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Mishra Dhatu Nigam Ltd
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Good afternoon, good evening to all the participants joining in for Q1 FY '21 results conference call of Mishra Dhatu Nigam Limited. We have with us Dr. S. K. Jha, CMD of MIDHANI. Without further ado, over to you, Dr. Jha, for your opening remarks.
Yes. Good afternoon and a hearty welcome to all the investors, stakeholders. I'm pleased to have you all in today's conference call. First of all, I'd just like to introduce about the situation, introduce about the status of the company or the -- today's status. After a lockdown of 45 days and so, when your company has started, it was challenging for us to come to the full level of operation. As you know, this company is process-based where no process can run in isolation. We have the support of various operating equipment, operating spaces, operating people of different areas. It requires a minimum level of team, which can contribute, then only the company can start. So initial phase, we have come for the trial for the entire high-pressure line, gas line, fuel line, electricity, everything should be checked. So it takes a few more days, I'll say, around 15 days more to restart our equipment. And when we have come for the operation, we found there's a lot of hardship with our employees who have to come and contribute and work with us. So slowly, we have increased the working hours after a reduction of their working hours to come to the full level. But I can tell you the type of resilience, type of cooperation we have received from the MIDHANI employees is tremendous, and that was the fundamental reason to bring back this company into the operation to the full scale by the end of month May. And then we started our normal activities. So in the first quarter, we have achieved the total sales of INR 113 crores. Of course, almost 2 months, since we are not producing, so our level of production has come down significantly, and this can be a reflection in our -- the performance in terms of the PAT, you can see that we have a slightly small loss of around INR 92 lakhs, which have been reported for quarter 1 of this financial year. But then in quarter 2, with our -- even though there were few cases of COVID-19 in our company, with proper support from our HR team, entire team of operation people, doctors, finance, entire MIDHANI team has come forward and could able to solve this problem. And I can tell you today, our employees, they are in very good healthy condition. Our attendance is more than 80%, 85%. And we are able to operate 24/7 round the clock, services are also running smoothly. And that is why we have come to the full scale of production. This is regarding the operation. The journey has been very -- quite tough during this period. As you know that our customer -- major -- one of our major customers is ISRO. Similar to us, they also had problem in their operation level. And we could realize that a lot of -- even the material movements and financial support or getting the -- our dues got delayed. So we have to also take the -- some of the measures to control our financial activities also. But again, due to our wisdom, I can say, and proper financial management, company has not defaulted. And we have given the payment to our -- salaries to our employees, to our -- even the contract labors for lockdown period. All mandatory requirements for the payments, we have met, including MSMEs. So on that front, also, we have performed well, and now we are absolutely on the right track. And as I told that operations have normalized now. So we are now moving in the right track. And we are estimating that even our -- and as per the -- even our target from the ministry also, whatever we have performed the last year, we have to at least go beyond 20 to -- 20% extra. So with that mission and directive, company is operating. And we are in the right track. I can also tell few highlights of this last year, which is already -- it has come in our annual report. But I would like to talk something about the -- first, about the product -- new product development. During this COVID, I think last -- in fact already, I have briefed about that how we have taken care some of the critical components during the lockdown period to meet the critical care ventilation, ventilator requirements. But on the front, on -- during that period also, some of our technological developments has given a very good leverage for this company. And with Atmanirbhar Bharat and going for the self-lines in the materials, raw materials, MIDHANI has a fair chance to get a very good foothold in the area of defense and aerospace sectors. It is the reflection, the -- more and more requirements are going to come in the coming days, already has started. But as the government -- as things are getting normalized and the defense projects are getting sanctioned, which already you might have seen in the media that the next 5 years, after declaring 101 import items in negative list, it is possible the India industry will see a CapEx infusion of -- or even the procurement from the defense side in the tune of INR 4 lakhs crores to INR 5 lakhs crores. Definitely, we expect with our presence, long presence in defense, aerospace, MIDHANI has a very important role to play in terms of developing the materials already we are producing and in terms of developing the new technologies, new materials, new components. And this is a challenge for this company today. And as the investor, as a stakeholder, you must be aware that we are having 2, 3 projects, which we have to complete and then get the sales revenue from that. And I would -- happy to say that in that area also, during the lockdown, post lockdown, the activity on the project side have been very effective with our -- lot of persuasions from our MIDHANI team, with our supplier, we could get very good response. And all our projects are running smoothly. And I am sure that by the time of winter in the last quarter of this financial year, you will find that a lot of projects will get matured and we will be coming to -- we'll be getting the revenue realization of the sales from that respective projects. This is on the front of the projects. On technology side, you know that this is a technology-driven company, and we need very less time in developing a new material, new grids of steel, new grid of titanium alloys. So this is an ongoing process where some of the latest technology, running a job very smoothly for which we'll be doing a good business in the near future for different sector and type of materials, we can -- I cannot tell in this forum, but I can tell you they are very unique in their production, in the technology. So overall, what -- I want to reflect that the company is maintaining its credentials as far as the R&D, technology and converting the technology or products into the sales is there. We are also trying to enter in the international market, export. Of course, the market is very dull today. Still, our marketing team has not left it. In fact, we have exported a reasonably good amount, almost 50% of the export, what I did in the last year, financial '19, '20 too, already we have achieved. And our target this year is to almost double the export what we did in '19/'20. These are the different areas where people are working. And we are seeing a lot of changes. But as the time progress, I think we'll have more and more bigger opportunity to come in our fold, especially in the armor area, as I say, there are a lot of opportunity since our armor plant also is coming very fast. And you will see that they are also will start producing the armor products. So these are a few highlights for this company. So now I let it to -- the platform open for discussion. Thank you.
[Operator Instructions] First question is from the line of [ Deepak Mehta ], an individual investor.
So my question is related with the new defense, this body armor, which -- so what is the estimated sales for our defense forces? Any ballpark number for this product category?
Yes. You're talking about the bulletproof jacket?
Yes, bulletproof jacket, sir.
Jacket, yes. This -- in fact, I'll just give a background of this particular product. This product is unique in nature. We are producing the first time in India, where the technology has been developed in Bhabha Atomic Research Centre, BARC, Department of Atomic Energy. And that technology has been transferred to Mishra Dhatu Nigam. And it took some time for us to establish the product because a technology coming from labs and going to the industrial scale, a lot of trial and equipment, process optimizations are required. So we have gone through the entire process of certification and approval of this product. And any product going in the defense application, it has to go for a number of trials. And especially in bulletproof jackets, the trial is -- testing trial is very difficult because you have to fire the bullet. And the bullet firing establishment in India is -- today, it's at only at 2 places. One is at Gujarat Forensic University. And another one is TBRL at Chandigarh. So there, we have done a lot of trials and we got certified for this. Currently, we have received around 300 numbers, if I remember exactly, bulletproof jackets we have to supply. And we expect that -- and this -- the requirement has come mainly from paramilitary forces. And once the product will be also used by -- will go for application in the military, the numbers are going to multiply. So we expect that the annual requirements today, projected one is around 30,000 to 40,000 per annum. But how much we are able to produce from that, that is another question mark. But I expect after maturity of this project, that these numbers, at least 10% to 20% of market space, we will cover, we may occupy. And being the premium products, it is possible that numbers will increase afterwards.
And my next and last question is that government, as you know, the government of India has decided to increase the limit up to 75% for defense sector. So is there any talk for divestment or any strategic partnership with any international defense player, where we can grow by the technology counts for anything like this, sir?
Yes. In fact, most of the technology transfer if you find really mainly coming in the area of making a military platform. Military platform by -- I mean that either in area of making the war ships or coming from the arms, ammunition, tanks. So in those areas, in fact, the technology transfer and OEM will come and they'll participate. We are basically a raw material supplier. So once that type of tie-up is there, as you said that FDI coming 74% through that route. Then MIDHANI also has an opportunity to grab that as far as the raw material part of supply is concerned. But directly, if you ask me, we are not in this front that we can get the material. For material technologies, we feel that our knowledge and our know-how is self-sufficient. What we need, that -- only certification, that if some raw material is made in certain countries like, let's say, in the Germany or France or U.S., that grade of material, if they give the know-how that, okay, these materials has to be made at such and such type of chemistry, such type of properties, we can definitely produce in India, and we have done also. So we have -- in direct form, we have the opportunity to get the -- enter in that area because of this FDI. And FDI also will come unless India declares that the items are going on the negative import list. If you declare that certain items I'm not going to import from any countries, then any country who is having technology and they have their spare capacity or they feel that they can have the good business, they will try to come to your place, and they'll invest here. And that is where, in that place, MIDHANI has the opportunity to participate.
[Operator Instructions] The next question is from Abhijit Mitra from ICICI Securities.
So we have 2 questions, actually. First is what is the final MoU target with the ministry that we have settled at? And if you can give a broad expectation of how is that expected to be broken up in the space and defense. I mean, what are your expected executions for space and defense for this particular year?
MoU targets, it has not been finalized yet, but in the draft, this is -- I can tell you, we have 775, say around 800 rate is there. So last year, we made 712. That's why I said our target is going to be around 10% to 15% higher than whatever we have achieved in '19/'20, and which we have started with that, only we started. So MoU target has been fixed on that. Now coming to that, in what will be the space and defense. So this year, defense is going to increase, and it may overtake space also. I'll say, defense may go to the level of 60 or maybe 55. So it will look like defense has picked up, department in defense has picked up this year. And space will be slightly on the lower side. Even though we have the other position, if you see our orders, we have more than 60% space order only. But still I will say that we have to meet some of the urgent requirement of defense projects, which are on the critical path. So we have to first focus on the materials which are required for the defense applications. It's going to increase in distribution in that, yes.
Right. And the other questions that we have been facing for the last 2 to 3 years, we are seeing your volumes declining as your extent of valuation is increasing, both in terms of realization per tonne, EBITDA per tonne, there is a sharp uptick while volumes seem to be on the down trend each year. Can this trend be sort of reversed or there is more space applications essentially means more value addition and, hence, their lower volumes? How to look at this trend?
One thing is very clear, as long as we are serving -- see now, if you see our -- first, let's talk about the ISRO. So ISRO also we are serving as a [indiscernible] area, very little materials are there. So there, you will not find high volume. Again, coming to defense also, if you see our product profile going in the defense applications, they're also more or less in similar type of materials, which are very niche in their production or quality and the product performance. So there, that -- both segments are more or less similar way. Other part, third area is that in defense also, there are some certain sectors wherein with a high volume and cost is low. That order, maybe it will be less, I think, in this year also. What we are going to see that mostly, we are going to serve the very -- like quality materials only. So there, we need -- but only volume will be less and the value addition will be on the high side. So that trend is going to continue for some time. Unless -- and we diversify in the different areas. Let's say, if I diversify in mining, I diversify in railways, I diversify in the oil and gas. So there, you'll find that the volume will be increasing. That part I am seeing. There, visibility are there, but unless we -- first, we have to serve these sectors where we are having a lot of orders are there and requirements are coming.
Next question is from Bhagyesh from HDFC Mutual Fund.
Sir, can you brief us on the DRDO funded -- I mean, the plate mill project, where it is and when we'll start getting the revenues for next 1 or 2 years?
DRDL project is basically funded by 2 organizations. One is that DRDO, another is from [ OFD, armors factory ]. So it has phase 1 /phase 2 type of combination. Both phases are coming together. Plant capacity is 30,000 tonnes and product mix going to be special steels, titanium alloys, superalloys and some of the armor steel. These are the 4, 5 different categories of product mix. Now based on the requirements from these grades, either from the domestic sector or from the export area, our capacity will be utilized. That is a part of this the business is concerned. As far as the projects coming up and its progress, I'll tell you now today also -- even -- that's why I said in my opening remarks itself that even during the lockdown also after 45 days or, say, 50 days, people have started doing activities on the project side. Today, I can say that on 90% or 98% material is in place now. We have all everything in place, direction, commissioning is going on the full swing. And I'm pretty sure that by March and/or -- we can go for initial trials, not go for full commissioning, but initial prices will start from the March '21. Our idea is to start getting business from next financial year. That will be every -- like depending on the how much orders -- there are some -- a lot of indications that are coming from the market that certain grades are required and whether MIDHANI equipment will be useful. One more thing I'll add here, which already has been explained time and again. This project is totally funded, and it was not meant earlier for a commercial viability. But given the market scenario, we want to fully convert into the -- in this -- in the -- as a commercial unit. And there is visibility now. We have good visibility now based on this thing.
Okay, visibility is good.
And it's a unique mill because no other mill in India will have a capacity or type of product diversification as this mill is having. So that will be one of the biggest advantage for us to take the leverage of its uniqueness and position ourselves in the domestic and international market both.
Okay. So next 2, 3 years, revenues will come from this. Next full year onwards, we'll get revenues from this mill?
Yes, yes, definitely. This has revenues potential. I cannot commit what will be the value, but it is going to.
Okay. Okay. Sir, and next year, our revenue mix, [indiscernible] we'll restart the projects and et cetera. So phase 1 again will be prominent, so will be defense.
Yes. You said next year revenue?
Next year revenue. This year, you're talking about ballpark INR 775 crores to INR 800 crores. So next year...
I'll tell you that situation, we'll be interacting again. But definitely, as per the plan, things are going in the right direction, we'll have a much bigger role to play and targets will be also stiffer, and all is stiffer. No problem, that will be there. But right now, we cannot say that what will be the projections because what we are concerned this year because already we have -- see, even though we say 45 days lockdown, but it is almost a quarter loss. First quarter loss is there for the company. So 3 quarters production and exceeding the last year target of all -- so it's a big challenge. This year has been a big challenge, I'll say. This year if we are going to achieve, then next year, surely no problem. Our graph will be definitely go up.
[Operator Instructions] Next question is from Rita Tahilramani from Invesco Mutual Fund.
Sir, an extension to the previous question. For the wide plate mill, the contribution from MIDHANI was expected to be somewhere around INR 40 crores, INR 50 crores, right?
Absolutely, yes.
So of that, how much have we already done and how much is pending?
I'll say almost 80% already we have contributed, 80% has gone up from that. Because everything else, equipment everything is in place now. So momentum it is there, payment terms like that. Once it is inside, we'll have that much payment, balance after direction and commissioning. But we need -- as we progress, we need working capital. So that also we have -- take the approval now.
Next coming to the Rohtak plant. Sir, Rohtak plant, how much is the CapEx which you have already done? And how much is pending?
CapEx is INR 60 crores.
Okay. Our share?
INR 60 crores, 6-0. And already -- if you see the orders and all, we have completed this phase-wise is going almost INR 40 crores we have spent, INR 35 crores, INR 40 crores almost. And things are already in the lineup for Phase 2 construction is going on. So there, I have to give the -- that work already had been placed. Equipment have been order has been placed. They are on the various stages of manufacturing. So almost money-wise, we have spent. The only thing that as the equipment will come, we have to give the money to supplier. So in the tune of 40 around, we have already finished, completed. That project also is moving in very fast track, and will be completing more or less at similar time which I have told about in the wide plate mill.
Okay. So you will be completing this by FY '21?
Yes, yes. Activities will start maybe from next month also. Every equipment already has landed there. People are already stationed there, direction commissioning is going on. On site, they are already available. So Phase 1 construction is over, which is one for the composite buildings, which will take care of our bulletproof jackets, certain panel for the bulletproof jackets, vehicle armory. So for that facility, already Phase I construction is over. Equipment are now landing up slowly there. It will be coming. And Phase 2 is for the vehicle armory. So there also the construction started.
Sir, I remember last, you had mentioned that the revenue potential for this facility is somewhere around INR 50 crores in the first year of operation. Is it right?
I cannot say today that only INR 50 crores, it can go higher also.
On first year of operation.
Visibility is there. There is a good visibility in the armor area with a lot of emphasis in our defense. And you know the security scenario in the country. Definitely, armor is a very important, integral part of defense system. So we are going to have a good business there. Right figure and all, I'll tell you, once we get the confirmed order. Today, there are -- the indications are there that we can get INR 60 crores, INR 70 crores or above in the coming days. But that is already indications out there. Unless that we receive the orders and all, we cannot confirm that. But it is a good business today in armor. In India, very limited players that are there who are -- who can be relied for giving right quality of armor products for the armed forces and our paramilitary resources.
Okay. And lastly -- sorry, 2 more questions, sir. One on the spring plant, there are the -- how much is the CapEx which has been done and how much is expected?
Spring plant, we have INR 27 crores. In fact, we started with 10 -- 25 -- INR 27 crores is the exact CapEx required. And already -- there also, we have majority of equipment, everything is over. So I'll say around INR 20 crores we might spend there. And that plant is also now moving very -- at a faster rate because we had a target of completing by October itself, this October '20. Earlier, we have given the September -- means April only, April '20, slightly because of pandemic, it has shifted. So we are hopeful of completing that project also very shortly. That will be much earlier, in fact. But there, there are some certain conditions where we have to first take trial. We have to establish the product, then only we'll get the business because you know it is exclusive going for the railway spring. So it has to be -- line has to be approved for the quality and production process.
So when do you say you will be able to start booking revenue from this particular CapEx?
It all depends at how quickly we're going to get the certification. Today, the railway also is slightly in that dull phase. But nevertheless, our people, we are trying to get some trial orders now. And we are in discussion with them to get a trial order. So moment my plant is going to start in the month of November, so I'll be taking trial with some products. A few trial operations will be here not for that -- getting the sales. So we are expecting a simulation by, again, March, in March '21, we'll get simulated. By that time, we'll get a good amount of orders. So let us see, how much railway can transfer there because they also have certain facilities in their different manufacturing units where they are making springs. So how much they are going to spare from that, depending on their capability to make their number of coaches, that has to be seen.
Okay. Okay. So overall, what is the CapEx estimate target for FY '21 and '22?
'21, '22, now we are talking '20/'21.
So '21 how much is it?
'20/'21, we have INR 230 crores only. Last year, also is INR 230 crores. This year also INR 230 crores.
Next question is from Viraj Mithani from Jupiter Financial.
Sir, I had 3, 4 questions. One is, is money coming from the government on time? Or there's a lag because of the pandemic?
Today, it is a very difficult question because when it will come, when will that come, we are not sure. You know that already space, ISRO, the fund has been reduced for them. Another customer for us, Atomic Energy, there also fund has been introduced. Only 1 area we have 1 relief that defense, the fund cut is not there. And fortunately, our business also has increased. But then if you ask me dues today, the dues is mainly have from the space. So if there -- the money flow is there, then I'll get the good cash flow to company also. There, we are finding some disruptions are there. But with our long relationship, understanding, we are trying to get our money. Sometimes it is coming on time, sometimes it's getting delayed. But we are managing, I can say we are managing that. And quarter-to-quarter, it will improve. I expect this quarter it will be better. Last quarter, it was not good. But this quarter, it will improve.
So what is our working capital cycle now because of this issue, which has come up?
Working capital cycle has not changed as such for MIDHANI. But what I can say is that working capital management, how we are doing. So that we have certain leverage there for our finance, where we can play within the limit of cash credit limit is there for the company. So we are managing that. We are not taking any loan as such. It is only some short-term loan we take, and then we also have some -- our deposits that will return back, as we get the money from the customer, return back. So that way we are managing. We have not faced any problem of that situation where we have to go for a big loan to the bank to meet our requirements. We are managing.
Defense will take care of other 2 sectors, like space [indiscernible] this year, right? Does that [indiscernible] will change?
Yes. For space also we'll get money, but at least earlier, we may be getting 100% to it, maybe at about 50%, 40%. So that type of flow is there. Otherwise, the money we are getting from space also, but delay is there. So during that period, we start to get the working capital, I take short-term loan, and then we meet our working capital requirements. And once the money is available, we return back.
Okay. And that loan is for, what, 2, 3 month duration or 1 quarter or 2 quarter duration something like that?
It all depends on the market dynamics. See, what our finance will perceive that day, that time report is very dynamic. So normally, it is 90 days, sometimes, sometimes 180 days. So that way, we are managing. We have some already board approval guidelines are there. We take from the board that to operate in certain limit. And that limit being, we are well within that limit. Sometimes, hardly 20% to 30% of the limit we are using. And we are managing our cash flow. Cash flow is not the issue, I'll say.
What is our cash in the balance sheet now?
Cash in the balance sheet?
Yes. I mean, our own cash in the balance sheet would be how much?
I'll just let my -- cash on the balance sheet?
[indiscernible]
We have free cash of INR 30 crores.
Our cash, this is our own cash, which is there with us?
Yes, yes, yes, our own cash, yes, definitely.
And sir, any plans for the OFS this year by government? The government is on a full swing to do OFS.
Yes, MIDHANI also had gone for 10% OFS is there. And it will come shortly. I think they are -- already, they are fixing and finding out some investment banker. So with this involvement of the investment bankers, it will be -- it will come in the market. And they will approach the market for the money. 10% OFS is there for us.
Okay. Before this financial year, right?
I hope -- yes, yes, definitely.
Okay. And sir, last question is our status of NALCO partnership, the project which we're doing, how it is progressing? And what is our investment?
Look, partnership is today, I can tell you, we have a situation where for environmental clearance, consultant is going to be fixed normally even in a few days. So that will be the one activity going on the site. On site already land compound wall has been made, total compound wall is ready now. So environmental clearance will be there. That activity will start. It will take -- their mandatory requirements are 4 to 5 to 6 months will be there, which includes probably hearing that we think that will be over. And finally, we are also going for the EPCM contract. So that contract also we are going to finalize. And that tender will be floated now. Already tender has been floated now. We have got some offers, and we are going to recommend on that also. So it will take another 2 months to decide about this. Then we'll go for technology partners. So process is on for that project also.
[Operator Instructions] Next participant is Nandish Shah from Money Control Research.
What is the order book and the order flow -- inflow which we are targeting for FY '21 and the order book position as on date?
Order book as on date is INR 1,700 crores, around INR 1,687 crores, INR 1,700 crores we have. And this year, as per all -- whatever we have booked so far, including visibility for next 6 to 7 months, we will be touching around INR 700 crores to INR 750 crores out of this year, we'll be booking that much.
And main will be from the defense?
Yes. Majority will be, I'll say, 70% to 80%, 60% to 70% is from defense. And when I say defense, it includes aerospace also. Defense, aerospace both together. Now aerospace industry is growing. However, that also commonly defense only, but whatever you make for military purpose. So that requirement is increasing. Because India is going for now making its own small engines, our engines. So our engines picking up in the country. That will give us a good opportunity for MIDHANI to be part of that.
Next question is from Kiran Naik from Modi Fincap.
Sir, in the starting -- opening remarks, you told that some legs -- some imports have been banned by government of India and some order or some CapEx is going to be done. So how much is the MIDHANI share in that?
In fact, in terms of percentage, very difficult to tell here. But I can tell you, normally, the type of equipment, type of military platforms they have now decided to make in the country. So definitely, I'll say that maybe the next 5 years, the idea is to invest around INR 4 lakhs crores to INR 5 lakhs crores as a CapEx.
Okay. In this sector?
INR 5 lakh crores, even I take 1% also, it will be a huge amount of orders.
Yes, yes. And how much of the percentage ...
What I said, how much I can grab is a major challenge for that. It's not that how much is meant for me. It is there that how much I'm able to execute from my existing capacity. That's what is important.
Okay, sir, got it. And sir I have 1 more question, sir. In railway also we supply some raw materials, right?
Yes, railways, yes, we have supplied some raw materials.
How much is the percentage?
Very less, maybe or maybe not even 1% also. Hardly maybe 0.45%, 0.5%. This was only a small beginning.
Okay. So chances are that we can get big orders in coming years?
Yes. If my wide plate mill is operational, I can supply the plates to them. If my spring plant starts operating, I can supply the railway coach spring. So that type of business only we are looking for. Similarly, future is meant for aluminum alloys for coaches. You will find in the future, like even in the metro coaches, aluminum alloy will be used. So those areas where it is possible to get a good business in the railway, not immediately, the future business will be there.
The next participant is Vikram Rawat from Phillip Capital.
Sir, can you give breakup of the order book of 1Q FY '21?
Order book breakup for different sectors?
Defense, space and the energy, which you used to give.
I cannot give you the exact one. But I can tell you that today, defense will be around 30%. 60%, 65% will be space, and rest -- balance will be from the energy sector.
And sir, you have given MoU target of around 20% of this year revenue growth. Is that correct?
It will not be 20% exactly. It will be around, I say, between 10% to 15%.
10% to 15%. Sir, what will be the mix...
10%, I can say, 10% to 15% I am targeting, 10% more precisely, 10%.
Okay. So what will be the revenue mix among the space and the defense?
In that, defense will be around 55% to 60%. And you'll have -- around 35% to 40% you'll have the space. And when I say defense, defense includes the aerospace also.
Next question is from Sandesh Shetty from Phillip Capital.
First, you spoke of on the defense front, you spoke about many opportunities coming up from MIDHANI. If you can elaborate on that, what are the products that you are looking at and how MIDHANI is planning to exhibit on this.
Yes, defense, I can say, classify in that land, then water, air, naval system, army and air force. Now 3 sectors, if you see that our majority of [ Indianization ] taking place in the naval sector. So the naval application, MIDHANI has a lot of products already established in the naval sector. And some of the products already we have -- we are also developing. So majority will be from the naval sector maybe, then from army side also we'll have some requirements. And the other part is most important one, the missile sector. Missile will be the major one where we'll be contributing.
And also, sir, with this 110 products being going into restriction list, are there any products that you are looking at for import substitution, in those 110 products that have been in the list?
They are basically a complete platform or complete equipment. We are not an equipment manufacturer. But I'll give you 1 example. If they decide to make like 1 [ bhadra, bhadra ] is one, or say, 1 gun on the military or even a tank. So there, we can have an important role to play in terms of supplying certain critical components. Already, we are supplying in Indian make from the since last 20, 25 years. So then there since now everything will be made it here only within the country. So their volume will increase. That is 1 example I'll give. Second one, they have also declared that certain engines used for our UAV, Indian-made UAV, UCAV. For that type of product, you need a very special material. That engine manufacturing program requires highly niche material. There also, we'll have a good slight business or even the technological -- in the form of technological partner, I would say. Another part is that 1 development work is going AMCA. That is advanced multi combat -- medium combat aircraft. So for AMCA also, AMCA project also MIDHANI is going to develop the new types of material, new variety of products there. So there are so many projects that we are tied up. And some of them submarine project, which is going for the your submarine applications. There also, we have a very important role to play. Already our materials are certified, our electrodes, welding electrodes, welding component. There are so many products, which is very exclusive in nature. So already, we have a technology available with us. So that -- in those platforms, when the production starts, MIDHANI has to play a very important role as a material supplier.
Next question is from [ Aditya Deva ] from [ Devisha Investments ].
Sir, basically, when we say that we have customer-funded projects, so at some point of time, do we need to return back the capital amount that we are investing on behalf of the customer? Or is it a grant that the customer has given us?
It depends on that what type and what form it is coming, in this project, we have 20...
40 years.
40 years. So like wide plate mill example I'll give, it is a major one, a very -- so we have to return that in -- in 40 years we have returned the money, 40 years.
And without interest?
Interest is very nominal. How much?
Nominal.
Nominal is I can say.
Okay. Okay. And sir, what is the percentage of revenue that we are getting from new products like for last financial year, how much percentage of revenue came in from new products?
New products, very difficult to classify, I'll tell you. Basically, new products with new grades, some new grades, something new, we can say. Exactly, I cannot give you the figure, not in so much percentage today. Normally, we have got from our established products only last year.
So single digits? Single digits?
Yes, it's maybe around 4% to 5% at this stage.
Okay. Okay. Sir, I just have 2 more suggestions. One is that we used to announce any new major order when we used to win maybe a couple of years back, we used to announce any new major orders wins -- that we are used to win. But for the quarter like -- in between the quarterly results. Now we just post the final order book at the end of quarterly numbers. So if we get any major order win during the quarter, it will be good if you can post it or if you can disclose it to the exchanges. That will be very helpful. Second thing is we are not getting the investor presentations on the website on a quarterly basis for last 2 quarters. So if you can take care of the investor presentations also, that will also be very helpful for shareholders.
I'll look into that. First of all, any major order is there that will posting and all we are doing, in fact. Depends on that what is the value of -- normally, which orders are coming, in the small values then we are not posting. Certain things -- Paul, are you supposed to -- are all information we are supposed to give?
[indiscernible]
Okay, okay, okay. See what I was talking to our company secretary that, normally, when we are not doing conference call, then we are putting our presentation on the website. So when the conference call is there, we address more or less all the issues.
Next question is from [ Anurag Patel ] from [ Row Asset Managers ].
Sir, you have mentioned INR 4,500 crores CapEx in annual report for this NALCO joint venture. So just the question how you are planning to fund it?
We have given INR 4,000 crores more precisely. CapEx, we have indicated INR 4,000 crores. And it is coming from -- in the form of different financial instruments. Financial closure, we have not done so far. We are looking for the -- from the different bankers that how they are going to finance this project. So since the major part is coming from the finance only from the bankers. So we are yet to finalize that how the fund flow will be there. But initially, our assumptions were that the bankers will give money in terms of CCD, compulsory convertible debentures or even the loan also. So we have different type of financial instruments we are looking for, and then we'll decide. So financial closure has not -- this has not taken place so far. So I cannot comment on the total financial structure right now. But the idea is that 70-30, that 30% equity and 70% we are going to take a loan. On that business only, these projects, DPR has been -- first DPR has been made. And on that, of course, only we are going to different investors to get the money. But I'll give you details when it is finalized. At this stage, it is not right to comment on this.
Sure, sir. Sir, margin profile, will it be better than current or it will be lower than current margin profile?
For that project, we have -- IRR is around 18% we have. 13% IRR is a very good value. And we have done very conservative calculations. And then we have made this 18%. And the possibility is there going towards a very higher side also, but I cannot say it as of now what will be the return on this. But definitely, it has a very premium one because these items are being imported today in the country, and that was even given by the CII also. CII has also projected. Whatever quantity we have put in our DPR, they have also certified that there is an import of around more than INR 4,000 crores to INR 5,000 crores worth of material. So the value return on that all depends on that, again, which sector we are going to serve. If the defense, aerospace contributions are increasing, margin will be on the bigger side, especially aerospace. Aerospace today, total import is taking place in the country. And with this project, it is possible to meet the requirement of aerospace. We have a separate line for aerospace material in this project. So I hope that it's -- and probably by the time project has matured, India will have a good growth in aerospace industry also.
Ladies and gentlemen, that will be the last question for today. I will now hand the conference over to Mr. Sanjay Kumar Jha for closing comments.
Yes. It was very nice to interact with you. It was good learning for me. A lot of things which you have raised here. It gives me some thought to probe that answer, to find out the reason for certain activities, certain projects. And always, it is better to get the input from people like you who are seeing this company sometimes from the outside more than me. My focus will be basically on the operational side. But on the financial side, on the performance side, I always believe that the people sitting other side like investors, they will be more concerned, they are thinking more and more because they have a direct stake in that in the form of their investment. It is nice that this impaction gives you a lot of energy and also a lot of thought, a lot of, like I say, energy to given the company and see that company meets your expectations. So with these few words, I thank you for to ICICI for providing the platform. The last time also, the response was so good, and it is always that if we have more number of people participating in that, that things -- discussion will be more vibrant, more meaningful. Thank you. Thank you very much.