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IRB Infrastructure Developers Ltd
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Good morning, ladies and gentlemen. Welcome to the IRB Infrastructure Developers conference call for discussing the unaudited financial results for the quarter ended December 31, 2022 and recent developments. We have with us on the call today, Mr. Virendra Mhaiskar; Mr. Dhananjay Joshi, Mr. Anil Yadav, Mr. Mehul Patel; Ms. Poonam Nishal; Mr. Tushar Kawedia; and Mr. [indiscernible] from [indiscernible].
As a reminder, all participant lines will be in the listen-only mode [Operator Instructions]. Please note that the duration for the call would be 45 minutes, and any queries left unanswered on the call or after the call can be subsequently mailed to the management for adequate response and resolution.
[Operator Instructions] Please note that this conference is being recorded. I now request Mr. Mhaiskar to give you an overview of the significant developments during the quarter. Thank you, and over to you, sir.
Thank you. Good morning, everyone. I welcome all the investors and analysts on the quarterly con call. Hope you have all been able to go through our detailed numbers as well as the presentation release.
As part of our business strategy, we are continuously enhancing our returns to leverage optimization. We are pleased to inform you that another subsidiary of IRB Infrastructure that is Udaipur Tollway Limited has allotted unlisted rated redeemable nonconvertible debenture aggregating to INR 7 billion on a private placement basis to eligible investors on December 29, 2022.
The [ LCD ] proceeds from refinancing has been utilized for part takeout financing for the existing project loans, which will provide a significant saving of INR 100 million annually aided by the fixed rate of interest of 8.9% per annum for next 5 years.
This is in further to debt refinancing of INR 21 billion for 2 projects that is Solapur Yedeshi and Yedeshi Aurangabad completed by us in last quarter. We will continue this strategy of leverage optimization for other projects in the group.
Sale of VK1 project to the public InvIT has been concluded in this quarter, and we have been received consideration of INR 3.4 billion, which is close to 1.2x to book. Net debt to equity on consolidated basis is less than 0.8321 as on December 31, 2022.
CRISIL has upgraded the rating of the company by a couple of notch. This has led change in the rating category of IRB from A to AA-. Post receipt of appointed dates, the execution of Ganga Expressway project is progressing in line with the schedule.
Recently, we have received appointed date for the Chittor Thachur HAM project on 24th January, 2023, and thereby all the projects have now received the appointed date and execution in going on. This project will also provide meaningful contribution to the construction revenue in the coming quarters.
As can be witnessed in our monthly disclosure of the toll collection, the robust growth is observed in Mumbai Pune and Ahmedabad Vadodara project, wherein Mumbai Pune has reported INR 10.6 billion for 9 months in FY '23 from INR 8.9 billion. That is 20% growth, whereas Ahmedabad Vadodara has reported INR 4.75 billion for 9 months FY '23 from INR 3.8 billion, that is 24% revenue growth on a year-on-year basis.
For same assets of private InvIT, we have witnessed growth in toll collection of from INR 8.5 billion for FY 9 months '22 to INR 15.4 billion for 9 months FY '23. That is 81% growth on year-on-year basis. The growth was led by achievement of COD in a couple of projects, traffic growth and tariff high.
The order book of the company now stands at INR 191 billion, which provides strong revenue visibility for next 2 years. Bidding calendar is quite robust and lots of projects are lined up over coming months. Considering the same, the company is targeting to add 6,000 to 8,000 worth of orders over the next few months. Now I will request Tushar to provide financial analysis for December '22. Over to you, Tushar.
Thank you, sir. I'll now take you through the financial analysis for Q3 FY '23 versus Q3 FY '22. The total consolidated income for Q3 FY '23 has increased to INR 1,570 crores from INR 1,498 crores, increased by 5%. The consolidated toll revenues for Q3 FY '23 have increased to INR 554 crores as against INR 507 crores, up by 9%. The consolidated construction revenue for Q3 FY '23 has increased to INR 1,17 crores from INR 991 crores, increased by 3%.
EBITDA for Q3 FY '23 decreased to INR 801 crores from INR 957 crores, declined by 16%. This is on account of onetime income booked for the last year. Interest cost has decreased to INR 367 crores in Q3 FY '23 from INR 547 crores, down by 33%.
Depreciation has increased to INR 215 crores in Q3 FY '23 from INR 192 crores, increased by 12%. PBT has remained unchanged at INR 218 crores at after share of JV, a loss of INR 13 crores has increased to INR 141 crores as against INR 73 crores, increased by almost 94%.
And the cash profit has increased to INR 369 crores in Q3 FY '23 from INR 361 crores, increased by 2%. Now I request moderator to open the session for question and answers.
We now begin the question-and-answer session. [Operator Instructions] First question is from the line of Mohit Kumar from DAM Capital.
The first question is on the Mumbai-Pune Expressway. Can you confirm that the traffic growth in Mumbai Pune for Q2 and Q3 was 10% or 7%? Is that number right? And are we up for traffic revision from April 1, 2023. Is that understanding correct?
Mumbai, Pune, as I have discussed in my opening commentary, the growth for 9 months was around 20% We Will confirm the quarter-wise improvement in toll culture and Mumbai Pune shortly.
Now with respect to Mumbai Pune, yes, you are correct, tariff revision is due from 1st of April. Typical on Mumbai-Pune, the rate revision happens after every 3 years. The next revision is 1st April, 2023. And this will be the last revision on Expressway. And hereafter, the rate will be eased on Expressway.
And with respect to NH-4, the tariff revision is around 16%, which will continue because that is as per NH policy. And Expressway this will be the last revision. In terms of the traffic breakup, roughly 75% traffic is on Expressway and 25% is on NH-4.
And on the quarter-on-quarter revenue growth, you are right, it is 10% when compared with the Q2 of FY '23.
Second is on EPC revision, the expectation for the...
Can you come louder? I think your voice is quite low.
Is it better now?
Yes.
So the second question on the EPC execution for the entire fiscal, what is the number we should bake in? I think we have done INR 900 crores, which is slightly low -- on lower side for this quarter.
Well, I think as you are aware that we got appointed date for Ganga in the last quarter only. Now there will be a ramping up of the Ganga in this quarter. And also, we have received the appointed date for Chittor Thachur. So probably in this quarter, we will be -- the revenue will further improve. And on a whole year basis, I think INR 4,500 will be the whole year revenue on EPC side.
Understood. Lastly, on the opportunity side. When you said you want to add INR 60 billion to INR 80 billion of order in Q4, are they HAM contracts? Or are there some opportunities from BOT or TOT?
Mohit, the contribution will come from the HAM and BOT both put together. As of now, there is one BOT project where already bids are submitted. And there are a lot of HAM projects also coming from the BOT. So this the order book which we [indiscernible] will be mix of BOT and HAM.
[Operator Instructions] Next question is from the line of Teena Virmani from Kotak Securities.
My question is related to ordering. You've mentioned last year expecting around INR 60 billion to INR 80 billion of orders. So, so far, ordering has not been that great, particularly from the sector and even for most of delisted play. So what would give you confidence that almost INR 60 billion to INR 80 billion will come within this year? Or do you expect any kind of slippage of order inflows to next year? How is the overall big pipeline looking to both from HAM as well as BOT?
Teena, it was correct that this year, we have not seen a significant ordering in last 10 months. But if you look at last 3 years, the order bidding was back-ended towards the same end of the EPS. And which we believe this will continue in this financial year also.
And if you look at the bidding calendar in terms of NHAI portal, there are 4 to 5 bids are lined in on a single day also. So probably, we expect by end of March, there will be a lot of ordering happening. And we believe that there will be a good order traction until end of March.
Just to add, Teena, you're right. Some of these projects could spill over to the next year as well, the beginning of next year. So to that extent, there could be some overlap. Otherwise, we are talking about the INR 60 billion to INR 80 billion opportunity within the lined up project itself.
And what is the size of total projects which NHAI has lined up maybe around INR 40,000 crores, INR 50,000 crores?
Roughly that, yes.
Opportunity size? Okay. And my second question is related to the scale up in revenues for Ganga Expressway and even Palsit Dankuni. So now we have seen it is getting reflected in the numbers also. How do you see it in terms of the next year scale-up in our revenues from both these projects?
Teena, execution, basically Ganga has started last quarter. And now the full way execution will be happening in this quarter. We expect the further growth in EPC execution in Q4, and that will continue till next 2 to 3 years. Because Ganga anyway, we have to execute the INR 5,000 crores of EPC order book in 12 quarters.
If I divide that 12 quarters also, then that translates roughly INR 500 crores to INR 600 crores of revenue per quarter coming from the Ganga Expressway.
Okay. Got it. And Palsit Dankuni?
Palsit Dankuni should be in the range of INR 200 crores to INR 250 crores of revenue per quarter basis.
Okay. Okay. So overall, in terms of EPC revenues, will there be any kind of lowering down of the guidance on the EPC revenue side for the company now that the orders are mostly back ended? So even if something comes in, let's say, March or April, it won't be reflected in the revenues at least for the next 6 to 9 months. So how do you see overall EPC revenues going forward?
I think this year, we will be doing EPC revenue of roughly INR 4,500 crores. And the next financial year, we'll be doing our [indiscernible] close to INR 5,000 crores of revenue in next financial year.
With the existing order book.
With the existing order book. And further, this order book is excluding GST. Earlier, we used to report revenue, including the GST and from this financial year, the revenue is getting reported, excluding the GST.
If there would have been 12%, that would have been translated INR 5,700 crores to INR 5,800 crores of revenue, including GST.
So as of now, we are not lowering down the EPC execution. We have the visibility. And next year, we will be -- with existing order book, we will be closing at close to INR 5,000 crores of revenue.
Okay. Okay. Got it, sir. And in terms of your debt on a consolidated basis, it would be good if you can share the breakup for both MIPL and Ahmedabad Vadodara and [indiscernible]?
Sure. So our debt at Mumbai-Pune is INR 6,000 crores and Ahmedabad Vadodara is at INR 2,900 crores. And at the standalone IRB level, plus MRM including our working capital, it's close to INR 3,500.
This INR 3,500 is net debt?
No, this is gross debt. So net debt, if you see, it's close to INR 10,100 crores. Gross debt is at INR 13,260.
And let's say that IRB level will be roughly INR 1,200 crores, INR 1,300 crores.
Yes, that's right.
Okay. Okay. Because you have repaid debt -- some of the debt during the last year.
Yes, yes.
Got it. My last question is related toll collections, sir. Would it be possible for you to quantify? I know it's a little difficult to quantify the adjusted toll collection growth for the other project. Is it different project that's coming on different time lines?
And the toll rate hikes were determined by the COD and from [indiscernible] and completion of these projects. So would it be possible for you to quantify what has been the adjusted toll collection growth even the Private InvIT portfolio?
Teena, Mumbai Pune, there was no tariff hike. And last 9 months, we have seen almost 20% kind of growth on the Mumbai Pune. And private InvIT, as you rightly mentioned, different project has got completed at different times. But there also, we have seen a high single digit on a portfolio basis.
Some of the projects have even delivered more double-digit kind of growth on the traffic front. If you look at Solapur Yedeshi and Yedeshi Aurangabad, both projects were operational last year as well. And there, the growth was more than almost double-digit on both the projects.
This is the traffic growth?
Traffic growth, I'm talking about.
Okay. Okay. And how is the sustainable number looking in terms of the traffic growth for these projects?
I think the base has now already got corrected. And we expect the traffic growth should be in the range of 5% to 6% for the FY '24. I think the similar 5% will be tariff revision based on original WPI number.
Next question is from Parikshit Kandpal from HDFC Securities.
Congratulations on a decent quarter. So my first question is on what is the total value of the bid yet to be open where we have submitted?
I think, Parikshit, there will be some projects where we will be -- we have submitted the bid. But as per policy of the company, we don't share this data once we will become relevant bidder, definitely, we would love to share that data with you all.
Is there any change in the [indiscernible] in terms of tariff signed [indiscernible] last tariff hike, which we observed?
So change in as such Parikshit, what we're talking about on the traffic front?
No, no. The tariff hike. So this is this only 1 tariff hike, which was applicable.
So next is due in April '23, which will be just in a couple of months.
That will be about how much, 20%?
18%, around 18%.
That will be the last tariff hike? So then after that, we set the project [indiscernible]?
Yes, that will be the last tariff hike on Expressway. But NH-4 will increase by 15% every third year.
Just a question on this taxation on the return on capital. So how will it -- will there be any impact on the Private InvIT [indiscernible] distributing returning capital the parent and shareholders. So how the taxation happened there?
I think, Parikshit, there in terms of the expectation in terms of [indiscernible], it was there that if I buy a unit, which has a cost of INR 100. Till I receive INR 100, there will not be any taxation.
But with the amendment in the budget, it looks like that there will be a taxation if there is a repayment of capital. Redemption of unit, you will get a benefit of the cost of acquisition. But I think there are different InvITs are representing through their body at different forum.
And I think probably the clarity should emerge within a quarter or 2. But however, as I think InvIT has talked about in their con call, in next 1 or 2 years, there will be hardly any repayment, which will be happening from their public InvIT.
And in Private InvIT, the repayment was not due for any next 5 to 10 years. So that as such, there is no impact from a Private InvIT perspective as well. But as rightly mentioned by [indiscernible] that the various associations are represented the case and maybe we can have some outcome in coming month.
Just to understand the current context after the changed amendment and changing in amendment terms and suppose if it continues then, how will the taxation happen now? So is the private InvIT distributes the dividend? So it is up from the [indiscernible] trust to the IRB level and then IRB distributes it to its shareholders. So how will the taxation now change?
I think as of now, if there is an interest element, interest element, the private InvIT, basically the taxation will not be Private InvIT. Interest will be taxable in the hands of IRB. With respect to whatever the dividend Private InvIT will say, the dividend will not be adaptable at inward level, but the dividend will be taxable at IRB level.
And the third element is the repayment of capital or redemption of the unit. Repayment of capital, which earlier was not taxable, now it will be taxable. Redemption of unit, you will get a cost of acquisition as a reduction.
Okay. So nothing -- so everything is [ passed through ] but the IRB will be paying the taxes. And then after that, clearly if IRB declares the dividend, it will go to the shareholders of IRB. So there won't be any tax incurrent on the shareholders of IRB post absorption of this taxation by IRB?
Yes. Basically, as of now, the regulation was clear clearly that only even before this amendment also. If interest is paid by the trust, if IRB receives the interest, it will be taxable in the hands of IRB.
Okay, then there was a change, right, that dividend will be taxable in the hands of the investors who receive it. So here, in this case, it won't be applicant?
Dividend is -- the SPV is following the old regime, the dividend will not be taxable. If SPV is following the new regime, dividend will be taxable. Private InvIT most of the PVs are eligible for ATIA.
Probably, we will be continuing ATIA 35D, 35 [ ATIA ] deduction. Considering that we will be continuing with the old provision. And considering that the dividend will not be taxable in the hands of IRB, whatever the dividend is paid by the Private InvIT.
Okay. And either in the hands of the investors you will pass through the dividend?
Definitely, you see IRB as of now shares almost 20% of profit as a dividend to the shareholder, which is received from a subsidiary only. So I think to that extent, IRB is getting benefit of that. Apart from that, there will not be any other benefit, which will be available to IRB.
Next question is from the line of Prem Khurana from Anand Rathi.
Congratulations on good set of numbers this quarter. Sir, I just want to understand a little better on the order addition that you spoke about, INR 6,000 to INR 8,000-odd crores.
Prem, your voice is not audible.
Is it better now?
Yes, it is better.
Yes. So I want to understand, I mean, when you talk about the INR 6,000 crores to INR 8,000-odd crores of order addition. So I mean, you time and again identified that our preferred mode is BOT toll and then TOT and then hybrid. So this INR 6,000 crores to INR 8,000 crores, would you be able to break it down? I mean, how much are we targeting in terms of BOT?
And also, if you could help us understand, I mean, the pipeline or the prospective pipeline that you talk about from NHAI. How many of these would be BOT toll side. So I think you said you've already bid for 1 project on BOT side. But if you look at the entire pipeline as of today, how many would be on BOT, how many TOTs and [indiscernible] would be hybrid or EPC, if you could help us understand, I mean, the mix that you're targeting?
So Prem, I think what we are discussing here is the EPC book. So whether it comes from BOT or TOT or HAM, the EPC piece of that would be in the range of INR 6,000 crores to INR 8,000 crores is what we are saying. Now the breakup can change depending dynamically on what we win, what we don't win. But the EPC piece among the 3 of them together should be in the range of INR 6,000 crores to INR 8,000 crores.
Okay. So we are indifferent. I mean, as long as we are able to manage the EPC, we are able to generate the kind of IRR that we generate on the CapEx.
Yes.
Okay. And sir, second question was on the equity required. How much would be the equity values that we will infuse in all these assets? I mean the hybrid and the Ganga? And then if you can give the [indiscernible]?
Yes. This year, close to INR 200 crores of equity, next financial year close to INR 700 crores of equity. And in FY '25, a little less than INR 200 crores of equity is required. This is for the existing projects.
Sure. And this is our share, right? I mean in Ganga, we would put in half [indiscernible]?
Ganga we will put in 51% and [indiscernible] will put 45%.
Sure. And just one last question on bookkeeping [indiscernible]. So when I look at our numbers for last few quarters on EPC side, our tax rate seems to be on a higher side. Where do you see this number settle down because it's in excess of [ 35-odd ] percent. I mean, why would this number be so high? Are there any one-offs in this tax that you report? I think second quarter was 40%, third quarter was around 35-odd percent.
I think, Prem, if you are referring the corresponding quarter of the last year, there was some deferred tax asset recognized, which was a onetime kind of impact, which was for VK1 and which is not continuing in this quarter. But that has led some kind of change in the taxation.
Anyway, most of the companies are 25% tax bracket. And moving forward, considering there are some timing impact, around 27%, 28% should be the taxation rate ideally. But Ahmedabad Vadodara, because of the losses that we have a loss in Ahmedabad Vadodara and because we are not recognizing the deferred tax asset over there, that increased the tax a little bit. The taxation should be in the range of 30%, 32% going forward.
And once we get some resolution on Ahmedabad Vadodara , then thereafter, the tax rate should reduce. Because as -- once we'll get a resolution in Ahmedabad Vadodara, there will not be any book loss in Ahmedabad Vadodara. This is what we believe.
No, I was talking about the Construction segment, in particular. And just on the SPV side, you would have these losses, which is where the tax won't be what we actually pay. But on the construction side, 2Q was around 40%. 3Q is around 35%, which is higher than the 25-odd percent that we generally bake in our numbers.
So when -- so this is, again, what we discussed is on account of the inflation income, which comes under the HAM projects. So there, what is happening when we have a HAM income, inflation income from accounting partners, there's no tax because it's like a notional for us.
However, for the other revenue, which forms part of the construction, the rate is 25%. In some SPVs, their rate is per the old regime. But for the quarter-on-quarter performance, the difference between the HAM account, the BOT, the rate differentiate for us.
Next question is from the line of [indiscernible] from [ Anti stock ].
Sir, we are given to understand that Hyderabad ORR details should be out by any time. Any color on that? What was like -- I mean, did you participate in it? Or when do you expect that to be concluded?
Which bid?
Hyderabad ORR.
I don't think the bid is yet -- the date has yet come.
Almost like -- I mean it was said that by Jan weekend, I mean, Jan last week will be out.
I think the bid has -- it was postponed, if I remember right.
Okay. So is this in your cards as such?
I can't disclose that at this point.
Okay. Sir, the TOT packages, any update on that part. Because after the last one bundle, any clarity, any guidance on the new TOT packages that could be [indiscernible] or will NHAI resort to [indiscernible]?
Again, that's for NHAI to decide. Whatever TOT they announced, we will evaluate and decide our course of action. But very difficult for me to say what NHAI would do.
Okay. Sir, any guidance on the state highway opportunities, BOT -- in the form of BOT?
We keep evaluating the -- I mean, we believe there would be some opportunities that can come on BOT as well. So like Ganga was a state BOT project, and it appears to be a very attractive proposition. So we've participated in that. So any such opportunity comes in, we will definitely evaluate that as well.
So nothing on cards at this point in time as we discussed?
No.
Next question is from Nikhil Abhyankar from DAM Capital.
So if you look at Public InvIT assets, they have started doing a lot better over the years. So is there any chance of higher dividend in the coming quarters or say next year?
On Private InvIT or...
I mean the Private InvIT,sir. Not the Public InvIT, sir.
So Private InvIT, you will appreciate that a majority of the projects have got completed in the last 6 to 9 months, and those projects are now in the stabilization phase.
And in the coming years, we have also refinanced three of the projects pushing back the amortization and increasing the cash release. Given this trend, certainly from next year, there would be some good possibility to have our dividends out from the private InvIT to both the partners.
No guidance you would probably add, sir?
We would not -- see, it's also incumbent on how the projects perform, what the tariff increase we get, how much more refinancing gets done and how fast. But yes, I mean, on the numbers, maybe I can give you a guidance on -wish I could give you the guidance on how the numbers look. But certainly, that looks to be a doable thing for the next financial year.
I think we are giving the monthly disclosure. In December, we have done a revenue of INR 195 crores. If you take a revenue close to INR 200 crores of revenue from the private InvIT [indiscernible]. For next financial, that translates roughly INR 2,400 crores.
And if I assume roughly 7% growth because this is the latest number, then the revenue translates roughly INR 2,550 crores of revenue. INR 750 crores is share -- NHAI share, the INR 1,800 crores will be the revenue -- net revenue for the private InvIT. And around INR 200 crores is the O&M expenditure. So roughly INR 1,600 crores will be EBITDA.
Against the INR 1,600 crores of EBITDA, there is a debt of roughly INR 10,000 crores. And as we are trying to basically do -- interest is at close to 9%, 9.5% on average cost of debt. There will be a surplus available, and that surplus can get distributed.
Understood, sir. And sir, of the INR 5,000 crore PPC revenue guidance for next year, how much will Ganga contribute?
[indiscernible] quarter.
Ganga will be executed over the period of next 2.5 years. And roughly INR 500 crores to INR 600 crores per quarter kind of execution will be happening on Ganga to complete the project within 2.5 to 3 years, balance 2.5 years. So I think roughly INR 500 crores to INR 600 crores of execution will be coming from Ganga.
Understood. And the last question, any update on Ahmedabad Vadodara situation?
On Ahmedabad Vadodara, again, the arbitration has moved forward, and it is in the final stage is what I can say at the moment, but still at least 3, 4 months of work balance.
Next question is from the line of Alok Deora from Motilal Oswal.
Congratulations on a decent quarter. Sir, just had a couple of questions. First, on the -- we have been -- since last few quarters now, we have been talking about some toll projects also coming through from NHAI side, considering their stretch finances and you know -- but still we don't see too many of toll projects in the pipeline. So what's the view here? Because apart from 2, 3 projects here and there, we are not really seeing toll projects coming in any significant way?
So if I'm right, I think they announced the total number of BOT projects that got bid at NHAI and this year was at least, I think, 3 . So one got canceled, one was awarded to one developer and the third one is in the bidding stage. So 3 projects we announced.
And I think as they are also seeing improved participation, we continue to believe that the number will keep going up. I mean, I agree that it is at it's minimal as possible today. So the only way forward from here can be up.
Sure. And also in HAM projects, they were looking to reduce the equity contribution. But in some of the other calls of some of other contractors, we understand that is not happening anytime soon now? Yes. Any update from your side?
So that appears to be the case.
Okay. Any reason, sir, for that?
I don't know. They might be having enough money, so they don't need to cut it out. So for -- I mean for a developer like us, it's a great thing that is we are needing more money, that's good.
Yes, yes. No, I think the idea was to reduce the competition. So I was just...
See, one thing I'm observing this year is the competition seems to have came down the bit. Because last year, you will remember, there was no bid bonds required to be given along with each of the bid. Whereas this year, there is a 1% bid bond required to be given alongside bid. And when you have so many bids happening in close proximity, certainly, everybody tries to have their own priority basis, which they bid.
So the number of participants in each bid has certainly come down. So unlike what we used to see 20, 25 people bidding in each project, now the number that tends to range between 5 to 8 or 5 to 10.
Sure. Just last question. So the interest cost has come down to around INR 370 crores or INR 365 crores for 3Q. So what would be the run rate going ahead? Could it be a similar number only? Or could we see further reduction here?
No. So this quarter, what you have seen is the number post repayment of debt, which we did in the first quarter of -- fourth quarter of FY '22. So this is the -- and in next quarter, what you will see would be more comparable number where the debt reduction impact would be there.
From the first quarter of next year, then there will not be multiple because the repayment of debt has happened in the fourth quarter last year.
No. But I think if you ask me directionally, you will see that the consolidating IRB will continue to keep going down because -- if I look at the debt profile in IRB, you have debt sitting in the Mumbai-Pune asset and [indiscernible], both the repayment is happening in a strong manner. And debt uplifting that would happen will be minimal because it is only to the extent of 40% of the project size distributed over 2 years.
And secondly, the holding company debt also is going down. So the way forward, consolidated IRB debt will continue to come down as we move forward. It is not certainly going up for sure.
Next follow-up question is from the line of Nikhil from DAM Capital. .
[indiscernible]
Your audio is not clear.
Am I audible now?
Yes.
Sir, have you booked profits for VK1 in [ transfer], so it comes out around somewhere [indiscernible] crores?
VK1, there is a profit on standalone because the investment was recorded at book value. And in consolidated debt, because HAM project accounting is done on the basis of [indiscernible], where one has to account for the receivable from NHAI upfront, considering that there was no freight impact on the consolidated accounts, but there was a gain of INR 50-plus crores in a standalone, as you mentioned.
Thank you very much. I now hand the conference over to Mr. Virendra Mhaiskar for closing comments.
Yes. So I think thanks all of you for taking time out. And it's the result season, but really appreciate all of you finding time and joining us to discuss the prospects of the company in the quarter gone by and the picture how it is visible at the moment in terms of business visibility going forward. And look forward to see you all again during the next quarter. Have a great day ahead. Thank you.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. We thank you for your participation and for using Researchbytes Conferencing Services. You may please disconnect your lines now. You may have a great day. Thank you.