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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 Audited Financial Results for the Quarter and Year Ended March 2021.We have with us on the call today Mr. Virendra Mhaiskar, Mr. Sudhir Hoshing, Mr. Anil Yadav, Mr. Mehul Patel, Ms. Poonam Nishal, and rest of management.There will be a question-and-answer session. Please note that the duration of the call would be 45 minutes and any queries left unanswered after the call can be subsequently mailed to the management for adequate response and resolution. Please note that this conference is being recorded.I now request Mr. Anil Yadav to give you an overview of the significant development during the quarter. Thank you, and over to you, sir.
I would like to welcome all investors and analysts on the call. Trust you and your families are well and safe. Hope you all have been able to go through our detailed numbers as well as the presentation release.In these uncertain and unprecedented time, we have endeavored to ensure the business stability by strengthening our liquidity position and visibility. With this overarching strategy, we expanded our source of funding to offshore markets in Q4 of FY '21 with a dollar bond issue amounting to INR 2,200 crores. It's rated, secured, repayment after 3.5 years and an option to refinance for the similar period again.Being an issuer, IRB was related as Ba1 and BB by the reported rating agency firms like Moody's and Fitch, respectively. We have received an increasing response for the bond, and it was oversubscribed by 2.8x with the participation seen from the marquee investor like GIC, Bearing, MetLife, amongst the other. INR 1,600 crores out of the proceed was deployed for the prepayment of the short-term debt and balance was earmarked to meet the CapEx requirement and other general corporate offers. We have closed the year with a cash of roughly INR 2,651 crores on hand, and total consolidated net corporate debt of INR 4,000 crores, of which 90% is payable to subsequent to FY '23, providing a strong visibility to our cash flow.In the process, we have freed up our credit line with the domestic bank to focus on our project funding for the future wins. During Q4 FY '21, we also backed 2 projects, 1 BOT in West Bengal, 1 HAM in Himachal Pradesh, amounting to INR 3,300 crores and extending our presence now to 10 Indian states.Thus, during FY '21, IRB won 3 projects totaling to INR 5,000 crores. We await appointed date from NHI for HAM project in Gujarat, while discussion for the financial closure of most recently 1 BOT in West Bengal and HAM project in Himachal is going with the lenders.NHI has further lined up project spanning 4,500 kilometers to be awarded in FY '22 amounting to INR 1.2 trillion. Good 15%, 20% of this is likely to be on BOT basis, while balance will be bid out on HAM and EPC model. This opens up large opportunity for IRB, and we will be keenly participating for BOT and HAM.On operation front, the buoyancy in the toll collection weakness in Q3 of fiscal year 2021, continued well into Q4 before resurgence of the COVID in India softened the traffic movement in the select region. Average per day toll collection for IRB plus InvIT portfolio, 11 tolling assets grew at 4.5% on quarter-on-quarter basis to INR 8.2 crores per day, excluding the KR BOT project where the tolling is temporarily halted due to farmers protest and, Thane, Ghodbunder, which is handed over on completion of the concession. The contribution for Thane, Ghodbunder project was 1% of the group revenue. It was pleasing to note that within a portfolio, our flagship project, Mumbai-Pune reported a growth of 6% on quarter-on-quarter in terms of average per day toll collection for the quarter.User reported in the cases of -- during the second COVID has led a travel restriction being affected again and corresponding reduction in the traffic and collection by almost 20% to 25% across the project. These are targeted lockdowns to restrict the mass gathering and contain the spread with the least impact on the economic activity and thus sustaining the livelihood for the population at large. Parallelly, the vaccination drive continues at a strong pace in the country and is expected to be a key factor for a stronger rebound in the economic activity as the lockdown relaxed in wake of -- the reduced new COVID cases being reported mostly by June '21.Accordingly, various reputed global agencies are continuing with their forecast for their India GDP in high single-digit for FY '22, which could correspondingly reflect in the traffic growth for our project. Effective from April 1, '21, tariff has been revised by 3.8% across the NHI projects and the rising inflation would improve this number for the subsequent year as well.We thus expect the robust growth in the toll collection for ensuing year. Construction and tolling workers has been classified as a front-line worker now and are being vaccinated on priority. Accordingly, we thus facilitate a vaccination of 3,000 of our employees that's deployed across various sites and drive continues. This means that our -- almost 50% of staff strength is already vaccinated.Pandemic has pushed back the construction activity causing some delay in completion. We have reassessed the state of project and expect to complete all under construction project within extension of time provided by NHI.In FY '22 will see the completion of the project one after another, starting with U.S. BOT soon. Total outstanding order is INR 14,500 crores. With this, I would like to hand over to Mr. Tushar Kawedia to take through you -- take you through the financial analysis before Q&A. Over to you, Tushar.
Thank you, sir. I'll present the financial analysis for Q4 FY '21 versus Q4 FY '20. The total consolidated income for Q4 FY '21 has increased to INR 1,650 crores from INR 1,635 crores from Q4 FY '20, registering a growth of 1%. The consolidated toll revenue for Q4 FY '21 has increased to INR 465 crores from INR 354 crores from Q4 FY '20 increased by 31%. The consolidated construction revenues for Q4 FY '21 has decreased to INR 1,141 crores from INR 1,230 crores in Q4 FY '20, registering a decline of 7%.EBITDA for Q4 FY '21 increased to INR 805 crores from INR 705 crores in Q4 FY '20, registering a growth of 14%. Interest cost has increased to INR 451 crores in Q4 FY '21 from INR 410 crores in Q4 FY '20. Depreciation has increased to INR 177 crores in Q4 FY '21 from INR 105 crores in Q4 FY '20.PBT has decreased to INR 176 crores in Q4 FY '21 from INR 247 crores in Q4 FY '20, registering a decline of 29%. PAT after share of loss from joint ventures has decreased to INR 97 crores in Q4 FY '21 from INR 154 crores in Q4 FY '20, registering a decline of 37%. Earnings per share on basic and diluted basis, excluding extraordinary income, is at 2.77% for Q4 FY '21.I would now present the financial analysis for full year FY '21 versus FY '20. The total consolidated income for FY '21 stood at INR 5,488 crores as against INR 7,047 crores in FY '20, registering a decline of 22%. The consolidated toll revenues for FY '21 has decreased to INR 1,559 crores from INR 1,723 crores in FY '20. The consolidated construction revenues for FY '21 has decreased to INR 3,739 crores as against INR 5,129 crores in FY '20, registering a decline of 27%.EBITDA for FY '21 decreased to INR 2,702 crores from INR 3,166 crores in FY '20, registering a decline of 15%. Now I request moderator to open the session for question and answers.
[Operator Instructions] The first question is from the line of Mohit Kumar from DAM Capital.
2 questions. Sir, how is the toll revenues stearing in April and May? Have you seen any kind of drop in traffic compared to March? And secondly, on the EPC revenues, of course, it was slightly soft year for us. How do you see, given that we have won now a couple of contracts, how do you see FY '22? Do you think that will impact the FY '20 numbers as far as EPC revenues are concerned?
So Mohit, on your first question about toll revenue in the month of April, May, we have seen the impact of second wave on our toll collections in most of the projects, and that is ranging in the range of 15% to 20%, depending on the geographical location of the project. On your question, on the construction revenue, we -- as you rightly mentioned that we should be able to reach to the FY '20 numbers, considering the 2 of the projects which we have recently backed in the month of March will start contributing to the construction revenue for FY '22.With that, we should be able to reach to our construction revenue, which we have seen in the FY '20.
Next question, do we have the -- when do you expect the appointed date for all the projects which you have won in the H2 FY '21?
We expect the appointed date in 25, 30 days time.
Both -- for both the projects?
No, for the VM7. And the other projects will take until September.
The next question is from the line of Rakesh Vyas from HDFC Mutual Funds.
Yes, this is Rakesh Vyas. So a few questions from my side. One, on the console debt number, can you just break this number between the private InvIT Mumbai-Pune and the other projects and the stand-alone corporate debt?
Yes. With respect to the private InvIT. Private InvIT is not consolidated with IRP. With regard to the segmentation of the debt, roughly INR 5,900 crores is on Mumbai-Pune, INR 3,000 crores debt is on Ahmedabad-Vadodara, to be very precise INR 3,100 crores. And VK1, we have approximately INR 800 crores of debt.On the parent company debt, basically, excluding OD, it will be roughly INR 5,400 crores. And modern road makers, working capital facility, we have roughly INR 700 crores.And overdraft, which is backed by FD will be close to INR 900 crores.
Got it. Also, sir, if you can just highlight the cost overrun in the private InvIT for which the subject has been given by IRB. So when do we expect this money to be returned back to us? Where are we in the process with NHI or authorities in general?
So basically, with respect to the amount which is receivable from the private trust, and we will be paid off once private trust receive it from the NHI and private trust as and when the projects are getting completed are filing claims with the NHI. Typically, as the process goes basically, if the claims is settled within in consolation. So typically, we will receive within 1 year. But if it goes in arbitration, that will take 1 to 2 years' time. And in fact, in terms of building our business model, we have not factored cash flow coming from this claim amount. And whatever the amount will be released within 1 or 2 years. That will be the surplus. And as I explained in my initial commentary that in terms of the repayment of IRB debt also, 90% of the debt is due beyond '23. And just to share with you a repayment of Mumbai-Pune, this year, we will be repaying close to INR 1.5 billion. And next year, we will be repaying close to INR 4 billion. Ahmedabad-Vadodara, also, the repayment is close to INR 1 billion in this year and close to INR 1.6 billion in next financial year. So there is no substantial repayment for the company in terms of repayment of either the projected or basically corporate debt, and project debt can be easily met out of the project cash flows.
Sure. And sir, on the expected order inflow, what number are you targeting? Because we are now seeing -- despite this increase in the order inflow in FY '21, we are still seeing the order book to sales ratio getting a bit stressed. So I was just wondering as to how we intend to keep that FY '20 construction revenue expectation and what is the kind of order inflow that we expect this year? Because whatever we win this year may not contribute to the construction revenue in FY '22?
Yes. Good Morning. Mhaiskar this side. So I would like to say here that last whole year, in terms of order award, it was primarily a wash out. The order awards picked up only around December last year. And till March, NHI has tried their best to put out as many projects that they could. They have a ready order book right now, which they will be -- a good pipeline, which will be getting tendered out in this full year.So my sense is that you are right, the order book depletion and the order book addition has to be very closely watched, and we are very much clued on that aspect. As you see, we have backed 2 projects end of the financial year. And those will be made to go under construction by end of September.So in terms of HAM projects, what we have seen is achieving financial closure is pretty fast. So the turnaround time from order wins to making the project go under construction will not be that long. So even if we win, say, till September this year, another INR 5-odd thousand crores of projects. Those projects can begin by fourth quarter of this year.So we have good visibility in terms of execution for this full year, plus half of next year.And by September this year, if we win another INR 5,000 crores, INR 7,000 crores of orders, then the continuity and our gradual growth can be very well ensured. So that is the focus with which we would be working on.
Great, sir. I have 1 last question before I move back into queue. Sir, this dollar bond, have we hedged it and what is the effective rate for us after hedging?
Yes. Tushar, do you want to go for it?
Sir, with respect to the dollar bond, it's a fully hedged, and the cost is 9.97%.
The next question is from the line of Teena Virmani from Kotak Securities.
My question is regarding the debt reduction plan, and I'll let you specify for Mumbai-Pune and for Ahmedabad-Vadodara. Apart from this INR 1,600 crores amount that you mentioned that has been used for this short-term -- prepayment of short-term debt, is there any further reduction plan for the parent company, for IRB?
My sense is INR 265 crores of debt will get prepaid in this year. And next year, another INR 300 crores to INR 400 crores. And most of the debt, as Anil very clearly mentioned, was due for repayment beyond '23.
Okay. So this INR 265 crores is over and above that INR 1,500 crores, which has been prepaid.
Yes, yes. Yes. Those are the scheduled repayments, which are already being serviced accordingly.
Okay. So what is the stand-alone debt as of now on the book for the core EPC arm net debt number?
Net debt number, as Anil mentioned, is INR 5,400 crore INR. Right, Anil?
Sir, that's a gross number, net number will be close to INR 4,000 crores.
Okay. Okay. And regarding your investments planned for the existing under construction projects and the new projects, what will be the schedule of equity investments for the existing portfolio?
Equity investment for existing portfolio will be roughly, including the private trust and the project, which we have recently backed, will be close to INR 5 billion in this year, roughly INR 2 billion in FY '23 and roughly INR 2.5 billion in FY '24. So that will translate close to INR 9.5 billion total investment.
And this includes the recently awarded projects also?
This includes the Dhanpunji project and the Himachal Pradesh HAM project as well.
And the VM7 also?
Yes, VM7. VM7 we have already included a substantial equity, I think, close to INR 1 billion, less than INR 1 billion equity spending. Sorry, VK1. VN7, the equity left out will be around INR 2.5 billion.
Okay. But that's part of this plan of 5, 2 and 2.5?
Yes.
That's included in this?
Yes.
The next question is from the line of Prem Khurana from Anand Rathi.
Sir, to begin with, possible to share as in what is the land status on the 2 new projects that you've been able to manage now because I think whether you'll be able to -- why I ask this is essentially because, I mean, whether you would be able to book numbers on these 2 projects would depend on whether we'll get to have appointed it by -- I mean, in this year, it's -- as -- so when I see VM7, it has taken us slightly longer than our earlier expectation. So if you could help us with the land status here, sir, for the 2 new ones?
VM7, it has taken a little longer, but the issues across that particular whole Baroda-Mumbai Expressway are resolved to date. So the other package will not take longer. And as far as Himachal and Bengal are concerned, the acquisition status is pretty good. And in that, particularly, if you see Bengal project, it is a 4 to 6 land project, so not much land acquisition is involved anyway. So we don't expect delays in terms of execution for these 2 projects beyond October.
Sure. Okay. And Tushar sir, would it be possible to kind of break your order backlog down into? And how much of it is essentially hybrid annuity and how much is BOT? And also if you could clarify, I mean, if there was any adjustment in the order backlog this quarter because when I look at the numbers and compare with last quarter, the change works out to be almost on INR 33-odd billion, which is what we've managed in terms of new orders, but I mean essentially since we've executed part of our order backlog, then the gross addition also will be almost on INR 43-odd billion. So if you could clarify on one, the change in the order backlog? And also, I mean, if you could help us with the split in terms of how much of it is essentially hybrid and within how much is BOT?
In terms of the split of the order book, basically, December '20, we had an order book of INR 4,400 crore. And out of that, we have executed INR 750 crores. And balanced execution in this quarter was O&M and change of scope and utility shifting. And if I will reduce INR 750 crores from INR 4,400 crores, the balance order book as on -- out of the December order book was INR 3,650 crores, New order, we have bagged roughly INR 3,300 crores. And the CoS work, which is added every year, we execute this CoS work, that is also -- we have added CoS work in our order book. Then outstanding order book as on March 31, CoS work is around INR 800 crores and EPC order book balance as on March 31, '21 is INR 7,750 crores.
Sure. And how would the split be between hybrids and the BOTs?
We will come back with that number shortly.
And just one small clarification on this. I mean, we've been getting the CoS on a regular basis now. So fair to assume that you'll have this on a regular basis, even in FY '22 and '23.
Yes. So basically, in last 3 years, the company has done a CoS work of INR 450 crores to INR 500 crores on a per annum basis. Till December '20, we have not included CoS order as a part of order book. And when CoS work gets executed and forms part of the revenue, this leads to a reconciliation to order book. And to avoid such situation in future, we have assessed the CoS work and included same as a part of order book close to INR 8 billion.
And with respect to your question on the HAM and the BOT split, the HAM order book would be around INR 3,000 crores and balance towards BOT.
The next question is from the line of Vibhor Singhal from PhillipCapital.
Yes. Tushar, just 1 clarification. You mentioned that the COVID -- the impact of COVID in second wave, in which toll collection is around 15% to 20%. So we're talking about toll collection right now being 15% to 20% lower than what it was in March. Am I right in getting that?
This was in comparison of the fourth quarter.
As of fourth quarter. So because this March, where would be the probably, let's say, at this point of time?
I didn't get your question. Can you repeat?
Versus March 2021, where would the current toll collection be, if I were to look at the average daily toll collection.
Yes. So basically, in terms of the -- as compared to the last year. Last year, the collection in the March was hardly 30% to 40%. And this year, as Tushar has explained that initially in April month, it was basically around 15%, 20%, and May, it has increased to around 25%. So basically as compared with the last year, the collection is far better, if I will compare the same month of the last year.
So I would put it this way that if I were to compare first quarter of last year, it will still be showing a growth. But if I were to compare Q-on-Q, there will be a 25% debt. I mean, if I'm looking at the 2 months April and May, considering the lockdowns.
Okay. In the 2 months, we probably see around 25% Q-on-Q?
So I'm saying you already have the numbers for Q4 project-wise. So those project-wise numbers, we'll see a decline of 20% to 25% in first quarter because of lockdowns. But they will still be much higher than the year-on-year numbers if you compare it in that part.
Fair enough. That's expensive. And what is the gross consolidated debt right now at the end of March rupees?
It's INR 16,700 crores. And...
INR 16,700 crores?
Yes. And net debt will be close to INR 13,700 crores.
Right, sir. And sir, you mentioned that at the parent level, the debt is about INR 5-plus thousand crores, MRM is INR 700 crores and overdraft is around INR 900 crores. So put together, it comes out to be around INR 7,000 crores of debt, which is the non-SPV debt.
Yes, and plus cash balance of INR 2,651 crore.
Fair enough. So sir, what is the outlook on the INR 7,000 crores of non-SPV debt, or given that we have equity requirements coming in for the new HAM projects and BOT projects. And the cash flow from Ahmedabad-Vadodara and Mumbai-Pune would be sufficient for their on debt repayment, and there might be some surplus.over it. What could this INR 7,000 crore number look like over the next year or so, maybe do you expect it to increase because of the equity requirement? Or will we be using BOT at current level?
Equity requirement will be met out of the cash available with the company. And debt, basically, OD, we should not consider it as debt because that will be backed by FD. Now the company have INR 5,400 crore of debt. And out of that, only 10% is payable in next couple of years. So there also, the repayment is very thin. And in terms of the INR 700 crores of working capital limit for the Modern Road Makers, it's the kind of working capital and that continues years together. There is no repayment for the Modern Road Makers.
Right. So we should be able -- so let me -- if I review the OD part INR 5,000 crores debt, we are supposed to save only 10% of it. So even if you take more, I think we should be able to maintain that current status next year?
Yes, that's right.
And one more point is this debt can be unwound on a self-sustaining basis given the fact that most of the CapEx is coming to an end. And the large projects have well stabilized and are now generating positive cash flows, in case in point, Mumbai-Pune. So unwinding of this date gradually should not be a challenge to my mind.
The next question is from the line of Parikshit from HDFC.
Congratulations on the set of numbers. So my first question -- yes, so the question is on, you said that there is a drop of 25% in collection, April and May month. So have we filed -- have we moved the post-measure circular with NHI yet reprieve on the shortfall?
So Parikshit, as a process, wherever the collection is dipped below 90%, we are just filing the claim as per the post-measure circular announced last year.
So the expectation is like what NHI the kind of package that had given for the last year's COVID wave 1. Do you expect that in a similar line, we'll get some extension. Like last year, we got 3 to 6 months kind of extension and a threshold of collection each in the threshold of 90%. So do you think the similar kind of release can be extended this time also?
Yes. So when we say that minimum 90 days and maximum 180 days, that is still eligible for us with that circular. So the impact is still going on due to the state-wide lockdown. We'll be filing our claims under that announcement -- on this lockdown being announced in the states.
I think my metrics in the contract is very clear that whenever the revenue falls below 90% due to any of the post-measure event, then the calculation, I mean, the loss to that extent has to be covered. So ultimately, when -- as an interim relief, they have talked about 3 to 6 months of extension, as Tushar mentioned. So ultimately, after the first wave, second wave, third wave, these are events which will play out over the next 20 years.So once this is crystallized, they will give and notify the final extension project wise, whatever they intend to give. But to give a visibility to the sector, they have already said 3 to 6 months. In case if the 90% -- if the revenues remain below 90%, then whatever is the exact calculation that will have to be submitted and once the total impact is calculated, the final number will be arrived. But the mechanism in the contract is very, very robust and very clear in terms of working and arriving at the desired extension.
And even on the under construction projects, you were EOR for similar amounts for...
We have already received that.
Okay. So you may get some inflation benefits on account of that on HAM projects?
Yes. Yes.
Okay. Okay. Sir, my second question was, last year, we did manage to get. I mean, despite this dismal bidding on the BOT side, so we've been able to get one package one project. So how do you see the pipeline this year? Do you think that the share of BOT will go up this year, given the encouraging -- so whatever small amount have been happened last year, there was a decent response from the developer side. Do you think that NHI will come up with more projects this year at least?
Yes. So we did an analysis of all the projects that were awarded in the last financial year. And our market share in spite of stiff competition, as you very correctly said, was still at around 5.5% of the total orders awarded by NHI across BOT and HAM project. So -- and including TOT, actually. So if I look at this year, they have talked about a very good number of 4,500 kilometers that they intend to bid out. So if that happens, even we stain the 5% to 7% margin -- market share, that itself can resolve our order book issue to a great extent.
Okay. So now coming to TOT, sir. So I think, earlier, I think, Tushar did mention on the media and trucks about the TOT. So how do you see the TOT thing panning out? And what kind of opportunities you can play there and touch upon that as well?
See, I think they are increasingly reducing the size of TOT projects, making it much more bankable. So it's an interesting opportunity, and each project has to be studied in isolation to my mind because each project can have different challenges, each package can have a different challenge. But on a smaller size of TOT project, it makes definitely a very compelling proposition to participate.
But how do you look at funding it? So is it like to the private InvIT route or you will do it through the IRB stand-alone only? So how will...
Depends on the size and the overall investment requirement, it's a very small project, not requiring a massive investment. It can certainly be handled at IRB stand-alone as well.
Okay. Just on the margins on now. So last year, we had seen some increase, very heightened competitive intensity, the EPC and more number of bidders coming in HAM. So just your views on the scenario of heightened competition in HAM to view on margin on HAM projects? And given the commodity prices, which are there, so how do you see the margins in these 2 segments playing out for you in this financial year? EPC margins.
Yes. So certainly, the margins have been under pressure across the sector because of massive participation. But if you look at end of FY '21, most players have a robust visibility on order book now. No doubt, nobody has an order book visibility of more than 2 years because the construction period itself is 2 years. But the order continuity is there, and that's the reason why we are always more comfortable doing the BOT project, which is around 2.5 years and the competitive intensity being less on that part of the story.So we will keep balancing our order book wins on BOT and then having that sequence of preference. But my sense is that this competitive intensity should reduce this year because the earlier one projects also need to be executed. And the aggressiveness that has been shown when it's put to execution will have challenges, and most people will learn from their mistakes and the intensity should go down that historically, what I have seen in the last 25 years.
Right. Sir, on the EPC guidance for revenues and margins, any guidance on margins and revenue or growth for next year -- for FY '22, if you can provide some sense there.
So Parikshit, basically, we don't provide any kind of guidance in terms of basically next financial year. But order book, what we are having roughly INR 7,700 crores, that will get executed over the period of next 2 years. And that itself will result around 20%, 25% kind of uptick in the construction revenue. And basically, overall revenue on the backdrop of the BOT revenue will be also increasing in this financial year. And both together, the BOT and construction both put together, I think 20%, 25% kind of jump in the revenue, we should expect from the current order book and also in terms of the toll collection on backdrop of the -- on backdrop of the healthy collection, what we have witnessed in Q3 and Q4 of FY '21.And we believe that post this travel restriction is basically lifted, then there should be a spot in the toll collection as we witnessed in last year.
Okay. Just -- and on the margin side, sir, just on the margin -- EBITDA margin?
EBITDA margin, basically considering the mix of the BOT and construction, should remain in the range of 45% to 48%.
And EPC will be about 25%, 27%?
Yes, I think around 25% -- 24%, 25% considering the mix of HAM and BOT.
Right. And just last thing, sir, besides the road segment, are we looking at opportunities in other mobility projects like railways, privatization or state BOT like Ganga Expressway or water HAM, sir. if you can touch upon these segments, some of the non-road segments, if there is any potential strategies been working towards growing or expanding the portfolio there?And given that there has been a low awarding in the BOT toll project. So if you can just touch upon that.
So I think BOT projects in UP, SRDP, they are -- [indiscernible] has come with 5 of BOT projects. And those we'll be looking at, and they're expecting some BOT projects this year, that HAM will be looking at. And other projects, which you talk about, we can see case by case. And if it suits us, we'll go ahead with that.
Okay. And something like a station redevelopment like CSMT station redevelopment or maybe a station redevelopment or those kind of opportunities, which have an associated bit of the component...
Yes. We will evaluate those, but the focus will certainly be on highways rather than getting digressed into anything noncore.
And any -- last thing, sir, any plans on monetization of the land bank across the Mumbai-Pune Expressway, any plans there?
Not yet.
The next question is from the line of Jiten Rushi from Axis Capital.
So my first question is on the execution EPC execution in Q1. So what kind of decline we have seen over Q4 in terms of labor availability and the pre-execution run rate?
So as far as labor availability, I think the challenge which we faced last year due to nationwide lockdown and the migration of labor, that is, I think, it has been overcome, and we have our employees stationed at the sites only. So that part has been taken care. And our execution is on the pace, what we have seen in the Q3 and Q4 of this last financial year.
So basically, we have not seen any labor attrition in April and May. You can say that?
No, I wouldn't say that there would be some reduction, but it is well under control where the execution is not marked, is how I will put it.
Okay, sir. And sir, on the traffic growth, so what was the traffic growth for the full year FY '21 in Q4? And what is our expectation for FY '22? And what was the decline in traffic growth so far in Q1 FY '22?
So as we mentioned earlier in the call, as far as Q1 compared with this year, Q1 of FY '22, we will be -- the numbers would be higher as it was quite down for the last year due to the nationwide lockdown. Whereas from the traffic growth assumption, we -- in sequential basis, the Mumbai-Pune project has achieved 6% growth from -- in Q4 as compared to Q3. So once this normalcy comes back, we should be able to see similar kind of growth in coming quarters.
So just to add to what was said, if we see the whole of 2021 as you were wanting to understand, I would say, till end of September, we had reached the pre-COVID level. December, we saw year-on-year growth where it was spread might be due to pent-up demand. But that proved to be wrong and the growth continued to be strong in Q4 as well. And in certain projects, we have seen 6-odd percent of year-on-year growth in Q4. And as we mentioned, first quarter of this financial year might see, again, a dip of 20%, 25% due to the lockdown pertaining to the second wave, but it would still be a growth compared to Q1 of 2021.
So basically, Q1, we can see a 30%, 35% decline in traffic growth. But overall, we expect 5% growth in FY '22 overall, what I can say. Right, sir?
Yes. Right.
And sir, and one last question, sir. Equity investment, as was said. So what has already been done and invested so far in the HAM project?
So in terms of the HAM project, VK1, we have already included equity investment of close to INR 200 crores.
Got it. And now we are -- additional value to invest 950 crores, right?
For the HAM, BOT, including the recent 2 project win. Yes.
The last question is from the line of Arun Kejriwal Kejriwal Research.
This question is for Mr. Mhaiskar. Just wanted to understand, we have an InvIT now coming from NHI. Your take on what this would mean for the InvIT sector? And could this open up more InvIT coming, make it more competitive environment or how?
So yes, it's a very interesting space that we are also watching with our clients coming into the InvIT space as I would put it. And I think that will -- that, to my mind, is a very interesting construct because what happens is, right now, we are dealing with investors. And whatever challenges and problems we face on projects, we keep dealing with them in our own way and try to ensure the investors don't have any losses, and we create value for the investors.Now NHI is getting into that same role. So they will understand our pain points in a more better way. And that will pave way in solving the problems that we face, now that they are putting themselves into the same shoes is how I'll put it.
Okay. So considering this factor. And if you remember that we had a lot of foreign investors who had also put money into various projects, buying blocks that were offered earlier. Can this actually mean that road development in India can take a quantum leap, maybe in the next year, maybe in the next 2 years down the line?
See, the order pipeline at NHI is already are very robust, one, and they have been unfolding it. Now it actually will establish an accountability towards ensuring returns to the investors. And NHI is actually getting into that role now, to my mind, where they have to ensure returns to the investors because the investors will be investing into NHI InvIT with a clear objective of getting returns.So when they have to ensure returns to the investors, they will have to realize and they will also have to ensure that their projects do well. They are able to generate cash flows, they are able to pay out the monies to their investors. So they will also feel the heat when projects remain close for 5 months, 6 months together for farmer protest. And they will also help to answer all the questions what we are answering you guys.
Thank you. I would now like to hand the conference over to Mr. Sudhir Hoshing for closing comments.
We would like to thank all the analysts and investors on the call. We look forward to host you on the next call as well. Happy weekend. Thank you.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. We thank you for your participation and for using research wide conferencing services. You may please disconnect your lines now. Thank you, and have a great day.