PTC India Financial Services Ltd

NSE:PFS

Earnings Call Transcript 2022-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to Q3 and 9M FY '22 Earnings Conference Call for PTC India Financial Services Limited hosted by Essential Technologies. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Abhinav Goyal, Vice President, PTC India Financial Services Limited. Thank you, and over to you, sir.

[Abhinav Goyal, executive]

Yes. So very good afternoon to all. So first we apologize our investor for delaying results, which was due to unprecedented circumstances, which may be aware to you all. So today, we are having Dr. Pawan Singh, our MD and CEO and a team of our senior officers namely: Mr. Vijay Singh Bisht, who is Executive Vice President, Head [indiscernible]; Mr. Sanjay Rustagi, who is Senior Vice President and Head Finance; Mr. Sitesh Sinha, Senior Vice President and Head Credit; myself, Mr. [indiscernible] who is Assistant Vice President and Head Monitoring; Mr. Ankur Bansal, who is heading business development, Assistant Vice President; and Shri. [indiscernible] Assistant Vice President from legal team.

So now I request our MD and CEO to fairly guide us the results. Over to you, MD sir.

[Pawan Singh, executive]

So thank you very much, and sorry for the delay both in terms of today's the technical glitches we had and also the delay in the presentation of result because of some things beyond control of management and company. It do happens in the life of some organization that sometimes some glitches do happen, probably that becomes a probably turning point for the organization that is the way we look at it. And at least, we are happy today that we are back to you with our December results to start with and shortly we're coming with March results also once this is over.

So quickly coming back to the performance of the company up to December and 9 months. So I would like to say that for the quarter, which went by, certain highlights I would like to put. One is that the total income was INR 241 crores and interest expense was INR 136 crores, and the company had a net interest income of close to INR 88.50 crores. We made less profit compared to the preceding quarter, and also comparison to the quarter -- same quarter in the previous year. And that was not because of anything else, but primarily arising out of the -- because there was no further slippage this quarter because of a very confirmative provisioning which we did in the current year.

And as we go through, me and my team will explain the detail why we did it and what is the potential of that particular main -- asset value we decided [indiscernible]. So against impairment on financial instruments, that is -- which we did INR 17.22 crores in the preceding quarter. We did a provisioning of INR 83.61 crores. So if I take net-net, net of provisioning and if I have to compare the numbers, the numbers would have been in fact, reflective of this previous quarter, which went -- the preceding quarter which went by and substantially better than the earlier quarters.

So as far as the operational performance is concerned, minus the fragmented provision, we have -- in this quarter, we continue to do well. And if I have to compare with the corresponding quarter on several operating parameters, so my cost of funds came down from 8.39 to 7.54. And the spread was, of course, flat 2.86, 2.80. So we maintained the spread. And the NIM has gone up from 3.53 to 4.02. And of course, the debt equity ratio is fairly improved 33.36, which gives us additional room for expansion. And we have brought down our gross NPA from INR 895 crores to INR 820 crores in the current quarter. And similarly, net NPA has come down -- compared to net NPA has come down from INR 453 crores on the corresponding quarter of the last year to INR 253 crores. And today our net NPA stands at 2.71%.

Some of the assets, which, of course, are known to all of us have got resolved in the fourth quarter, especially in the analysis. So that amount should go from by both gross NPA or net NPA, so roughly about INR 125 crores will go out of my net NPA. That should mean that my net NPA would be almost half of what it is today because roughly about 200 -- close to INR 250 crore is my net NPA and INR 125 crores is -- how much is the realization, Mr. Bisht, exactly?

[Vijay Bisht, executive]

INR 127 crores [indiscernible]

[Pawan Singh, executive]

[indiscernible] so almost 50% of the same quarter net NPA. And correspondingly, the amount which is strong in the gross NPA, the total outstanding loans, which is amount INR 206 crores, that will go out of my gross NPA. So similar improvement will be seen on the gross NPL.

Also it is very important to note that from this quarter which went by, 6M, somewhere in the middle. So we'll start getting the yield income also on this particular loan. We did 1 loan account will dealed in detail, which is ILFS, where we made a curvative additional provision, but that is also on a very advanced stage of resolution. And on the financing [indiscernible] and ILFS has filed a petition with NCMT, which bottom of hearing has started and final hearing is up and now for converting into [indiscernible]. What does it mean? It means that debt servicing will start for the business -- for the lenders. And also, since they have already closed to INR 1,500 crore line in the P&L and recent government of India measures to scale up support to power plants. So additional liquidity in revision, PPA support, imported [indiscernible] is also been provided. So we are quite hopeful that the cash flow from ILFS should start and already lined it, and 10% will come to us [indiscernible]. Will start happening very shortly may be, hopefully this quarter, that should happen.

So this is where we are. And we are happy to report at least, on the front all our efforts, which have all these ways we have been putting, we have been able [indiscernible] detail of how we have resolved. So we are now almost coming to close. There have been no slippages in recent past, especially none of our accounts in last 4 years have turned into NPA. So that is the plus point which we have got. And we continue to focus on being sustainable infrastructure finance company. And carbon asset portfolio gradually is coming down of the total loan book.

New areas, new ways in green infrastructure, a large pipeline and opportunities we did first electrical mobility project, which was inaugurated by Prime Minister last year in UP, which we did 350 buses. And a lot of new mobility in especially 2-wheelers is happening. And the manufacturing, as well as also on the aggregation there is a huge credit demand which is coming. Waste to energy, waste management is another area which is coming up in a big way. And team mobility is going to have a [indiscernible] status growth. And not only the product that vehicle which we are going to finance to the aggregator, but also, the value chain, the manufacturing support system, all that also has taken up the project pipelines. In fact, today it is -- as much as my renewal pipeline, which is my main stake, I'm starting formating proposal from the e-mobility side. So we are looking forward to a great upside in this area in business. And our Board has started operations and we have a pipeline of about INR 2,500 crores under sanction at various stages.

So this is the overall view and picture which I've given. And I'll ask Sanjay to add on to financial figures, which I have already said, he can add on to that. And we will be happy and my entire team is there from business development, from monitoring, from credit, from legal side, operations side and we'll be happy to answer any of the queries. And I'll also support my team, whatever is required. So thank you.

[Sanjay Rustagi, executive]

Hi, good afternoon to everyone. I'm just giving the financial highlights for the quarter ended December 2021. First ones is comparing the numbers of Q3 '22 versus Q3 '21, it means the current quarter versus previous -- same quarter of the preceding year. The total income for Q3 '22 stood at INR 241.09 crores, as compared to INR 269.39 crores in Q3 '21. Profit before tax for the Q3 '22 stood at INR 9.50 crores and INR 6.93 crores as compared to INR 32.90 crore and INR 20.85 crores, respectively.

The yield on the earning portfolio stood at 10.34% in Q3 '22. The debt equity ratio is at a very comfortable level at 3.36%, and it has improved from 4.09% this same quarter last financial year. The net interest margin on the portfolio has improved to 4.02% as compared to 3.84%. The special spread -- sorry, the spread earnings portfolio for Q3 FY '22 stood at 2.80% as compared to 2.86% [indiscernible]. There is a lot of improvement in the cost from borrowing and it has been reduced to 7.54% as compared to 8.39%.

And if we compare this financial number of Q3 '22 versus Q2, the previous quarter, that is September ended '22 -- '21, the net interest income stood at INR 88.56 crores as compared to INR 89.60 crores. The total income for Q3 stood at -- our profit before tax, PBT, stood at INR 9.50 crores as compared to INR 69.96 crores. Profit before tax (sic) [ profit after tax ] is INR 6.93 crores as compared to INR 52.47 crores. The cost-to-income ratio has been improved to 11.23% as compared to 12.16% in the previous quarter.

And if we summarize the 9 months ended this financial year versus the last year -- financial year, the net interest income for 9 months stood at INR 257.47 crores as compared to INR 256.44 crores. The total income from 9 months stood at INR 737.38 crores as compared to INR 864.91 crores. The profit before tax for 9 months is INR 140-odd crores as compared to INR 123.96 crores. The profit after tax has been improved to INR 105 crores for 9 months as compared to INR 79.27 crores. The yield on the earning portfolio stood at 10.62% and the net interest margin is 3.99% as compared to 3.53%. The business disbursement in the 9 months stood at INR 3,508 crores. The portfolio as on 31st December 2021 is INR 9,836 crores. And capital adequacy ratio is INR 22.50 crores (sic) [ 22.50% ].

These are the financial highlights for the period ended December '21. I'm handing over the mic to MD sir.

[Pawan Singh, executive]

Yes. So I'll ask Mr. Ankur Bansal, who is head of business to give you a short snapshot on the business growth and how are we positioned on the business side.

[Ankur Bansal, executive]

As Pawan already highlighted, so we have a pipeline upwards of INR 2,500 crores. Inside the pipeline, the approximately would be around INR 3,500 crores to INR 4,000 crores as on date. And we have been focusing on diversified sectors like stores, state board logistics, manufacturing of electric vehicle, electric mobility, water, base management, ethanol manufacturing, et cetera. So our focus is both on the conventional infrastructure sector along with the fund rise and sustainable financing sectors also.

Apart on that, [indiscernible] has obviously known to be nimble and nimble in its approach. So accordingly, we are focusing on a lot of -- a lot of companies in the fund rise sector, and we're also supporting upcoming companies in sectors like EV, water and waste management, which need to grow capital to grow in future. So like -- and we also believe to be having a first new advantage in new sectors so that we are able to make good yields in these sectors and which also gives us good visibility and a first mover kind of a tag in these upcoming sectors.

Apart from that -- apart from diversified sector, we were always focused on diversifying products also. So apart from traditional project financing, we also focus a lot on structure funding, wage, loan, short-term working capital loans and revolving efficient finance kind of loans, which helps us -- which gives us visibility in terms of diversification of the product, as well as it also helps us to improve the yields on our portfolio, which MD sir has just highlighted, it is around 4% margin we're earning on the yield portfolio. And then we are also looking to -- we're also looking at some marquee deals like recently Adani has been given this Ganga Expressway project, which is the longest expressway in India in UP. So we are also evaluating that project, and we are looking for funding in that role split.

So going forward, like as highlighted that our focus would be on diversification in our sectors as well as diversification in our products, which we have been doing in the past. And being a nimble organization, we would support companies in these growth and company sectors so that as these companies grow, we will have more funding opportunities in these companies. And on EV sector specifically, we have a pipeline of around INR 900 crores. And in EV sector, apart from funding companies having concession agreements with the state government, we are funding the entire value chain of EV in terms of supporting companies in manufacturing [indiscernible] into supporting companies which do easing of EVs for various SMPB companies, et cetera. So we are funding the entire value chain of EV sector, and this is giving us a very good visibility on this sector going forward.

With that, I'll hand over the mic to MD sir for any...

[Pawan Singh, executive]

Thank you, Bansal. And now I'll request to Mr. Vijay S. Bisht to give a little bit snapshot on the work he has done on the stress asset resolution. So very short, I'll request him to be as brief as possible so that we have more time for question answer.

[Vijay Bisht, executive]

Thank you, sir. Though our company was going through issues which was not under our control. But still, we were active in the evolution of stress accounts, and we have been fairly successful. As MD sir has already pointed out, we have already resolved analysis, which will be getting reflected in the Q4 results, where we are out of INR 206 crores of the total amount, we are -- we have already got INR 127 crores, the total revolution amount INR 134 crores, which is as per the book value. So that has resolved in Q4 so the positiveness will flow in the Q4 results.

Secondly, in the NSL, which was in the news in the recent past, we have got a very positive verdicts in the favor of PFS. If you could remember that in this, the reservation process under NCLT was going and where we have appealed again NCLT decisions and feel that also what is went against PFS and then we will appeal in the Supreme Court. We have gone to the Supreme Court. And after a long time, the Supreme Court after the last this was discussed in the Supreme Court in the month of December 2021, and after 5 months, under the Supreme Court has come up with a landmark decision. This is going to help other lenders also wherein the PFS stand was positively linked. And now going forward, PFS would get a seat in the CEC.

In fact, of this decision is that, that we have got a lot of this collateral in this loan account, like the check bounce in case INR 125 crores, plus promoters guarantees, plus personal guarantee of the promoters. Now it will go all out against this old account, wherein we will be very aggressive in taking back our loan. So it is a very positive development. And going forward, we assume that this case would go in our favor.

The protocol, which was -- where there was some development was under justice where =which was beyond the control of the group, it was due to the promoters' problem. Otherwise the plant was operational from 2015 and '16. And in this recent [indiscenrible] supply, there has been a lot of issues in the power front. This class was somewhat on the stock mode in the last 3, 4 months due to the high cost of imported coal. But after this development [indiscernible] the Ministry of -- the government of India has pitched in wherein they have taken a few decisions in the month of May. That is the -- all these variable costs have to be passed through and PFS has also increased around INR 350 crores under liquidity in this scheme plus -- and this could result having a long [indiscernible] around INR 3,000 crores. They have also agreed to pay around INR 75 crores every week till up to INR 1,500 crores.

So in 5 months, TANGEDCO would be liquidity around INR 1,500. This is apart from around INR 1,500 crores, which is in line in the PRA, which is subject to once [indiscernible] gives a green signal, it gives a decision on the conversion of the category from amber to green, that amount would flow through the entire vendor. And since the first bullet of this plan has already started working, and it has started supplying power through TANGEDCO at a positive rate.

So these are the products and there have been small, small developments in other accounts also, like in the case of Athena Chhattisgarh, where the Vedanta has built this at a cost, which is more than the liquidation costs. So we will be getting more than what is less in the book value. So it is again a positive development which will come in the subsequent quarters. And I think in the case of stress accounts, as of now, we say, we are in a very good position, which was there 3, 4 years back. There it was around INR 4,000 crores more than a stress account, now it has come down to around INR 600 crores to INR 700 crores, taking into account of NRS.

Thank you, sir. Now back to Pawan.

[Pawan Singh, executive]

Before we just shift to Q&A, just on the liquidity position, I'll request Abhinav to just to be very brief to give you a snapshot of [indiscernible].

[Abhinav Goyal, executive]

Yes. So very good afternoon. So the company is having ample liquidity in terms of available credit lines, it's more than INR 1,000 crores, and we are maintaining an adequate more than INR 600 crores. So that money is not only sufficient for meeting our immediate disbursal [indiscernible] but also to meet any liability, any contingent liability, and any unfortunate liability in near future. Now, as we got 2 new lines, we are into discussion, although they are insisting for having a yearly financial, but yes, we are in discussion and they agreed to move it further to a certain level. And in between the requisite formalities -- other formalities I mean to say, we will have to be completed. And we are not visualizing any challenge in terms of liquidity as of now for the company.

Over to you, sir.

[Pawan Singh, executive]

Yes, thank you. And, Sitesh, would you like to say something about [indiscernible] appraisal just, very sharp, very briefly?

[Sitesh Sinha, executive]

For Q3, our sanction and disbursement was has exceeded for the last 3 years, you see the number. We have done the remarkable number in terms of sanction and disbursement, which was -- sanction was stand-alone in Q3, it was INR 1,851 crores, and disbursement was also INR 1,821 crores, which is much, much more than the what 3 years we have done it. And taking together all this Q3, our sanction number was INR 4,150 crores and disbursement -- gross disbursement was INR 3,507 crores. All of these, as Ankur Bansal has explained, and now Dr. Pawan Singh has also explained that most of the exposure in this Q3 and this FY '21, '22 through Q3 was mainly into renewable and especially new sector. We have finally -- after talking, we have disbursed in the electric vehicle that Mr. Modi has inaugurated in UP. And another road project we have done is INR 930 crores.

And in the sanction side, we have also explored a new sector, which is very marquee projects in airport sector, which is a Goa International Airport. We have sanctioned it and very soon it will convert into disbursement also. So that is being developed that GMR. So these are all about what we have done until Q3 sanctions.

[Pawan Singh, executive]

Yes. So thank you. So now we will go ahead with the Q&A, and we'll be happy to answer any of the queries.

[Operator]

[Operator Instructions] We take the first question from the line of Harshita Gupta, an Investor.

[Unknown Analyst]

So what I wanted to check was, is the company looking to diversify into the business segment? Also when will the company will be back to normal business operation?

[Pawan Singh, executive]

Yes. So I'll just give a brief answer, and then I've ask Ankur Bansal to give a detailed answer to this. So we are already back to normal business. So we are taking credit cases to our Board for sanction. We are doing appraisal, we are doing business [indiscernible]. And as far as the pipeline goes, Mr. Ankur Bansal will give you details as to what are the pipelines.

[Ankur Bansal, executive]

So, ma'am, as we have a pipeline of more than INR 3,500 crores around it. And this is into diversified sectors as I already highlighted into sectors like airports, roads, sports, logistics, renewable energy, water, waste management, electric mobility and also into upcoming sector like ethanol manufacturing. So as long diversification of -- so why we have this pipeline in place? So -- and we have been doing this diversification since last 2, 3 years.

Along with that, apart from diversification of the sectors, we also have a very nimble approach towards various plans. So we are doing innovative financing structures also, like the regular credit funding, and along with that, we do structure funding at [indiscernible] level, revolving construction finance, which is very -- which has proven very helpful for fast-growing companies in these sustainable financing sectors. We do credit funding also, last month capital funding. So we have been -- so apart from diversification in sectors, we have been providing an entire gamut of services to our various clients. So -- and then we -- and then this is basically helps the company to maintain good margins on its portfolio because the structured loans and the innovative financial structures gives good yields to the company and also good visibility.

Apart from that, we like -- as we told that PFS has always believed in having a first mover advantage in all these sectors. So we are also supporting the upcoming company, which maybe small in scale in price as of now in the sunrise sectors like electric vehicles, water waste management because we see a lot of traction in these sectors. A lot of the investors like LTi Refund, LTi Ventures and Namura, et cetera. So we -- these are funding these sectors. So these companies have a lot of growth opportunities. So as we go along the entire value chain with these companies, we also plan to have more finding in these sectors. That's from myself.

[Unknown Analyst]

One more question. So what is the impact that IL&FS had on the financial performance of the company and why was the fraud was not reported earlier, why now?

[Sanjay Rustagi, executive]

Yes, in the Q3 '22, we made a provision of INR 29.50 crores pertaining to IL&FS Tamil Nadu. So INR 29.51 crores of provision we have made in this quarter.

[Pawan Singh, executive]

Yes, but your earlier question, I think still needs to be answered because you said why. So because the fraud got declared only in February 14, so that is how it happened in this quarter. So earlier there was no fraud, which was declared. But also let me tell you though the fraud has declared but it is an act of the previous promoter of management. Now the promoter has already changed and the promoter -- change of management has been recognized by the RBI also and the restructuring also has been approved by the RBI. Even the NCLT in principle has approved the restructuring plan, only some modifications to the restructuring plan have got to be reapproved by the NCLT. So as far as the new management is concerned, it is basically Government-backed management who has taken over IL&FS. And the restructuring also has been approved by the RBI.

[Operator]

[Operator Instructions] We take the next question from the line of John Matthew, an Individual Investor.

[Unknown Shareholder]

So what was the change in terms and conditions of Patel [Darah-Jhalawar] ? And how that product is performing? And what is the impact of change in condition on the financials of the company?

[Pawan Singh, executive]

As far as the status of the Patel Darah that is a road project of NHAI in the Rajasthan. So this company has done the construction of about 90%, and they have been recently awarded 3 COD certificates. That means company is now eligible to receive the annuity payment since July 2022 onwards. So as far as there is no change in the financials of the company, the conduct of account in our books of account is a standard account, as well as the project has been commissioned as per the time line given by the NHAI. So there is no -- there was altogether delay for more than 6 months basically on account of COVID-19. So this is the status of account. Number two, related to the change in the disbursement condition. So what we have analyzed and there is no time in the predisbursement condition. The condition -- allegation of the earlier ID's was that we have shifted the particular requirement from predisbursement to other conditions. So that was observed. It has been -- it has been verified by our internal legal team -- external legal team and third-party also. It is captured in the loan agreement as predisbursement condition, and that particular condition was complied before our execution of [indiscernible] agreement.

[Unknown Shareholder]

As you mentioned, allegations of ID, we have gone through all the allegations of IDs, and these were their operational issues. So what was the experience of IDs in banking sector? And what is the actual issue due to which IDs resigned? If you could highlight on that.

[Pawan Singh, executive]

See issues are already there in public domain and its a historical issue now. So it happened in January. So it is probably in public domain and some of the points that you highlighted now, in fact in the previous question, one of the issues were also raised -- we have answered it. And as we rightly said these are operational issues which have been settled.

[Unknown Shareholder]

So has the IDs pointed out the issue of corporate governance earlier any time before their resignation? If yes, then how many times?

[Pawan Singh, executive]

No, we have never counted out. In fact, in October itself they have -- in August they have said the corporate governance is good in this company. And in October, one of the points raised by them was information flow and on that they have given excellent rating. In fact, in month of November, one of the IDs was coming to an end and has applied for extension [indiscernible].

[Unknown Shareholder]

I have one last question. There are media news of some KPMG report about appointment of Director, Finance. So what the report is and that it stays? And what was the experience and qualification of Shri Ratnesh selected as Director of Finance.

[Pawan Singh, executive]

No, I think whatever you have read in media is available in media -- media must have done its work and put it in the public domain. So as far as we are concerned, since this is confidential it will be difficulty for us to share, but the fact is that Mr. Ratnesh's connection -- there [indiscernible] around that, and that is why the connection, his connection could not take place. Normally, we follow transparent process for [indiscernible] and the next election of [indiscernible] very shortly through an open transparent process of advertisement with proper determination of NBFC banking background and with proper qualification.

[Operator]

[Operator Instructions] Participant with caller ID 9993058777, please go ahead with your question.

[Unknown Analyst]

This is Sunil. As I have observed, portfolio of the company is on declining trend, and we understand that the company is not doing any business for quite a few months. If I'm not wrong, maybe from January 2022. Someone just mentioned from the management team that the company has adequate liquidity. So my questions are 2 questions about this. Why the company is not doing business despite adequate liquidity. And second, what are the growth plans for FY '23?

[Pawan Singh, executive]

See our September '21, our book size was close to 9,299 crores, close to 9300 crores. In December '21, we have increased our book size to 9,800 crores because there was no declining in the previous quarters. So that's why the Q3 was incremental. We have done the growth in the Q3. As you rightly said, post Q3, very few business -- we have not done business in Q4, so that is the situation we have. We have not done any business.

[Sanjay Rustagi, executive]

So fourth quarter was something which -- because of this special situation which got created, we could not do business. Now we are back to business again. And our Board is taking up the proposals. So we'll make up for whatever one quarter we have lost. I wish -- because the way we were going about it, we would have this -- because as Mr. Sitesh was telling, on the loan sanction for the 9 months, '21, '22, this INR 2,069 crores, we did INR 4150 crores. And again disbursement INR 1,316 crores we did INR 3,508 crores. So this is the highest possible growth we have ever achieved. 100% in sanctions and 166% in disbursement.

We are in a very different mode. And so fourth quarter would have had a similar spectacular kind of performance. But that was not to, but that was offset by the good work which we have done -- quite a bit by the good work we did in the preceding 3 quarters. Now we are back to business so we'll make up for this one quarter very shortly -- maybe in a quarter or 2.

[Operator]

We take the next question from the line of [Saumit Mehta from Mehta Advisors].

[Unknown Analyst]

Yes. Sir, could you share some light on why SEBI has put a bar on appointment of new independent directors without a forensic audit?

[Pawan Singh, executive]

Yes, so it has not put a bar. So I think we should read the language the way it is written, and it says that you can appoint the directors only after the forensic studies are completed. And not only that, they've also asked for a report from the holding company, because holding company also is preparing a report on this. And to my information, because it is the holding company's matter, it would not be proper for me to comment on that. But whatever relative information I have, that should also happen quickly. So they have said that you can do it only after these two things are [indiscernible] .

[Unknown Shareholder]

So could you tell me if there is an overall impact of this issue of resignation of these independent directors on the financial performance of our company?

[Pawan Singh, executive]

See, we were just mentioning that the way we did 9 months, 1 quarter, we could have done -- which could have been -- because last quarter is the best quarter for us as a company and especially the last quarter is where we do the maximum. So the way we were going ahead, we would have done -- it would have been a magnificent year for us. Nine months, of course, was magnificent, but this could have been even more magnificent. But that we lost out. Other than that, yes, we continue to -- as I said, we will continue to make up for what -- part of it got offset by the 9 months performance which we did and whatever we lost, we will try to make up in the quarter.

[Unknown Shareholder]

So my next question is based on those lines only. So due to all of these impacts, did the bankers of our companies put in bar on our credit lines. Like how many credit lines are available at this point?

[Pawan Singh, executive]

Abhinav has very aptly clarified on this, I again request him to amplify this.

[Abhinav Goyal, executive]

Yes, so although bankers have also taken the cognizance of the situation and they have asked certain information, which we provided. So time and again, they are asking, and I sense they may require to take some internal approval. But as and when the funds are being required by us, they are supporting us and they have released the funds to us. In addition to that, we are having more than 600 crores, which I just mentioned, just 15, 20 minutes back, more than 500 crores to meet any contingency. So in terms of liquidity, we are quite comfortable and with 600 crores in addition to the normal cash inflow which we used to receive on a monthly basis. And again, we are having a credit lines of more than 1,000 crores, which is [indiscernible]. So bankers are quite supportive. They support us as and when required. Although as of now, we have repaid that, you will see [indiscernible] May, we have repaid 150 crores to one of the bankers because we are facing excess liquidity. So that way we are quite comfortable.

[Unknown Analyst]

And sir, lastly, I have one more final query. The credit rating agency has put the rating of a company on watch. Like on what basis and the position -- the rating agency has taken this position?

[Abhinav Goyal, executive]

Yes. So this is a kind of unprecedented situation in the corporate -- so we were also not knowing the situation. We were also not knowing situation. So they have put in a rating on watch. So they will continue to watch our situation and the subsequent development. The good part is that none of our credit rating, we have asked that they are considering adversely our rating or they are deteriorating it. And they used to ask our liquidity position on maybe every month or two, which we used to provide. And I believe that we are quite comfortable with the rating.

[Pawan Singh, executive]

Actually, I'll just add to what Abhinav has said. Just, one is, of course, the liquidity position is very good. And also, like, for example, the overall business scenario, distressed asset resolution. So as I said, the net NPA is going to come down to a little over 1% in the next year. So distressed asset resolution, then we talked about the NSL case, where already we have an offer of 90 crores. So with the Supreme Court order in hand, we hope to do better than what we have got at hand. And we hope that this also should get very quickly. We have already flagged this issue before the new board, and we are quite hopeful that a good decision on this will be possible and recovery on account of this will be deployed. So then as far as the operating margins, et cetera, are concerned, we continue to do well. All those things are taken care of. Nothing adversarial has come from any regulatory body. And all these things give us quite a bit of optimism and hope. And as I said, that new pipeline is waiting for us -- so we are not only going to do business as normal, but we are going to do business better than what we used to do.

And of course, it goes without standing that we are -- my parent has 65% holding, has a very strong backing on us. And the parents has a very strong support from all Maharatna companies of India and with a strong backing. And backed by counterparty on the back side is also the Government behind that. So all that support is available to us. So I feel that, that's good enough for us to move forward and get over this blip which has happened.

[Operator]

We take the next question from the line of Sarvesh Gupta from Maximal Capital.

[Sarvesh Gupta, analyst]

So what is the status of the forensic audit right now apart from the Stage 3 NPAs, which you gave the information about, what is the likely provisions that we may end up making because of the findings of the forensic audit as per your best knowledge as of now?

[Sanjay Rustagi, executive]

Forensic auditor has been appointed, and as you are aware, we have already informed the SEBI as well. They are going to start their work very soon. And we are expecting the report in the month of June.

[Sarvesh Gupta, analyst]

Okay. So basically, only after June 2022 results, will we come to know what is the additional provisions, if any, which is required to be paid, even the forensic audit.

[Sanjay Rustagi, executive]

Yes. As far as we are concerned -- in our view, we have taken on the new configuration of the local tax.

[Sarvesh Gupta, analyst]

I'm not able to hear you. Can you please speak up.

[Sanjay Rustagi, executive]

What I'm saying as a management, what are the available factors there, we made the provision accordingly. We are not expecting something extraordinary provision which will come.

[Pawan Singh, executive]

Just to add to what Sanjay said, see all these doesn't happen overnight actually. See all these things are complicated, it means that my auditors wanted a comfort from a third-party forensic, and that is why we voluntarily need to do that. But it doesn't mean that the internal auditor -- we have a reputed firm for internal auditor, and also a reputed firm for statutory auditor, it doesn't mean that they don't vouch for -- that they don't look into our accounts and all that. And all this years also the accounts have been seen by them. As I also said, the regulatory parties also have done their own verification, and we have not heard anything from them. So what the CFO is saying that there will be no major impact [indiscernible]. In any case, if you are talking about the 3 accounts, which were largely talked about. In NSL, we have already told you that we were backed by a Supreme Court order. So in fact Supreme Court order will prevail over everything. Number two, in case of Patel [Darah-Jhalawar], the creditor has already explained. There is no overdue, no issue of -- no change of terms and conditions. So there is no issue, and it is an up and running NHAI project based on annuities provided there will be a provisioning so that is one. In case of NSL, in any case, it's going to -- we are going to get money because 100% project we've already done. The third case is IL&FS, where we have, as a matter of conservation because -- see what happened is that in case of IL&FS, though it is going to turn from [indiscernible] and that is how everything will start. And though, all the -- Mr. Bisht had explained the status of the power project, how it is improved with the thermal crisis going on in the country, how imported coal has been allowed to be passed through, how liquidity infusion has happened. So despite all that, we have made, in fact we have made -- whatever -- most conservative provisioning which was possible and we have provided for it. So these are the 3 accounts we have talked about. So by and large, these issues have been already addressed. So yes, of course, -- this has been a little unprecedented decision which has happened, actually this has happened. Of course, everybody is trying to create safer than what has been more than safer. So we are playing by it, we are agreeing to everybody's request for whatever they are looking into, whatever audit or whatever -- we are cooperating with everybody and we -- that is why nothing adversarial has come to us so far.

[Operator]

We take the next question from the line of [Harshita Gupta from an Investor].

[Unknown Shareholder]

So I wanted to check that we have heard that the management does not have any HR powers. So is that true? If not, then who takes the HR decisions of the company.

[Pawan Singh, executive]

Yes those HR powers now have been [indiscernible] by the board.

[Unknown Shareholder]

Okay, and why is the position of appointment not published publicly to attract the best talents of the industry? Are there directors who had internal connection in the company?

[Pawan Singh, executive]

It would be very difficult for me to comment on that. So I would say that as I said earlier also, we are going -- we will follow a transparent process and we'll follow open transparent, well-defined qualifying requirement, very well-defined eligibility criteria, giving adequate notice and we will build action shortly.

[Operator]

As there are no further questions, I would now like to hand the conference over to Dr. Pawan Singh for closing comments.

[Pawan Singh, executive]

Thank you very much that today. And I'm so glad that we had some questions that were very open and frank and candid and -- from our side, we try to take that. Also, we reiterate that as far as the balance sheet goes, we are in terms of both operating parameters as well as in the quality of assets, we are far better than what we were. And in terms of pipeline and direction of business, also we have far more conscientious now. And all other stressed assets which were there, and we have been very able team of -- stress management team has been able to bring it down. And all that has been the legacy issue. It has not been issue of present. In present we do good business, we do sustainable business. We do business with a clean governance companies. We do business with the green promoters and we'll continue to do that. And that is our policy and with good pipeline -- good thing has happened that there's a lot of promise clarity on infrastructure, which also helps in the quality of loan assets. We'd like to appreciate government and regulators for having made so much of evolution, and so fast and so quickly in the last few years that makes for us much easier to do business or do lending activity, and especially our commitment to Prime Minister's commitment of Climate Change. And we have also committed to make ourselves as green -- green infrastructure, a sustainable infrastructure finance company. And the kind of pipeline which is now available in this area, we will continue to grow. And what we showed in 9 months, probably in the next 9 months or so, we will try to beat that record, and that will be our endeavor.

[Operator]

Thank you. On behalf of Essential Technologies, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.