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NLC India Ltd
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Ladies and gentlemen, good day, and welcome to NLC India Limited Q2 FY '23 Post Results Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Rahul Modi from ICICI Securities.
Thank you, Inba. Good evening, everyone, and welcome you all to the Q2 FY '23 Post Results Conference Call of NLC India Limited.
Today, we are pleased to host the entire senior management of the company, led by Mr. Rakesh Kumar, Chairman and Managing Director, along with Mr. Kumar, we've got the entire management of NLC. And two or three guests from the Ministry of Coal, Ministry of Plan, Department of Disinvestments. The call will begin with the initial remarks by the CEO. After, the floor will be open for a Q&A session.
I would like to now hand over the floor to CMD, who will introduce the management representatives and give his initial remarks. Over to you, thanks.
Thank you very much, Rahul, for hosting this investor call. I would like to share this as [indiscernible] opportunity to interact with NLCIL stakeholders and also reply to their queries in the financial results for the quarter and half year ended 30th September 2022.
I'm Rakesh Kumar, CMD NLC India Limited and also holding additional charge for Director Finance and Director HR; Shri Nagaraju additional, Ministry of Coal and Dr. Alok Pande, Joint Secretary, DIPAM; they're also joining from Delhi. Shri Shaji John is also joining from Delhi. Shri Mohan Reddy, Director for Projects and Planning; and Shri Suresh Chandra Suman, Director Mines; they are joining from Neyveli; and Shri Mukesh Agrawal along with Shri Viswanath, Company Secretary; ED/Finance and Company Secretary, where both the senior officers are joining from Chennai.
I welcome you all from this conference call. I would like to mention some of the performance highlights of NLCIL for the quarter and half year ended 30th September 2022.
In case of standalone power generation during the half year ended 30th September is 13,104.90 million units against 13,043.23 million unit in the corresponding period of the previous year, registering a slight growth of 0.47%. Lignite production during the half year ended 30th September is INR 124.42 lakh tonne this year against 116.42 lakh tonne in the corresponding period of the previous year, registering a growth of 6.87%.
We witnessed substantial augmentation of production -- coal production during the half year ended 30th September. It's -- this year is 49.75 lakh tonne against 18.76 lakh tonnes in the corresponding period of the previous year. NLC average PLF up to September is 74.66% against All India average of 64.49%. Consolidated power export during the half year ended 30 September is INR 14,312.99 million against corresponding period 13,887.10 million units, which is registering a growth of 3.07%.
Now coming to financial performance. Standalone revenue from operation for the half year this year is INR 5,847.21 crores as against INR 4,853.63 crore in the previous year's 6 months registering growth of 20.47%. The total income of the company for the half year ended 30th September is INR 5,997.68 crores as against INR 5,377.11 crores in the corresponding period of the previous year, registering a growth of 11.54%.
Profit for the period for the half year ended 30th September '22 is INR 873.29 crores against INR 567.43 crore in the corresponding period of the previous year, registering a growth of 53.9%. If we [indiscernible] the consolidated balance sheet, revenue from operations of the group for the half year ended 30th September is INR 7,352.19 crores as against INR 6,130.26 crores in the corresponding period of the previous year, registering a growth of 19.93%.
The total income of the group for the half year ended 30th September '22 is INR 7,545.16 crores as against INR 6,535.52 crores in the corresponding period of the previous year, registering a growth of 15.45%.
Profit and loss before exceptional item and tax of the group for the half year ended 30th September '22 is INR 1,469.93 crores as against INR 1,395.83 crores in the corresponding period of the previous year, registering a growth of 5.31%. Profit after tax for the half year ended 30th September '22 is INR 985.86 crores as against INR 554.61 crores in the corresponding period of the previous year, registering a growth of 77.76%.
Here, I would like to add some more information that NTPL has declared 5% dividend -- interim dividend, which has not been accounted so far because it is yet to be received. However, it will happen in this H2.
NUPPL, there is one news to share. We have also mentioned in the stock exchange that Assam has come forward to expect their willingness to take 25% of the power from Ghatampur, which is 495 megawatts. That, along with the consent, we have sent the proposal to Minister of Power for getting the allocation in favor of Assam. With this, after considering 75% PPA with UP, 25% with Assam, the power tie-up will definitely be better.
In case of thermal power station at Talabira, we have also got signed Kerala PPA for 400 megawatts on 19th October this year. This is definitely going to get a better picture for proceeding ahead on the Talabira power project.
Further, we have also awarded GA4 package in Ghatampur on 30th September, amounting to INR 979.61 crores. This will also be a big factor to expedite the completion of the project timing.
Now I invite questions on the financial results. I welcome all the stakeholders.
[Operator Instructions] The first question is from the line of Rabindra Nath Nayak from Sunidhi Securities.
Sir, can you please highlight why the mining profit has gone down on a quarter-to-quarter basis?
And regarding the interest cost, why the interest cost is high on a quarter-to-quarter basis. There is no capital addition of the capital expenditure -- the commissioning of the net CapEx. Why the interest cost is high? These are the 2 questions.
Yes. Mining profit, if we see this with H1, the profit during the first half year is INR 819.36 crores, whereas last year H1, it was INR 377.24 crores. So it has substantially increased, and the main reason for this increase is because of the coal production, which was ...
Sorry to interrupt. Sir, I'm just referring to the quarter-to-quarter from first quarter to second quarter, why were you deep under profitably in the mining asset -- mining segment.
First quarter and second quarter, always there is a difference. If you see that our mining operations are affected by the monsoon, and because of the monsoon, operations production is hampered, and mining operations are also [ reducing ]. And in Neyveli, we are also facing some land acquisition problems. Because of that, also lignite mining has also been adversely impacted.
But the lignite production is [indiscernible] you can say, last year in the quarter-to-quarter, there is a marginal decline in lignite production. And also in the power generation is also, you can say, this is almost a flattish kind of thing. So why it is this so much declined? Whether we saw a decline in the coal realization or the interim price of lignite or the sell price of lignite, if you can highlight something on that?
If you see the first quarter for mining segment, it was INR 2,150.47 crores. And in the second quarter, it is INR 1,838.26 crores. This is what is -- but if we see the quarter of the corresponding -- last year corresponding quarter, it has increased from INR 1,624 crore to INR 1,838 crores. So these variations are due to various reasons.
One is the monsoon. Because of the monsoon, our mining operations get affected in the second quarter. Second is that in case of lignite mines, we are adversely impacted because of the land acquisition. However, if you compare H1 of this year as compared to the H1 of the last year, the coal production has substantially increased from 1.9 million tonnes to 4.97 million tonnes, which is -- which has added a huge margin and a huge revenue also.
But can you please highlight -- can you please tell me what is the total transport price of lignite considered average impact transport is considered in this quarter and what it was in the last quarter.
[indiscernible] in this quarter and the last quarter was only INR 1,900 even remain for [indiscernible] after the CRPs the pine not open -- we have to continue to book...
Sorry to interrupt. Mr. Mukesh Agrawal, we can't hear you clearly, sir. Like if you're on a hands-free mode, can you switch to handset and speak?
Okay. Okay. In the [indiscernible] during first half and the fourth quarter in this quarter is [indiscernible] per tonne. And it will remain same till the whole lignite repetition is approved by the CERC for the tariff period 2019 to '24.
I could not get the number, sir? Can you please repeat.
INR 1,950 per tonne.
What about the coal realization, average coal realization in the quarter?
Yes. We can find out. In the meantime, I know for sure that the first quarter, we could sell coal much better and lignite also much better. And in the second quarter, we have not been able to sell more coal or ignite. Lignite -- there was no question of selling lignite outside because of the land acquisition problem, and we had -- where this lignite supply has put a constraint on the power supply also. So there was hardly any sales in the second quarter for lignite.
But in case of coal also, because of the demand in the power sector more, so we supplied more coal in the second quarter to NTPC rather than resorting to auction of coal in the market. So this is one of the reasons that we...
Can you please tell me what is the mix of say, coal sales in tonnage, but to different entities, such as NTPC, NTPL and the auction? What is the mix?
Yes. Out of these 4.98 million tonnes, we have sold the approximately 1 million tonne to NTPC against our swapping arrangement. To NTPL, we have dispatched 1.249, that is to 1.25 million tonnes of coal. And under the MoU route, we have sold coal to NTPC, 2.575 million tonnes. And auction, [ wholly ] auction is 1.61. This is the breakup of the 4.98 million tonne of coal during the H1 of '22/'23.
Sir, can you please tell me what is the coal EBIT for this year, this quarter?
Coal EBIT for this quarter?
Yes.
Actually, coal EBIT for this H1 is INR 252.18 crores.
Sir, regarding the interest costs, why is the interest cost - is higher on a quarter-to-quarter basis?
Actually, we have -- main reason is that we have issued a INR 500 crore bonds in Q3, December '21 at the rate of 6.85%. This is general purpose, and the purpose for our NNTPS plant. So because of this bond, we are getting slightly higher financing charges.
Add to one more thing. If we see on the H1 basis, my interest cost has been slightly reduced, and that reduction has taken deeper at the time in the impaired how first half interest is on a rising pace. So in terms of writing interest, we had -- our interest was reduced during first 6 months.
Sir. So how come it is reduced already -- so -- and quarter-to-quarter basis, I am referring, in the first quarter, 2,231 crores, and the second quarter INR 337 crores. So it is almost a rise of around INR 110 crores.
I think, Mukesh, this may be on account of the revaluation of trade receivables?
4 35 trade receivables revaluation is also there.
Also there. So on 3rd June, 2022, there was a circular issued by Ministry of Power, based on which DISCOMs are allowed to give their dues in number of monthly installments ranging from 12 months to 48 months. So because of availing this scheme, we have evaluated the options by DISCOMs, and we have provided the revaluation of trade receivables to the extent of INR 88 crores in the H1.
Mr. Rabindra Nath Nayak, request you to please to return to the queue. Several participants are waiting for a turn. [Operator Instructions] The next question is from the line of Mohit Kumar from DAM Capital.
Sir, first question is on the -- what is the status of NLC's Talabira coal power plant? When are you expected to keep the order out? Has the bidding happened? And similarly, can you tell us about the Neyveli, what -- the 1,320-megawatt power plant.
Yes, sure. Talabira tendered for 3,200 megawatts, which is under process. Now we are in the process of valuation of the techno-commercial with our Director P&P [indiscernible] and I would like to request him to share more details about this.
Neyveli, Talabira thermal power plant tender was opened. PP valuation is completed, which L&T and BHEL have participated, and their bids are being evaluated for techno commercial. That's really the big project having technical issues. Some deviations are there. Correspondence and discussions are going on between our contract department and BHEL and L&T. It is in progress.
When can you expect to [indiscernible], sir?
Yes, we are trying to expedite, but there are 2 more fronts on which we have to progress. One was PPA, and another was land acquisition. So land acquisition, second [ RPDC ] meeting has been held on 20 -- in the month of August -- 24 [indiscernible] and on the front of PPA, I have also already shared the good news that we have signed the PPA for 400 megawatts with the [ KFCD ] on 19th October.
As you may please reconnect that we have already signed PPA with TANGEDCO for 1,500 megawatts on 16th March 2022, and the present Puducherry for 100 megawatts, PPA was signed on 9th May 2022. So with the 400-megawatt signing PPA, we have completed 2,000 megawatts out of the 2,400 megawatts. Balance 400 megawatt, GRIDCO is willing to purchase for which -- since it is their home state for the project, we don't have much doubt on their proceeding, as they have already indicated that the process is going on, and we are going to get this done soon.
Although our team is working round the clock for evaluation, as you are aware that it is a huge project, INR 19,422 crores and in which the package, which is a combination of 3 important package we used to earlier divide the project into 3 packages. So leaving aside the peripheral outside utilities and facilities, we have combined all the scope of work in this package. And we have got 2 offers L&T and BHE. And there's much huge order.
Definitely, we want to firm up and make it very clear and transparent. Therefore, our team is working round the clock. And we are going to come up with the finalization of the technical build, and based on that, we will open the price bid. In the meantime, land acquisition is also going on. So the progress is going on, on this project. We are trying our level best to ensure that we endeavor our best to award it within the current financial year.
So regarding this Year 2 second expansion?
Yes, look, tender is sorted, and tenders floated on the October '22, and the tenders are [indiscernible] this month of November '22. This part is going up.
This is also a very ambitious project of NLC, and we are hopeful that we will be able to progress on this project very fast because the land is already in place, and the PPA consent is already given by TANGEDCO for the full quantum. Therefore, we don't see much problem. And we are going to have the proven technology for lignite as we have executed the projects in the past, so there does not seem to be much problem in progressing.
Can you take the tender to get finalized in this fiscal year, 1,320 megawatts?
We are working on that target only that we want to finalize the award by this year -- by the current financial year itself.
Secondly, sir, how much was the under recovery in the quarter or in the half year?
Yes, sure. If we see the under recovery, we have -- as compared to the last year, we have improved. Last year, first half, our under-recovery on thermal was INR 243.30 crores. Against that, we have improved to INR 189.72 crores. And this INR 189.72 crores, mainly it is on account of the TS-II extension where the problem is still continuing.
And secondly, we have faced some problems in TS-II Stage 1 and Stage 2, where the under-recovery has gone from INR 4.58 crores to around INR 40 crores. Otherwise, I'm happy and comfortable to share that our newly commissioned plant, NNTPS, we have almost come to nil under-recovery, only INR 1.65 crores as against INR 76.74 crore last year. And on other fronts also, we have improved slightly. So this is the execution on under-recovery.
So last question on my side. What is the status of coal gasification plant. Can we expect the tending to happen in this fiscal or next fiscal?
Yes. Coal gasification is a new upcoming business area of priority in our country. And accordingly, we have also taken up gasification of lignite, and the project is going to convert not only lignite to syngas but also to methanol. So we are progressing well on lignite to methanol. Already, our Board has approved the project cost for an amount of INR 4,394 crore, and PFR and DFR is already approved.
We have awarded the work of EMC to M/s EIL, Engineers India Limited. They have called out the first EPC -- first package contract that the tender is already floated on 22nd October this year, and we are working on expediting the second package contract.
Now the progress is going to be very fast as you are aware that we already have the land. We have the infrastructure facilities initially to expedite the project activities. Water, power, all these things are in place. Lignite results are already available. And we will be able to save on the execution period also substantially because team is in place, and we are going to -- and we have seen a lot of response from the contract -- EPC contractors.
The tendering is on technology-agnostic methodologies so that we have identified 2 technology providers, Air Products and Sinopec and some 10 EPC contractors in the country, very reputed by these Tata, LNGs, and Thermax and likewise.
We are getting a good response. They have shown a lot of interest. They have also visited our project site. We had -- top management had the interaction with them recently, and they are very enthusiastic.
For the other package contracts also, we don't have dearth of technology, and EPC contractors are well positioned. We are hopeful that we'll be able to get a very competitive price, and we will be able to get the ball start rolling on the execution front.
Does BHEL have the technology? BHEL...
BHEL? With BHEL, we had signed an MoU for development of the lignite technology. Since they have already of their -- it is understood that they have proven technology for coal gasification. But so far, they have not tried the lignite. So we are cooperating. They have signed an MoU. Now since the government of India has set a target of 100 million tonnes of gasification by 2030, we see a huge opportunity. Therefore, lignite gasification pose a very big opportunity to NLC. And once we announce this whole big business coming, it is always better to get the indigenous technology developed.
BHEL is confident that if they work together with us on lignite, they will be able to come out with indigenous technology, so we can -- initially, we will have a pilot project. And then later on, once it is proven, we can go for expansion of this business stream in a big way with the help of indigenous technology because, obviously, technology providers within the country is definitely more comfortable. That is, not only for the company but for the country also.
Our next question is from the line of [ Anand Mundra from Mytemple Capital Advisors ].
So what is the regulated equity at the end of this quarter?
Yes. As on 30th September 2022, we have a total regulated equity of INR 6,593.19 crores, out of which mine-regulated equity is INR 2,830.78 crores and thermal-regulated equity is INR 3,762.41 crores.
Sir, does this include the regulated equity of our subsidiary, NTPL.
No, no. It is not including the regulated equity of NTPL. NTPL is a separate company. So these figures are without considering the NTPL.
Sir, how much would be the regulated equity of NTPL?
NTPL, we have a regulated equity of INR 2,200 crores approximately, out of which INR 1,947 -- sorry. It is regulated equity of INR 1,942. INR 2,200 crores is the total equity. Regulated equity is INR 1,947 crores.
And sir, how much is the equity that is invested in the renewable project, both under construction and commission?
I'm sorry. I think regulated equity, I have shared a wrong number. It is INR 1,490 crore instead of INR 1,947 crores. I'm sorry for the mistake.
And sir, what would be the total equity that the company has invested in ongoing -- under construction and commissioned renewable project?
Yes. Right now, there is no under-construction solar projects. We have completed 1,421 megawatt of renewable energy, out of which 51-megawatt is wind and balance is the solar project. Total investment made in these projects is INR 6,594 crores, out of which, equity deployment is INR 1,675 crores.
We'll take our next question from the line of Nikhil Abhyankar from DAM Capital.
I've got a couple of questions. So what is the current inventory level of coal that we have? And how do you see the H2 sales -- of coal sales, basically.
Yes. So inventory level, actually, we -- it is not advisable to store more coal because we cannot keep the coal in safe condition for a long duration. So our inventory is ranging from 2 lakh to 4 lakh tonne at the Talabira pithead end. As of now, it is reaching around 2 lakh tonne only.
As far as the future prospects of coal is concerned, see, as we can see that there is a rise in the demand for power, and Talabira mines were allocated to us to primarily meet our end-use plant NTPL and Talabira pithead power plants. And in the meantime, since some time is there for us to get the Talabira pithead power plant constructed and commissioned, it will take few years.
Therefore, we applied to Ministry of Coal for allowing us to sell coal because we -- our mine is ready. We are able to increase the production. Last year, it was 6.35 million tonnes. This year, we have set a target of 13 million tonnes against which we have met the target of the first half of 5 million tonnes, almost same level -- so -- but our priority would always be -- first priority would be to meet the demand of our NTPL end-use plant, for which directly we are supplying to NTPL, and we are also, through shopping arrangement with NTPC, MCL. We are getting from MCL and supplying to NTPC.
In addition to that, we have signed an MoU of 3 million tonnes to NTPC, so our second most priority will be to give the coal -- sell the coal to NTPC. So up to 3 million tonnes under MoU route and additional also, we can give to NTPC.
NTPC is also making efforts to augment the their power generation by taking coal from Talabira also, but in case we end up in some surplus coal, then we are ready to auction the coal through e-auction. But definitely, we can see a lot of demand coming up in the coming months for coal. And we will also try to augment our coal production. In the short and medium term, coal future is bright, and we want to avail this opportunity towards maxing out.
And any guidance on the volume of e-auction coal?
Yes. E-auction, as I shared with you earlier also, we would be giving a first priority to end-use plant, second priority to NTPC. We have also applied for seeking permission of Ministry of Coal for supplying coal from Talabira to Ghatampur also because our linked mine for Ghatampur is going to take a few more years to come up for operations. Therefore, in case permission is granted, we will be supplying coal to Ghatampur also.
And in case we get some surplus coal, then we will be auctioning it already. Permission is already in place, and e-auction mechanism is also there.
Final question, sir. Our reserves have increased by INR 700 crores. Any specific reason for it, sir?
Yes. As you're aware that we are continuously pursuing our level best to reduce the receivables. And it all depends on beneficiaries, that in case they opt for discounting of this, or they are able to -- earlier period, we were able to get the dues liquidated because of the Neyveli schemes, and we were able to get substantial reduction in the use realization. However, since there are some difficulties being faced at their end, and some of the issues which are between beneficiaries and NLC, based on the truing-up order and other orders, such disputes are also prompting reduction of -- unilateral reduction of payment of our bills [indiscernible].
We'll take a next question from the line of Anshuman Ashit.
So the first question, sir, you have mentioned that we have taken a charge of INR 88 crores on revaluation of receivables. So what was the total amount? And if you can tell us the statewide receivables which have been converted into installments?
Actually, as per the circular, they have the option, and these were to be finalized after getting the clarity on the dues. However, based on the letters, which different DISCOMs have given, we -- they have started paying in installment at their own, and we are in discussion with the DISCOMs to arrive at the final figure. But in order to give some picture, mostly, Tamil Nadu has opted -- they have opted around INR 735 crores in the installment as of now. However, they keep on changing their amounts. As of now, this is the picture.
Which are the other states that we are in discussion with?
Other states, Telangana and Karnataka.
Sir, what has been the PAF of TPS-II expansion and NNTPS during the quarter or the first half?
NNTPS and...
TPS-I expansion.
Yes. I'm working on that. Please go to the next one. I have got PLF figures right now. In case of TS-I expansion, we have achieved PLF of 68.46% in the H1. And you wanted to know NNTPS. As mentioned, first half, PAF is 86.29%. And in case of NNPT, the PAF is 92.27% in the first half.
Sir, what has been the CapEx in the first half? And what is the target for FY '23, '24 and '25 now? And can you please state it for thermal projects and renewables?
Yes. Our CapEx target was INR 2,960 crores in '22 to 23 -- INR 2,920 crores, against which if we see the bifurcation, the takeup on the target services against which mainly our mining projects are Talabira Mine 2 and 3, then we have area extension of Mine 1 and extension of Mine 1A. In addition to this, we have a target for the mining project in joint venture for the Pachwara -- South Pachwara mine. I'll give you the breakup of 2,920 shortly.
And again, the power thermal projects, we have the balance of NNTPS and annual -- the PLF is in the joint venture. Odisha Thermal Power Plant is the name [indiscernible] service to the CapEx plan this year. Out of INR 2,920 crores, we have the mining projects to CapEx of INR 190 crores, and power sector is INR 860 crores and joint venture, if we see coal block Pachwara INR 110 crores, NTPL, since we are coming up with the [ LGD ] project, the INR 250 crore is the target. And NNTPL Ghatampur, we have an ambitious target of INR 1,510 crores. And this comes to INR 2,920 crores. Yes, this is the breakout.
What is the target for FY '24 and '25.
FY '24 and '25, we are having even -- even an ambitious target. Actually, we have set our target for the next up to 2030. Total CapEx during the next eight years is going to be INR 72,000 crores plus -- INR 71,000 crores plus. In '23, '24, as per our corporate plan, we have set a target of CapEx of INR 8,244 crores, which is likely to increase thereafter.
Sir, given the high CapEx targets we have, so will this impact in any case our dividend payout going forward? Or will it remain as per the policy.
Definitely, initially, when we see our corporate plan of 2015, where we had an ambitious CapEx plan of 10 years for an amount of INR 129,000 crores and in which we had kept a provision of getting equity of around INR 3,500 crores in the third or fourth year, that was the time when we were facing difficulty. However, keeping in view the changing scenario, and based on the clarity that we should not seek any financial assistance in terms of equity, so we have reviewed and revised our corporate plan.
Now it is based on our projects, which are under formulation, and future projects are also very visible complete. I do not think that it is going to affect the capacity to service the shareholders with a respectful dividend because, year after year, we are adding the capacity. We are -- for example, NNTPS has started giving us revenue. As you can see, the turnover rising, and our network is also consolidating. So therefore, with the time to come as we can see the visibility that our Ghatampur project of 1,980 megawatt is going to be commissioned in the next one year of time, which will start giving revenue and profit.
So by the time we take up expansion projects, we -- our internal generation will also grow substantially with the completion of these projects. And our -- we will definitely like to keep a balance between servicing of the shareholders with a respectful dividend, and also we'll see to it that our growth plans are not adversely impacted. This is what we believe.
That's very reassuring, sir. One final question. If you could give us the status on the South Pachwara coal block and also the commercial mining bids, which we have done for 2 coal blocks.
Yes. So in case of South Pachwara, the project is progressing very well. Our Phase 1 of the mining is almost over, and we are seeing that we will be able to progress on the project. Although there is a setback on the railway siding, which was to come up with the approximately INR 2,500 crore kind of CapEx in which 3 partners are there, I would request Director Mines to share the latest treatments on both of them.
South Pachwara coal block is progressing well so as informed by CMD. We have already achieved Phase 1 activity. Phase 1 activity means geological report completed, mining plan approved, and we have applied for FC and DC. Our disclaims proposal has reached to a state government. So it is to be recommended very soon to [indiscernible] has been approved, public hearing conducted, so one meeting by MOE. ESC has been conducted, and they've recommended certain studies. So those studies are underway.
At the same time, District Authority had constituted R&R committee. So one meeting supposed to be scheduled very soon, where R&R will get approval. Thereafter, we will proceed with the land acquisition.
At the same time, under CBA Section 11 [indiscernible] by which government acquired the land and give the port means position to NUPPL. So that had also been completed. So only we are supposed to disburse the compensation -- land compensation as well as R&R benefit, and we will acquire the land.
At the front of railway siding what the CMD has said. So one SPV has been constituted by NUPPL with Bengal Power Development Corporation and Punjab [indiscernible] as well as RBNL and the Government of [indiscernible].
So this is the constitution of SPV and feasibility report got completed, bankability meeting supposed to happen in next week, where the finance decision will be taken, so I think this project will take a bit time. And since there is railway line connection 40 kilometers away from the project, and this railway line will serve the purpose of 3 of the mines, Puchwara South, Puchwara Central, and Puchwara North. So this is broadly the status of Puchwara South.
We are regularly monitoring all the aspects of this very important project for us. And we are hopeful that we will be able to get good results in the time to come.
And sir, on the commercial coal mining bid?
Commercial coal mine already, we have applied, and of course because of high rates, we could not be a successful bidder. But again, in this tranche also, we are going to apply for 2 more mines, 1 in [indiscernible] and other in a state of Chhattisgarth in [indiscernible]. So we are working on it. And we will come back with the development.
We will take our next question from the line of [ JK Jain from JK Jain & Company. ]
Yes. I've joined a little late. One thing is your other income has reduced by about INR 300 crores year-on-year, and your other expenses has increased by about INR 200 crores year-on-year. Kindly throw light on this why this is?
Yes, sure, sure. Now as I shared earlier that we have provided some INR 88 crores because of the June 3 circular. And secondly, if we see last year H1, we had received dividend income of approximately INR 194 crores from our subsidiary NTPL. And our surcharge has reduced substantially because we -- our realization has improved on an invoice-to-invoice basis, month-to-month basis. And the surcharge, which was, although adding to the income, but it was not very happy moment for us, and it was adding risk to our business, we are able to mitigate that risk, and we are able to consolidate our position on real business through other sources like selling of lignite and coal and reducing our fixed under-recovery.
So another point is that there is a lot of notes being given by the auditor qualifying your different result. And one particular is Point #13. That is Note #20 to the statement where the company has not made any provision with regard to the disputed dues of INR 1,050 crores on account of water consumption and all these new things. Is there any contingent [indiscernible] is there going to be any confident-level risk for this account?
No, no. Basically, this 2019 to '24 tariff period is the transition period in which Ministry of Coal, which earlier used to issue the guidelines for fixing the price of lignite and based on which CRC used to approve the tariffs, that has undergone change. And initially, Ministry of Coal delegated the power of fixing the lignite price to NLC India Limited Board. And once NLCIL Board, in line with the thermal tariff, by exercising the past practice, the approval of Board of Directors of NLCIL guidelines were issued. However, the DISCOMs disputed these guidelines.
Let me just give you the background. Then we will be able to get a picture of this INR 1,000 crores. So based on this order, the -- we have taken out the security charges and water charges in line with the thermal power tariff because, as you can see, the thermal power tariff has undergone changes where water changes and security charges are taken out of the base tariff. Similarly, we have had also done that, and which DISCOMs did not agree because they wanted this tariff to be part of the base tariff itself.
Yes, so these disputes were raised by them. And later on, CRC issued the guidelines for the prior lignite price fixation. And we -- this -- keeping in view of the dispute, and DISCOMs got some reason to deduct some amount from our bills and tariffs. So they stopped paying security charges and water charges. It was not denied as a part of the cost element of the tariff. We have launched our petitions with CRC, which is not including the security model separate item but part of the base tariff. And the total amount of these petitions are more than what we claimed in the earlier period wherein security and water charges were shown separately. But still, they are disputing. And based on that, CRC has also come out with the guidelines in which security and water charges are not excluded.
So keeping visibility that the CRC has also agreed with the beneficiaries. [ CAD ] has issued a comment that this is amounting to INR 1,050 crores is not recoverable. And to this extent, the power -- their profit is overstated. The revenue is overstated. So -- but we understand that this is recoverable. We are not required to pay. There is no feasibility. There is no such ground that we should believe that.
Accordingly, against the CAD comment, we have given the replies also in our annual report, which can be seen on Page 201. And because of the [indiscernible] literally, we are fighting the case. And because of this observation by CAD, stationary orders have also been raising this issue, which we have given them the assurance that security and water charges as a part of the O&M cost is not -- never denied by any beneficiary as a cost element of the tariff, but it is just a structure.
Another thing because I have seen that your company balance sheet size is approximately INR 20,000 crores, but I find that there are 2,000 crores of regulatory deferred [ DV ] and INR 3,000 crores of regulatory deferred credit. Do you think that there would be any problem in realization of these deferred debit balances? Or is there a chance of any contingent land on this aspect?
One thing is I find that there is a lot of tariff per trued-up orders, and these are being filed very late. The first note is for the Neyveli mines for 2014 to '19 the tariff true order was filed in May '22 for an amount of INR 581 crores. Is it a normal feature in this generation business? Or there are a lot of notes out there. So don't you think that this item that these things would be given proper attention. These are -- if you add up all the total, it would be something like INR 70,000 crores, the INR 2,000 crores deferred debit balance, INR 2,000 to 8,000 crores deferred credit balances. We have -- we feel a little bit septic, any view about these things.
Sure, sure, sure. I would like to clarify here, nothing to worry because NLC India Limited is an integrated company, in which mining and power generation, both are equally strong and build up over a period of time. And NLC India Limited is the only company whose both the businesses are regulated.
Lignite was regulated long back along with the thermal. Therefore, it is a very specific company in which this regulatory mechanism works. Now you know that as far as power tariff is concerned because of so many players and so many [ desserts ] the situation is very clear and, therefore, not much disputes on the thermal power aspect. However, because the lignite mining, there is always a possibility to question any aspect wherever either it is tax [indiscernible] lignite mining capacity, overheads, production details, so many aspects are there. But we can see that in spite of the fact that the regulatory balances are more, but on case-to-case basis, we have formulated our accounting policies in 2016 based on the NDS in such a way that, that gives a lot of comfort to the investors also because we have adopted a conservative approach. Wherever when we file a petition, we start booking the revenue based on the petition filed. As soon as the order is issued by CRC, we readjust and we take cognizance of the revenue, which is agreed by CRC.
Later on, if the -- there is -- even if we have a strong feeling that the intention is against us, and even if we go to APTEL since this time, APTEL gives a decision. We do not change it. Therefore, the -- in spite of the strong notion that we have a claim and we have a rightful amount due from the beneficiary, we are not able to get the money because, till such time regulatory orders are issued, we are not able to realize the amount. But all these dues are definitely, from time to time, we are getting the orders, and we are hopeful that we will be able to get our truing-up petitions also in line with our plans.
The legal battle is long, but the power industry is definitely one sector where these disputes are inevitable. Government of India is also trying to come up with the regulation from time to time to revise the dues, to give support, to punish the defaulters through merit order rating, through various circulars, healthy mechanism, [indiscernible] so we are hopeful that in the time to come, the power sector will also witness a clean slate. However, that will take some more time.
[Operator Instructions] We'll take our next question from the line of [ Sanjeet Damani from SKD Consulting ].
And my respect for the management and all the entities of the company for running the company to [indiscernible] despite all accounts, which you have just now discussed about [indiscernible] and so many other things. I think I'm audible.
Mr. Damani, if you're on a hands-free mount, please switch to handset and speak. We cannot hear you that well. It looks like Mr. Damani's line has dropped off. If he joins back, we will reconnect him. In the meanwhile, we'll take our next question, that's from Rabindra Nath Nayak from Sunidhi Securities.
Sir, what is the auction price for coal for October? Or if you can't give, give the auction for lignite that will sort of help us.
Yes, please wait for a while. In the meantime, you can get another question.
Lignite, we have not auctioned in the month of October. As I shared with you that we are facing issues in the land acquisition. And because of that, our lignite production is...
In case of Barsingsar Mine we have auctioned in the month of October, not in [indiscernible]. But the price realized in the auction is [indiscernible] Yes. We have got the price in auction ranging from INR 4,830 to INR 4,930 per tonne.
For coal, sir?
And for coal, the average price -- the range between -- the price lowest and highest as INR 2,690 lowest and INR 2,740 per tonne is the highest price for the recent auction of 2.5 lakh tonne of coal auction.
Our next question is from [ Sanjeet Damani from SKD Consulting ].
Sir, first question regarding the realization. You said lignite you realized INR 4,800 per tonne in Rajasthan [indiscernible] and where have you realized only INR 2,500 crore?
Because of obvious reasons that coal supply is more -- and it is -- the coal buyers are near to the mines. Definitely, the supply factor is more, and more auction is taking place, not only by NLC but by Coal India also. But in Rajasthan, the availability of coal up to Rajasthan is less, and lignite's availability in the market was also less because, earlier, we were not given the permission to sell. Not only we are giving so definitely, there is a huge demand. So we are trying to augment the supply in Rajasthan so that the customers can be satisfied we get [indiscernible] augmented.
Actually, sir, our discussions have really gone long, and I have a lot of questions, but one request I want to make that if we can make a small presentation after every quarterly results, on location-wise, unit-wise, position has to install capacity and power produced on mine the materials quantity, realization, et cetera., then a lot of questions would get eliminated, and we will rise above this to understand certain other things from you. I mean say, Rajasthan -- location in Rajasthan, you have and many other location, you have some Talabira mine. You have some locations in UP or coming up in UP, some more mines are coming in Odisha, and power plant is also coming. So if a status can be given based on the location-wise, unit-wise, then it will be very easy for anybody to understand the business. This is what I see, sir. I want your opinion.
Yes, definitely. We have taken note of your suggestion. We will try to give more information in our corporate presentation, which we posted on our website before the investor call. But we have taken note of your suggestion. Secondly, whatever questions are left out, please arrange to send an e-mail. We will try to respond to the extent possible.
Ladies and gentlemen, that was the last question. I now hand the floor back to the management for closing comments. Over to you, sir.
Thank you very much. It is really heartening that a lot of interest is now getting generated in the investors and a number of questions on different aspects of our business are being asked. And we are hopeful that we are able to give our comments on all the aspects. I will request in case Nagarajuji is there, in addition 2 or 3, ministry of Coal Government of India. And Joint Secretary Pandeji, available, maybe they can just say a few words.
That looks like the line just got disconnected, sir.
Lines are disconnected. But it is also very heartening that a lot of support from the Ministry of Coal and DIPAM is being extended to support the cause of the investors and try to bring a lot of information transparently about the business of the company.
And we will continue to strive for making the investors call and investors interaction and presentations more informative and more transparent and more giving insight into the complex issues which are coming in the mind of investors. We are thankful to all the investors and all the agencies who are find it interesting to connect to us on the investors call. Thank you very much.
Thank you, members of the management. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.