Power Finance Corporation Ltd
NSE:PFC
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Power Finance Corporation Ltd
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Ladies and gentlemen, good day, and welcome to the Power Finance Corporation Q3 FY '20 Earnings Conference Call hosted by Prabhudas Lilladher Pvt. Ltd. [Operator Instructions]I now hand the conference over to Ms. Shweta Daptardar from Prabhudas Lilladher Pvt. Ltd. Thank you, and over to you, ma'am.
Thank you, Faizan. Good evening, everybody. On behalf of Prabhudas Lilladher, I welcome you all to the Q3 FY '20 Earnings conference Call for Power Finance Corporation. We have with us today Mr. Rajeev Sharma, Chairman and Managing Director; Mr. N. B. Gupta, Director, Finance; Mr. P. K. Singh, Director, Commercial; Mr. R. S. Dhillon, Director, Projects. I would now like to hand over the call to Mr. Rajeev Sharma. Over to you, sir.
Thank you very much. Good evening, everyone. I welcome you all to this conference call. I'm happy to share with you PFC's performance during the third quarter of FY '19-'20. First of all, I have some great news for our investors. As we had promised last year, I'm happy to share that PFC declared an interim dividend of INR 9.5 per share. I'm thankful to all our investors for the faith they have put in PFC, and we believe that we will continue to deliver such stellar returns year-on-year. This quarter has been all about delivering promises. On financial performance front, in Q3, our stand-alone net profit is up by 45% from Q2 FY '20 at INR 1,680 crore. On a consolidated basis, we reported a net profit of INR 3,387 crore in Q3, which is an increase of 36% from Q2 FY '20. On this, I would like to add that PFC has opted to apply reduced corporate tax rate, which was introduced in September 2019. Accordingly, corporate tax rate has been reduced to 25.17% from 34.94%, effective from 1st April 2019. Going forward, this will have positive impact on PFC's cash flow due to significant tax savings but, due to remeasurement of earlier recognized DTA at lower rates, there would be reversal of such DTA. This would impact our profits for this financial year. Thus, after considering tax savings and DTA reversals, the net increase in tax expense for 9 months is INR 319 crore, which is getting reflected in our profits for December quarter. Further, on the profit front, I would like to highlight that REC recently declared dividend in its quarterly results. Since PFC has 52.63% equity stake in REC, a dividend of INR 1,143 crore approximately will be reflected in Q4 profits. Coming to our financial indicators. As we have shared earlier, this quarter also, we successfully maintained our yield within the targeted range of 10.660%. Also, we have achieved reduction in cost of fund quarter-on-quarter basis. The cost of funds for Q1 FY '20 was 7.90%. For Q2 FY '20, it was 7.82%. And for this quarter, it is 7.75%. Thus, within a span of 9 months, our cost reduced by 15 basis points. Further, due to a stable yield and competitive cost, the spread is also seeing an upward trend. The spread for Q3 FY '20 is 2.91%, which is an increase of 20 bps from Q1 FY '20 and an increase of 13 basis points from Q2 FY '20. I feel that our financial indicators have now stabilized, and we expect them to be maintained within the range. Another positive development I would like to share is that our capital adequacy is now back to the level it was before PFC acquired REC. There were a lot of concerns on the capital levels when we acquired REC. We had assured that -- then that we will restore our capital adequacy. Now within 9 months, PFC has been able to recoup its capital adequacy ratio to 19.32%. In fact, our current capital adequacy ratio is more than the pre-acquisition level. Before acquisition, our capital adequacy was at 18.95%, and now it has increased by 37 basis point to 19.32%. We expect the capital adequacy ratio to further improve in future. On business growth front, we have seen a growth of 26% in disbursement during Q3 FY '20. That is from INR 14,648 crores to INR 18,473 crores (sic) [INR 18,413 crores]. The loan asset growth accordingly is 12%. On the asset quality front, I have been sharing with all of you that we have been actively working on resolution of stressed asset. Now our resolution efforts are visible in numbers. Our gross NPA as on 31st December 2019 has come down by 1.13%. That is from 9.47% as on December 2018 to 8.34% as on December 2019. Our net NPA ratio is also coming down quarter-on-quarter. The net NPA ratio for Q3 FY '20 is at 3.94% compared to 4.28% in Q2 and 4.65% in Q1. Also, this is lowest net NPA ratio in the last 2 years. The improvement in NPA ratio is due to resolution of 2 stressed assets of INR 2,650 crore during the year. That is GMR Chhattisgarh and the recent one being RattanIndia Amravati with loan amount of INR 1,720 crores, wherein resolution has been achieved through OTS. We already had maintained sufficient provisioning against this project. Therefore, we have not taken any additional hit on our profits. These positive developments reinforces PFC's continuous efforts for resolving the stressed assets, and I am hopeful that we will be reaching resolution in a few more assets in the coming year. On this note, I would like to share that PFC is envisaging resolution in 6 projects of around INR 9,078 crores in the coming few months. Now I will quickly update you on resolution status of these 6 projects. Out of these 6 projects, 3 projects are being resolved outside NCLT and 3 projects are being resolved through NCLT route. Starting with 3 projects which are being resolved outside NCLT. Firstly, we have 4 x 360-megawatt RKM Powergen projects with loan amount of INR 5,163 crore. In this project, the resolution plan has been approved by PFC and 5 other lenders. Approval from 2 other consortium lenders is awaited. I'm happy to share with you that from 1st February onwards, power supply to Telangana got commenced from this project for 550 megawatts, as envisaged under the pilot scheme 1. Another project is Essar Transmission, with a loan of INR 438 crore. The resolution plan -- sorry, has been submitted by the borrower. And lead financial institution, REC has already approved the plan. Today, PFC's Board has also approved the plan. Only Axis Bank's approval is left, which will be obtained shortly. Next project is 3 x 150-megawatt India Power Haldia, with loan of INR 960 crores (sic) [INR 959 crores]. The resolution plan for this project has been finalized by the lenders, and the approval process is underway. Coming to the other 3 projects which are being resolved through NCLT. We have 600-megawatt Jhabua Power Project, with loan of INR 764 crore. Another project is 3 x 40-megawatt Jal Power project of INR 386 crores. And the last one is 2 x 350-megawatt Ind-Barath Utkal of INR 1,368 crore. In all these projects, resolution plan or OTS is under approval of NCLT. On all these 6 projects, we have maintained 46 -- 47% provisioning, which we feel is adequate. Resolution of these 6 projects is expected to bring down our gross NPA ratio to around 5% in near future. Going forward, I am optimistic on a stressed resolution front. Given various government initiatives, I am happy to share that recently, under pilot PPA scheme 2, 2,500-megawatt worth PPAs have been allocated to various sister projects at a discovered tariff of INR 3.26. A couple of PFC projects also got PPAs under this scheme, like Essar Mahan got 260-megawatt and MB Power got 150-megawatt. Now on the borrowing portfolio front. Throughout the interactions with you all, we have been continuously emphasizing on our objective to diversify our borrowings. I'm glad to share that our diversification journey continues both with respect to Indian and foreign markets. On domestic front, in December 2019, government launched Bharat Bond ETF umbrella program, which aims at creation of an additional source of funding for government organizations. PFC had participated in the first tranche of issue of bond ETF and raised an amount of INR 2,500 crores. Now through bond ETF, PFC has another funding available in the domestic market. Also we are seeing a progressive increase in funding under 54EC capital gain exempt bonds, which has a low coupon of 5.75%. Just in past 9 months, mobilization under these bonds doubled compared to FY '18-'19. On the international raisings, PFC last month raised USD 750 million through bond issue under GMTN program. The bond has a coupon of 3.95% and tenure of 10.25 years. In line with our diversification goal and with this bond issue, we have been able to diversify our investor base by tapping U.S. markets. We saw close to 42% participation from U.S. markets. Now foreign currency borrowings are nearly about 15% of our total outstanding borrowings.Considering the increasing foreign currency borrowing portfolio and the risks arising out of the same, PFC is also actively focusing on hedging its foreign borrowing -- foreign currency borrowings portfolio. If we see, PFC has already hedged 67% of exchange risk for portfolio with residual maturity up to 5 years. Thus, we are persistently working on insulating our balance sheet from foreign currency fluctuations. Thus, our consistent efforts for diversification, both in domestic and international markets, has led to a reduced funding cost for PFC. I'm aware that in the last few weeks, some news articles are circulating, indicating the constant on PFC-REC merger, credit exposure limits and borrowing limits, et cetera. On this, I would like to clarify, as per RBI guidelines, the credit exposure limits for lending are linked to lending institution's net worth. Therefore, if merger is to happen, the lending limits will be seen on the total net worth of merged entity. Therefore, credit exposure limits are not the cause for holding up the merger. We also issued clarification to this effect. Similarly, we also do not see borrowing limits as a restricting factor for merger. The only deal breaker for PFC is the dilution of government equity stake below 51% on merger. We would like to reiterate that government intends to continue to hold management control in PFC and as well as in the merged entity of PFC and REC. Considering various options available, final decision will be taken. I hope I have been able to allay your concerns on the merger deal. And now we are open for questions.
[Operator Instructions] The first question is from the line of Gopal Agrawal from DSP Mutual Fund.
This is Dhaval here. Congrats on good numbers. Just a few questions related to some of the comments that you made, sir. To begin with, what was -- what is our status in Essar Mahan in terms of our exposure and the current status? And similarly, if you could highlight for MB Power, where are we in terms of resolution and our current outstanding exposure?
One, MB Power is a standard asset, and we are regularly getting payments. So there are no issues in MB power. As far as Essar Mahan is concerned, lead is ICICI Bank. We were running the process, but in between, we got an offer from ArcelorMittal, but it was not a firm offer. But again, ICICI is working along with other lenders. And the developer has been asked to give a commitment fee, at least INR 35 crores, to show his seriousness and firm commitment. So we are on the right track. And very soon, we should be able to crack this. Essar Mahan has got an -- a PPA in this pilot scheme for 260-megawatt. So it shows a positive development. And we have an exposure of INR 1,300 crores in Essar Mahan.
And in MB Power?
MB power is a standard asset, and we are regularly get paid around [indiscernible] maybe highest are INR 1,000 crores, maybe.
Okay. And sir, the other one was on our sort of status and resolution process on KSK Mahanadi and our exposure there? How is that moving?
Around -- we have around INR 2,500 crores exposure and RP has been appointed. I think RP has been changed. So the process is starting now in the NCLT. INR 3,300 crores exposure is there.
Okay. And the other one -- so this is NPA for us, right?
Yes, KSK is NPA.
Yes. And the other one was, sir, RattanIndia Nasik. Where are we on that in terms of status and our exposure there?
Amravati RattanIndia is already closed on 31s December. On Nasik, we are working. We are trying to retain 540-megawatt PPA. The problem we are facing in getting [indiscernible] guarantees from the banks. But continuously, we are making sincere efforts. And we have exposure of INR 3,000 crores in Nasik. We are also in consultation with Maharashtra government. Again, earlier also we tried. And now we have got some indication of some interest in Nasik again. So we are, again, negotiating with them also.
Okay. And lastly, sir, on Reliance Power, what is the status and our total exposure to the various projects?
It's standard. We don't have any issue. We have an exposure in Sasan, which is being operated at 96% PLF, cheapest power in India. So we are being -- getting payments on time. We have some exposure in distribution companies. It is also regularly being paid. So we don't have any issue at all.
And total exposure would be how much sir, approximately?
Around INR 1,500 crores, Sasan.
Okay. Sasan, okay. Understood.
And in discounts, around INR 1,000 crores. [ BSES and -- both Rajdhani ], INR 2,000 crores.
[Operator Instructions] The next question is from the line of Jai Mundhra from B&K Securities.
Sir, can you also talk about [ JPVL ] and Lanco, some of the exposures that you may have? And how do you see the resolution there?
In [ Jaypee ], we don't have any exposure. And Lanco Amarkantak is the only project of Lanco where we have exposure. It is in NCLT. And 2 units, old units are under operation. They have PPA, one with Haryana, one with Madhya Pradesh. And the process is going on.
And our exposure, INR 2,300 crores.
And our exposure is around INR 2,300 crores.
Correct. But are you seeing some resolution there?
Yes, very much. We have got some expression of interest from very solid parties. I can't share with you.
Sure. Okay. And secondly, sir, on some of the names like Jindal India Thermal, Coastal Energen?
No, we don't have any exposure in any Jindal company.
Okay. And Coastal Energen, sir?
We don't have any exposure, sir.
Sure. And sir, do you have any standard ICA signed up, such -- maybe those who are doing good, but they are under standard category and ICA signed, such as Bajaj Hindusthan or Lalitpur Power?
No, no. For -- we are not in Bajaj Hindusthan. But the standard ICA, when it was signed by the banks, we also signed there. But for a specific project, we are signing separate ICAs.
Okay. But you would not be with lenders, is that the understanding?
No, we are. Along with other lenders, we have signed. How can we sign alone?
Correct, correct, correct. So sir, what would be your portfolio of ICA cases where you have signed, such as Lalitpur Power or GMR Warora?
[ Neither are in ] GMR Warora nor in Lalitpur.
Okay, sir. But where would you be? I mean, what is your portfolio of ICA cases?
ICA -- RKM...
It is an NPA only, no?
NPA only.
You're saying only NPA.
In cases of NPA only, we are -- the projects, which are NPA only, in that case, we are signing.
Okay. So if you can name, sir, I mean, what is your ICA portfolio, even though they are -- NPA?
15 cases are in NCLT.
15 cases are in NCLT. Around INR 29,000 crores stressed assets we are having. Around 15 projects, we are trying to resolve outside NCLT and 15 projects within NCLT. So outside NCLT, wherever we are, so ICA we will be signing. If all lenders come on board, we sign. If they don't come on board, we don't sign. Outside NCLT, it's around [ INR 13,000 crores ] stressed assets.
The next question is from the line of Shashank from Tata AIA.
Is there any update on the resolution of South East U. P. Transmission?
Yes, it is yet to be admitted in NCLT. It is in NCLT Allahabad.
Okay. And are there some reports around...
We are getting payments for the portion which was commissioned, COD1. So UP is regularly making payment because they are using that line.
Okay. And has it been taken over by the UP stage government?
Not yet. [indiscernible] it is in NCLT. We tried our best, but we could not convince them. So we have gone to NCLT now.
Okay. And any update on Shiga Energy, Dans Energy? Because in one of their earlier calls, they had mentioned that these projects have started making payments. So have they been converted into standard category?
Not yet, but resolution process in advanced stage, I can share with you, and where we will get our principal as well as [indiscernible] good amount, I would say. It is in advanced stage of resolution, both the projects.
Sir, during the year, we got INR 70 crores in Dans and Shiga...
And during the year, we got INR 70.92 crore in Dans. And Shiga, also around INR 70 crores.
Okay, okay. And the presentation about the 6 projects that you had mentioned, and what are the time lines that we're looking at for the resolution?
Time line, some of them may be resolved by 31st March. Like this Essar Transmission, today, our Board has approved earlier. REC is the lead. They approved it. So it is resolved. Then I think one lender is also left, Axis Bank. They will -- in the next Board meeting, they will also approve. So this is done. Another one is this Haldia, IPG. It is a thermal project in West Bengal. So REC is the lead. They approved it on 4th. And today, we have approved it. So it is in the process now. It's a formality. Other 4 projects are RKM Powergen, which I mentioned that from 1st February onwards, they started supplying 550-megawatt power to Telangana. And this resolution -- our Board has already approved resolution plan and REC Board will approve in the next. And we are in touch with Bank of Baroda.
So only 2 only left.
So only REC and Bank of Baroda is left. I'm constantly in touch. REC has assured me that in the next Board meeting, it will be approved. Agenda is ready. I am in touch with CMD, Bank of Baroda also. They will also approve. So this is about RKM Powergen.Other one is Jhabua, in which NTPC is a successful bidder. We are preparing all the modalities, and we will go to NCLT. NCLT take 2 or 3 hearings to accept. So it is in the process. So another one is Jhabua. Other is Jal Power. It's a hydro project in Sikkim, and NHPC is a successful bidder. So all formalities are being completed. And I'm sure within 2 to 3 hearing, I think next hearing is on 14. So generally, NCLT is helping our experience within 2 to 3 hearings. So we may close by 31st March, or we may slip into quarter 1 also. I'm not giving you exactly by 31, but it is on the right track, I can say. Another one is Ind-Barath Utkal. It is also -- in this also, JSW is the successful bidder. So all modalities are being completed, and it should also be closed by 31st March or by first quarter of the next year. I think all 4 I mentioned? Okay.
Okay. So would it be fair to say that in the next 2 quarters or maximum 3 quarters, we can see all of them moving to standard category?
Yes, they will be out of my book, and my gross NPA will come down as well as the net NPA also. And my capital adequacy will also improve.
See, as we mentioned, the total gross NPA is around INR 27,000 crores. And the [ 6 projects ] itself is around INR 9,000 crores, which is around 1/3 of my total stressed assets. Today, we have that gross NPA over 8.34%. So 1/3 of this will be reduced, so ultimately, 5% and 5.5% will be [ NPA of ] the resolution of these 6 projects.
Okay. And specific to IPCL Haldia, if I remember correctly, in one of the earlier quarters, it was upgraded to standard. And then again, it moved to NPA category.
No, no, no. It was never upgraded.
Hope they'll open. [indiscernible] It might have happened.
The next question is from the line of Shankar Narayan from -- [ Rama Subraman ] from Deutsche Bank. Sir, your line is in talk mode, please go ahead.
Hello, can you hear me?
Yes, we can hear you. Please go ahead with your question.
Yes. So on your foreign currency borrowing target for this year, so you have increased it to USD 3.7 billion. So, so far this year, you have cumulatively borrowed about USD 2.8 billion. So -- which indicates an extra USD borrowing of around USD 900 million. So are you planning to issue a bond or a loan for this?
See, we have a total exposure of around USD 6 billion in foreign currency. And this year, we have raised -- USD 2.8 billion? This year, we have raised USD 2.8 billion. So what is exactly your question is?
So the remaining -- I think you have -- today, in the resolution, you have increased your borrowing limit to USD 3.7 billion. So that extra USD 900 million borrowing for this year, will you be doing it via bond or a loan?
See, that will take a decision, appropriate time. But what we have done is that we have taken additional borrowing power of INR 19,000 crores in this financial year. And on the basis of market conditions, we'll decide whether we have to go for an international market or on the domestic.
Okay. Got it. Okay. And on this merger, sir, if you could give us any time line, since there has been talk going on this from last April onwards? So like any rough time line, could you give us when this will happen?
Very difficult to give the time line. Our owner is Ministry of Power. And we were asked by Ministry of Power to appoint a consultant to examine the pros and cons and the synergies in merger and the issues involved. And we appointed Deloitte. Deloitte prepared a very comprehensive report on pros and cons and synergies. They made a presentation before PFC management and then in Ministry of Power also. We have submitted that report to the Ministry, and Ministry is examining. Ultimate call is to be taken by the Ministry. They are our owner. So I can't give you the time line. Time line can be given by Ministry, because ultimately, call is to be taken by the government, not by us.
The next question is from the line of Mahrukh Adajania from IDFC.
Sir, just one clarification. RKM Powergen is not an NPL, correct? It's standard?
See, in our book, it's in Stage 3. Because after this Ind AS, we are classifying 1, 2, 3. So we have classified this RKM in Stage 3.
Okay, sir. Sir, and the other thing is that there have been reports on Reliance wanting to sell out from their distribution company. The Delhi distribution, that is. Sir, any progress on that? Or anything that...
We are not aware. I -- like you, I also saw somewhere in the media reports that they are in the process of selling up, but we are not aware.
But they have to keep you in the loop, right, if you are a lender?
They will require our approval, but they have not yet approached us. I don't -- I have not seen any request. But it will be good for us if some good party comes. Like, I was told [ Adani ] and Torrent are in queue. Like you, I also came to know from the market. But [ still ] date, it is [indiscernible] asset, and we are regularly paying -- getting paid, no issue at all.
The next question is from the line of Punit Srivastava from Daiwa Capital.
Just some more clarification on the merger because line also got disconnected in between. Sir, you said that the exposure limits, which came in -- the news on exposure limits that came on the newspaper, that is not correct, right? That's what we heard.
Yes.
So the only issue is basically -- so that exposure limit of that 20% versus 25%, that is not relevant? And it's -- the only issue is that, of course, the government holding...
Exactly, exactly. Because that exposure depends on the net worth.
So I'm talking, sir, about the bank's net worth. Because the bank, there is a limit -- the RBI has a limit that banks cannot lend more than 25% to the group entities and 20% to the single entity.
That is true, that is true. There is -- for our borrowing. For REC and PFC, it was 20%-20% earlier. Now REC is my group company, so it is 25% now for us. And if it is merged, then it will be 20% because it will be a single entity.
But one thing which you have to appreciate is that my -- what is my total exposure? So then my total borrowing from the bank is around 15% only. Earlier, we were not borrowing from the banks, but only last year we started. So still, there's a lot of cushion is available to me and as well as to REC to borrow from the banks.
So basically, sir, that means the exposure by banks through bonds and debenture, will that be counted in 20% or not?
Most probably yes. But still, the banks are coming to us. They want to give the limit...
Mainly banks are still untouched. We have not tapped many banks.
And still the existing ones are coming to us and they're providing more facilities to us. So that exposure, as of now, I don't think there's any issue.
Okay. So that will not be problem. And sir, one...
[indiscernible] Lending, not borrowing. All the media reports were regarding lending of PFC.
Okay, okay. And one clarification we needed was that, assuming that the merger happens, what really happens with this INR 14,500 crores of investment? Will it need to be knocked out immediately? Or you can amortize it? Is it possible to get any clarification on this?
That rule of consolidation is very clear. If 2 entities are merged, then that -- this will be knocked off. That INR 14,500 crores is my investment, that will be knocked off on the reserves and the equity.
Okay. So it will be -- have to be knocked out immediately?
Yes, yes.
Okay. Understood, sir. And sir, this -- how much was the actual recovery in the -- this current -- recoveries -- out of the INR 1,700 crores, how much was the recovery of this amount?
Amaravati?
Amaravati, yes. Sorry. RattanIndia Amaravati, yes.
RattanIndia Amaravati. Around INR 4,200 crores, around.
I mean, sir, for PFC?
About 50%.
Around 50%. And we were not supposed to make additional provisioning because we had already made adequate provisioning.
Around -- that -- the write-off is around 40%. So by the way of cash and other OCDs, we'll be getting on 60%.
Okay, okay. So that's why, if you see the gross NPAs have come down by INR 1,700 crores but net NPAs have come down by only INR 800 crores?
See, we had a 50% provisioning, no. So the net will come out 50% of that only.
Yes. Okay. So it's because of that only. Okay. And sir, I just need to understand, you have around INR 27,000 crores of NPAs, and of course, INR 9,000 crores of recovery is also expected. But at the same time, the provisioning requirement may increase because of the aging of the NPAs. So if you can just give us some guidance on what kind of provisioning may be required in next year?
I think we don't expect any additional provisioning, because this provisioning -- average provisioning is 51%, and it varies.
See, now that this RBI rules tell about the provisioning on the aging basis. But now we are following ECL model. It is not on aging basis. It is on the basis of future expected cash flows, and we don't expect any further provisioning is required. We have made 53% provisioning and we feel it's adequate. And it is a reality also that whatever we have resolved, our own process, so whatever provision which we have made is sufficient.
Okay. And on this INR 9,000-odd crores of resolution, which you're expecting where you have made 47% provisions, which you say is adequate, what is the reason? Like you think because the haircut will be lesser than 50%? I mean, how have you estimated this, if you can...
See, we have no actual figures in our hand. The resolution is taking place. And we know the -- how the resolution is taking place, we have the figures. And we have worked out that whatever provisions which we have made is sufficient.
In all 6 cases, we have already reached the resolution. Formalities are being completed now. We know, in NCLT case, who is a successful bidder and how much amount we are getting. And in resolution, a restructuring plan, we know how much we are losing. So every number is with us. Only in all 6 cases, due formalities are being completed, and that process will take some time. That's why I'm saying either by 31st March or next -- by next quarter. We may slip into next quarter also.
Okay, sir. And just one last question on this RBDD, the amount has come down quarter-to-quarter. So can you just explain that, why it has happened?
See, what happens is that once that -- we write off. Earlier, we were making the provisions. So the 2 projects just settled now. So whatever the cash implications on that settlement, it has been now removed from RBDD has transferred to general reserve. That's why the RBDD is coming down.
The next question is from the line of Gopal Agrawal from DSP Mutual Fund.
Just a couple of more things I wanted to clarify. One was this -- any resolution on this Athena, Bhavanpadu and KVK Nilachal? And the other one was the status on Essar Turi, if you could just provide?
Athena one, that's East Coast. It is in -- NCLT liquidation process is on.
And we have made 100% provision, sir.
And we have made 100% provision in this. And KVK Nilachal is also in NCLT. In Turi, we -- fortunately, we did not sanction anything.
Okay. And sir, you mentioned around the resolution of India Power Haldia. So what was the resolution? I missed that part. So our exposure is INR 960 crores. But what is the resolution that we are seeing right now inside?
It is restructuring and [indiscernible] lenders -- REC is another lender. REC Board has already approved. This project has PPA with West Bengal Power Distribution Company, and they got hold under SHAKTI. So they are ready for generating power from 2 units. Third unit, they are not commissioning. So after restructuring is approved by all the lenders -- both the lenders. So both -- I think only 2 lenders are there, REC and PFC. So after that, they will start generating power.
Understood. And what would be our haircut in this case and Essar Transmission? Final ultimate write-off would be how much?
In Essar Transmission, there is almost no haircut because we are getting full principal, full interest except waiving of some penal interest. That's all. Project -- this Essar Transmission is a commissioned project, interstate transmission line it is. And they have got a tariff for Phase 1 from CERC and provisional tariff for Phase 2 also. So it's a commissioned project, and there are no issues.
On India Power Haldia, that -- any haircut?
It is not possible to -- but we have restructured it. The project will start generating. And we have extended that repayment period up to '42, '43. So I think, at this juncture, I will not be able to exactly quantify how much will be there, but we have made already sufficient provisioning.
We have made 31% provisioning.
31% provisioning is already there.
The next question is from the line of Jai Mundhra from B&K Securities.
Sir, can you specify the haircut or expected recovery from RKM Power, sir?
Sir, we have 45%. That is enough.
Very difficult to quantify, but fortunately, we have to see the positive things. Number one, 550-megawatt new PPA they got under pilot scheme. They have started supplying power from 1st February itself. Yesterday, I was in U.P. and requested them to make a payment for their receivables and to make certain arrangement. So for that -- you have to see the better side of this. So -- and maybe around [ 40 ] -- I'm not sure because we have restructured it.
See, we have already given you idea that 6 projects which we are resolving, that we have made adequate provisioning, and we are not expecting any more haircut on these projects.
Sure, sir. 40% to 50% should be a broad range, right?
We have already made 47% provisioning that we have already informed you.
Correct. Correct, sir. Okay. And sir, this -- you do not have any exposure to Rosa in Vidarbha, right? As you said.
No, sir. No sir. Vidarbha, REC has. In Rosa also, we don't have any exposure. Only Sasan we have, and their distribution companies.
Correct, sir. And sir, I mean, would it be possible for you to share the rest of the projects? I mean we have, let's say, 15 plus 14, 29 projects which are under stress. And you have mentioned about the 6. And you probably have mentioned a couple of the names. But would it be possible or to...
Others, we are trying like -- some of them we are trying outside NCLT. Shiga and Dans Energy, these are commissioned projects, hydro projects. Last year, we got INR 70 crores from Dans and also INR 70 crores from Shiga also. So they are in advanced stage of resolution, I can share with you. Similarly, KSK Energy is in NCLT. And RP has already been appointed. The process is starting now. Since NTPC has come in Jhabua, they may be very keen to take over this KFK also. So we expect a good competition. Now good players and buyers are available in the market once NTPC has joined the race.
Correct. And sir, just the last question, sir. This Essar Transmission, you said that the resolution plan is the restructuring by the existing borrower, right? Is [indiscernible]
So REC and PFC and Axis Bank. Today, our Board has approved it. REC Board approved it earlier. So now after Axis Bank approves, it will -- it is done.
Correct. No, no, I'm saying the resolution plan is the restructuring by the existing borrower. So probably, you will be able to...
Yes, yes, yes.
So until -- unless you receive the 20% of the payment, you probably will not be able to reverse the provisioning. Is that understanding correct or no?
See, we have to examine from that -- this Ind AS accounting point of view, and then we'll take a decision accordingly.
The next question is from the line of Mahrukh Adajania from IDFC.
Sir, I also wanted to check on RKM Powergen. That's also restructuring, right? So when do we upgrade it?
Yes, correct.
According to the Ind AS guidelines, we will see.
See, once that resolution takes place, then we'll see that -- what are the guidelines. And then accordingly, we'll show in the books of accounts.
Thank you. Ladies and gentlemen, due to time constraint, that was the last question. I would now like to hand the conference over to Ms. Shweta Daptardar for closing comments.
Thank you, Faizan. On behalf of Prabhudas Lilladher, we thank Power Finance Corporation team for the opportunity. Thank you all.