Gujarat Industries Power Co Ltd

- Total capex for Khavda project and park development is INR 3,780 crores (INR 600 crores for park development first phase and INR 3,600 crores for the solar project). - INR 600 crores of park development capex to be incurred by FY25; INR 180 crores equity share from GIPCL. - Solar project capex of INR 3,600 crores funded roughly 25-30% equity (around INR 2,000 crores equity) and 70-75% debt. - Available cash generation of INR 400-500 crores annually; INR 600-700 crores cash on hand; equity funding gap to be raised via rights issue, QIP, preferential allotment, or promoters’ contribution. - First 600 MW solar capacity commissioning expected by November 2024; full 1,200 MW first phase capacity by December 2024. - Expenditure on solar project mainly post-monsoon; INR 50-60 crores spent to date. - No expansion planned for lignite-based capacity; focus on R&M for 10 years life extension with allocated capex. - Debt cost expected at around 8% with in-principle lender approvals.

- Gujarat Industries Power Company Limited (GIPCL) is focusing on renewable energy expansion, particularly solar power, with a 600 MW solar project (Khavda) expected to start commercial production by November 2024. - A total capacity of 1,200 MW solar is planned to be operational on their own by December 2024-25. - The company aims to continue capacity additions through a 2,375 MW park development, with a second phase deadline by December 2026. - Renewable projects currently yield ~12%+ IRR, expected to improve profitability over next 2-3 years as depreciation and interest cost reduce. - Revenues from the 600 MW solar plant post-commissioning are expected to reach around INR 430 crores. - Operating cash flow is stable at ~INR 400 crores yearly, supporting growth investments. - Expansion is largely driven by contract-backed projects and backed by a skilled team to meet timelines with one- to two-months margin.

- Renewable projects currently provide ~12%+ IRR, expected to improve as depreciation and interest costs decline over next 2-3 years, leading to higher profitability. - Operating cash flow around INR 400 crores annually is sufficient to support equity portion of expansions. - Upcoming 600 MW solar project expected to start revenue generation by November 2024, contributing ~INR 430 crores revenue after reaching optimum PLF. - Large renewable expansion with expected debt of INR 3,000 crores by FY25, but management confident projects will generate revenue to cover debt servicing. - EBITDA from renewable segment is INR 231 crores, and combined EBITDA with non-renewable is INR 500 crores, indicating growth potential. - Management assures timely project completion with a 1-2 month margin, aiming for sustained earnings growth. - ROE currently low due to early stage investments but expected to rise to double digits as projects mature.

- The company has two major tenders in process: - Balance of supply for structural parts valued at INR 1,300 crores (already available on the website). - PV module tender, expected to be published next month. - Both tenders are expected to be concluded by the end of the monsoon season. - For the Khavda 600 MW solar project, the total project cost is about INR 3,600 crores under process with in-principle debt approval from lenders at around 8% interest. - The first 600 MW solar capacity in the park is planned to be commissioned by November 2024. - The balance 600 MW from the first phase will be tendered out by GUVNL. - For the second phase (1,175 MW), expected deadline is December 2026; decisions on capacity uptake and funding will be taken post next year. - Capex for this fiscal is expected to be on the lower side with major spend post-monsoon.

- The company anticipates a total investment of around INR 3,780 - 4,000 crores for park development and solar projects by FY25. - Funding mix is expected to be approximately 70% debt and 30% equity. - Equity requirement is around INR 2,000 crores. - Cash generation of about INR 400-500 crores per year and existing cash of INR 600-700 crores will cover INR 1,500 crores equity internally over two years. - For the remaining equity (approx. INR 500 crores), the company plans to raise funds via market instruments such as rights issues, QIPs, preferential issues, or direct promoter infusion. - Debt funding is in principle approved from two or three large lenders at around 8% interest. - The company recognizes the need to take on debt proactively to not miss development opportunities despite the increased leverage.