we should reduce 14,000 to 15,000 per year. That is the likely reduction. This year, we are likely to close at 2,45,000. So whatever time period you keep in mind, you will keep on reducing by 14,500.

U
Unknown Analyst

So -- means that would result in how much reduction in -- as a percentage of revenue, the employee cost? Any ballpark figure, sir?

P
Pramod Agrawal

In general, if you avoid -- if you don't take into account the incidence events like price -- wage negotiation, et cetera, or any other increase that suddenly takes place, like gratuity was increased by central government, then it will remain almost constant.

U
Unknown Analyst

So it will not get reduced?

P
Pramod Agrawal

Marginal reduction may take place. Because there is an increase of about 3% every year due to increment. There is further increase of 1% or 2% because of the promotions, et cetera, 1% you can take on average. And then the DA thing gets compensated. So in real term, it will -- means, in real term, it will get reduced. But in absolute terms, in that numerical sense, I don't think there is a serious reduction in that.

U
Unknown Analyst

And sir, lastly, regarding this fertilizer project, what will be our investment? And when is it likely to be operational?

P
Pramod Agrawal

There are 2 sets of fertilizer projects, one is HURL and one is TFL. In HURL, the total expenditure is about INR 16,000 crores. So our share is about 33% of that. That means about INR 1,400 crores to INR 1,300 crores. And in TFL, again, the total expenditure is about INR 13,000 crores and our this is -- so it will be about in the INR 1,300 crores. That is the total CapEx that is likely to take place.And one thing, we may say that the CapEx has taken place this much. This also includes the proportional investment that we are making in HURL and TFL and taking loan there. So in an absolute outboard terms, this INR 15,000 crores will not take place in actual terms.

U
Unknown Analyst

Okay, sir. And sir, I have many questions regarding your employee cost, but you will not be comfortable discussing it and so you've suggested we can take it offline. So whom should I contact for your time for these questions?

P
Pramod Agrawal

You consult Company Secretary, Mr. Viswanathan. He will arrange the thing.

Operator

The next question is from the line of Ashish K. from Centrum Broking.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

2 questions from my side. One is on e-auction volume. So when you spoke about Jan, Feb, which is around 100% premium, so when will it start hitting our P&L?

P
Pramod Agrawal

Next quarter, because actual lifting will start in about 30, 35 days.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

So as of now, if I look at from -- in fourth quarter actual thing will start, which we have already booked in November-December time?

P
Pramod Agrawal

Yes, that will start getting reflected in the fourth quarter.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

And what was that percentage, sir? Is it more than 45%?

P
Pramod Agrawal

Definitely. On the average, this year, we have got something like 60%. It's more than 60%. So till December also, it was more than 60%, 70%.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

Okay. And in terms of volume, you're saying that fourth quarter e-auction volume which will be reported in P&L will be higher than what we reported in fourth quarter last year. That's right?

U
Unknown Executive

We'll be reaching...

P
Pramod Agrawal

No, he's talking about in the terms of lifting. Because if the lifting takes place, it gets reflected in the P&L.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

So last year, it was 29 million tonnes, sir, in fourth quarter.

P
Pramod Agrawal

Yes.

U
Unknown Executive

It will be much higher than that.

P
Pramod Agrawal

We are expecting slightly more than that.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

Okay. That's great. And sir, secondly, on employee cost. Obviously, you must be making some increase in that and taking provisions for that. So what was the rate at which we are making provisions in our employee cost as of now?

P
Pramod Agrawal

What we are making right now is about INR 100 crores per month.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

I'm talking about, sir, like their ask initially was 15% increase. So is it possible to quantify what percentage increase we are taking into account while making provisions...

P
Pramod Agrawal

I won't discuss that anymore.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

No issues, sir.

P
Pramod Agrawal

It will affect our negotiations.

A
Ashish Kejriwal
Senior Vice President of Metals and Mining

All the best. And really you are doing pretty well. And just we are waiting for the ultimate thing, which you also are waiting the most.

P
Pramod Agrawal

That's right.

Operator

Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Vishal Chandak for closing comments.

V
Vishal Chandak
Analyst

Thank you, everyone, for joining this call. And thank you very much, sir. I think this was a very, very candid conference call that we had had for a very long time and I'm sure investors will appreciate that. Sir, I would hand over the floor to you for your closing remarks.

P
Pramod Agrawal

Thank you, Vishal. Thank you, everyone, for being -- so patiently hearing for me. Sometimes I become slightly longer. But then to explain the things, one has to put some words on that. Thank you very much for hearing me so patiently. Thank you.And I would like to meet you people physically. Maybe soon we will be able to travel to Bombay. Thank you very much.

Operator

Thank you. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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