Pitchbook US template - GMR Group Presentation - June 2016.pdf · • Public and Community Toilets built Empowerment and Livelihoods • 8 training institutes for unemployed youth;

0 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual

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Investor Presentation

June 2016


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DISCLAIMER

The materials being shown in this presentation is solely for information and not to be reproduced, retransmitted, further distributed to any other person or published, in whole or

in part, for any other purpose.

These materials have been prepared by GMR Infrastructure Limited (the "Company") solely to be used for this presentation. No representations or warranties, express or

implied, are made by the Company or its subsidiaries (collectively, the “Group”) or any of their respective members, directors, officers or employees or any other person as to,

and no reliance should be placed on, its fairness, accuracy, completeness or correctness of the information or opinions presented or contained in these materials and have not

been independently verified.

It is not the intention to provide a complete or comprehensive analysis of the financial or trading positions or prospects of the Company or the Group. None of the Company or

the Group or any of its directors, officers, employees, agents, affiliates, advisers or representatives accepts any liability whatsoever from any loss howsoever arising from any

information or opinions information or opinions presented or contained in these materials or otherwise arising in connection with these materials. The information and opinions

presented or contained in these materials are provided as on the date of this presentation and are subject to change without notice and the accuracy of the information is not

guaranteed.

This presentation is for information purposes only and is not and does not constitute or form part of any offer, invitation or recommendation to purchase or subscribe for any

securities and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto. This presentation

may not be used or relied upon by any other party, or for any other purpose, and may not be reproduced, disseminated or quoted without the prior written consent of the

Company. This presentation should not be relied upon as the basis of an investment decision in securities of the Company or the Group.

The distribution of this presentation in certain jurisdictions may be restricted by law and persons who come into possession of this presentation should observe any such

applicable restrictions. The Company or its Group cannot be held liable for distribution of the presentation by the investors who come into possession of the presentation or for

non compliance with applicable laws or restrictions.

This presentation and the discussion that follows may contain “forward looking statements” relating to the Company or the Group. These forward looking statements, which

may include statements relating to future results of operation, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions,

expectations, estimates, and projections of the directors and management of the Company about the business, industry and markets in which GMR Infrastructure the Group

operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are

beyond the Company’s or the Group’s control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward

looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of the Group. In particular, such

statements should not be regarded as a projection of future performance of the Company or the Group. It should be noted that the actual performance or achievements of the

Company and the Group may vary significantly from such statements.

Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual

Institutional Framework


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Visionary Leadership Building Institution For Perpetuity…

THE GROUP HOLDING BOARD

GM Rao

Group Chairman

• Founder Chairman of the Group

• Since 1978, he has successfully led the GMR group

creating infrastructure assets of national importance

• Holds a degree in Mechanical Engineering

Srinivas

Bommidala

Chairman, Airports

• Held various managerial

positions in the GMR Group in

the past

• One of the first Directors of the

Group and Board Member since

1996

GBS Raju

Chairman, Energy

• Involved with the group since

1996

• Held various positions including

the group CFO in the past

• Instrumental in establishing the

roads business

G Kiran Kumar

Corporate

Chairman

& MD, GMR Infra

• Significant experience in leading

projects and businesses in the

infrastructure space

• Spearheaded the development

of the T3 terminal at Delhi

Airport

B V N Rao

Chairman, Urban

Infra & Highways

• Over 40 years of experience

• One of the founding Directors of

the Group in 1988

• Has been associated with all

the businesses promoted by the

group

P M Kumar

Chairman,

Institution

Building &

Governance

• Over 45 years of experience in

several leading and diverse

organizations in senior

leadership and consulting

positions

INDEPENDENT DIRECTORS ON GIL BOARD

NC Sarabeswaran

• Ex- director of

RBI and ING

Vysya Bank

Dr. Prakash G

Apte

• UTI chair

professor at

IIM Bangalore

• Has served on

expert

Committees

appointed by

NSE and SEBI

R S S L N

Bhaskarudu

• Ex- MD of

Maruti Udyog

Limited

• Served more

than two

decades at

BHEL

S Sandilya

• Chairman -

Eicher Motors

• Board member

of Parry’s

Sugar

Industries &

Mastek

S Rajagopal

• Ex-Chairman

& MD of Bank

of India, Indian

Bank

V. Santhanaraman

• Ex- ED of

Bank of

Baroda

C. R.

Muralidharan

• Ex- ED of

Bank of

Baroda

Kameswari Vissa

• CA with over

24 years of

experience

comprising of

management

consultancy

and industry

experience

Jayesh Desai

• Managing

Partner - SIG,

Piramal Group

• CA and holds

Bachelor’s

degree in

Commerce


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A Feature Of Our Governance is The Group Performance Advisory

Council, which Comprises Eminent Industry Leaders

Dr. Sumantran is Executive Vice-Chairman of Hinduja Automotive. From 2001-05, he was chief executive of TATA Motors

Car business. Prior to this he had a 16-year career stint with GM in Detroit Dr V Sumantran

Former Chairman Ingersoll Rand. Previously held leadership positions with Kirloskar group. He serves on the advisory and

statutory Board of various Companies Daljit Mirchandani

Founder / Co-founding member Indocean, CRISIL and HDFC. He has been in advisory roles to USAID, The World Bank

and The Asian Development Bank in the past Pradip P Shah

Previously held leadership positions in Wipro, ABB and HP. Member of several boards including Idea Cellular and ING

Vysya Bank Arun Thiagarajan

He has over 4 decades of banking experience and is a consultant for World Bank, IFC, etc. He has served as CEO of

Corporation Bank and Chairman of Vysya Bank K R Ramamoorthy

Retired IAS, with over 30 years experience in financial services and public sector enterprises. Served leadership positions

like Chairman SEBI (equivalent to SGX in S’pore, SEC in US), CMD IDBI Bank, Chairman UTI M Damodaran

A highly acclaimed business advisor, speaker, and author who has coached some of the world's most successful CEOs.

For 35 years, he's worked with companies like GE, Bank of America, DuPont, 3M,etc. Dr Ram Charan


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We have approached Institution Building through

Technology, People and Governance

• Family Governance guided by

Family Constitution

• Management Assurance, Ethics,

Governance Council

• Group Performance Advisory

Council (GPAC)

• Business Excellence

• Strategy & Risk Management

• Corporate Centre of Excellence

for processes – Procurement, HR,

Legal

• Centralized infrastructure and

ERP with real-time intelligence

• Business automation with real-

time war rooms, toll monitoring,

video audits, laser mapping.

• Process automation through ERP

and e-enabled shared services

organization for back-office

transactions

• Vision, Values & Beliefs

• Leadership Development and

talent Management

• Empowered Organization

Process & Governance 2 Technology 3

People 1


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The Group’s values and beliefs are driven through institutional

mechanisms

• Incorporated in performance appraisal of all

employees

• 360 degree feedback on values

• Mandatory value clarification workshops

• Used as a key criteria during recruitment

Integration of Values & Beliefs into GMR Work


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Education

• Running 8 schools and colleges

• Scholarships / support to over 4,000 students

• Partnering with over ~350 Government school impacting more than 35,000 students

Health, Hygiene and Sanitation

• A 135-bed secondary care hospital at Srikakulam (Andhra Pradesh)

• Have Ambulances, Mobile medical units and 28 Medical Clinics

• School health check up covering over 150,000 children

• Public and Community Toilets built

Empowerment and Livelihoods

• 8 training institutes for unemployed youth; more than 4,500 trainees per year

• Settlement rate of 80%

• Supporting ~300 self help groups

Committed to “Giving Back To The Community" through

GMR Varalakshmi Foundation

“To make sustainable impact on the human development of under-served

communities through initiatives in education, health and livelihoods”

Mission of

GMR Varalakshmi

Foundation


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Two highlights of our governance are the Family Constitution and

outside-in views...

• An independent panel comprising six eminent industry leaders

• The review is based on a Balanced Score Card (BSC) approach

• Meets every quarter to assess and advise on the group performance, including in-person meetings

• Recommendations are discussed with the Board and suitable actions taken.

Group Performance Advisory Council

• A family vision that is in sync with the business vision

• Describes the family governance structure through a family constitution

• Defines rights and responsibilities of family members in business and outside of business

• Codifies agreed ways of decision making within the family

Family Governance

Run the family like business and run the

business like family

GPAC helps to get an outside-in view of the

business & its performance


Business Overview


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GMR Group: Evolution And Key Milestones

Incorporation of

GMR

Infrastructure

Ltd (GIL)

Consolidation • Execution:

Operationalise under construction projects

• Focus on operational efficiency, returns & cash flow optimisation

• Liquidity management

• Recycling of capital through divestments

• Declared Investment holiday

Young Group – Less than 20 years old with a Balance Sheet of INR 672bn [USD 11.2bn]

• Chennai power plant started operations

• Two highways started operations

• Forayed into airports with award of Hyderabad airport concession

• Hyderabad airport started operations

• Delhi Airport (DIAL) concession awarded

• GIL IPO successfully completed

• Raised ~USD 1 bn via QIP of GIL, largest QIP by any Indian corporate

• Acquired 50% stake in Intergen Power

• Ambala Chandigarh toll road started operations

• Terminal 3 of DIAL completed in record 37 months

• Coal mines in Indonesia acquired

• Sabiha Gokcen (Istanbul airport) inaugurated

• Raised ~USD 315 mn via QIP of GIL

• PE Investors invest US$300mn in GMR Energy and US$330mn in GMR Airports

• Stake in Intergen Power divested for USD 1.2 bn

• 5 power plants and 3 road projects became operational

Growth Phase

• Focus on attaining scale and

rapid growth

• Bidding for new projects and

commencing construction

Managing

Turbulence

• Raising of

equity capital

• Focusing on

execution

Stable Cash Flows

• Airport and Highway projects fully

operational

• No further investments required

• Assets stablisation and positive cash flows

• Operational capacity of Energy set to

increase with new projects coming

onboard resulting in higher cash flows

USD 1 = INR 60

• Divested stake in Island Power, Istanbul Airport, GMR Jadcherla and GMR Ulundurpet

• EMCO & Kamalanga power projects started operation

• Road projects started operation: Hyderabad Vijayawada, Hungund Hospet and Chennai ORR

• Won concession to expand Cebu airport in Philippines

• Received favourable verdict (Jun’14) from arbitration tribunal regarding termination of Male Airport

• Raised INR 14.8bn [USD 250mn] via QIP, INR 14bn [USD 233mn] via Rights Issue and USD 289 mn through DIAL bond issue

• Refinanced project loans of EMCO and Kamalanga

• Raised USD 300mn (~Rs 2,000cr) through an FCCB from Kuwait Investment Authority (KIA)

• Tenaga to invest USD 300mn for a 30% stake in GMR Energy

• Divested Hungund-Hospet road project while adopted SDR for Rajahmundhry project

11

Business Overview

AIRPORTS

~80 mn Passenger Capacity • 2 Airports in Delhi and Hyderabad

• 1 Airport in Philippines : Mactan - Cebu Airport

ENERGY

~7,200 MW Power Generation Capacity • 3,000MW of Coal Based Projects

• 1,400MW of Gas Based Projects

• 180MW of Hydro Projects – under construction

• 2,025MW of Hydro Projects – under development

• 25MW of Solar Project / 3.4MW of Wind Power Projects

• 350kms of 2 Transmission Projects

• 4 Coal Mines – 2 each in India and Indonesia

HIGHWAYS

9 Operational Projects • 4 Annuity Projects - 284kms

• 5 Toll Projects - 446kms Toll

URBAN INFRASTRUCTURE

~15,530 Acres Land • 230 acres in Delhi Airport &1,500 acres in Hyderabad Airport

• 3,300 acres in Krishnagiri &10,500 acres in Kakinada


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Corporate Structure

97% 93.5%*** 100%

Promoter & Promoter Group

61.6%

FIIs 19.3%

MF & DIIs 7.8%

Others 11.2%

Shareholding

as on Mar 31,

2016 G I L

Operational Stake Operational Coal / Diesel based Projects Stake Operational Annuity Projects Stake

EMCO Power Plant (600 MW) 100% Tuni Anakapalli 100%

Kamalanga Power Plant (1,050 MW) 86% Tambaram Tindivanam 100%

Chhattisgarh Power Project (1,370 MW) 100% Pochanpalli 100%

Chennai Power Plant (200 MW) 51% Chennai ORR 90%

Operational Gas based Projects

Kakinada Power Plant (235 MW) 100% Ambala Chandigarh 100%

Vemagiri Power Plant (388 MW) 100% Hyderabad Vijaywada 90%

Rajahmundry Power Project (768 MW) 45% Hungund Hospet * 36%

Operational Renewable Energy Projects Faruknagar Jadcherla 26%

Solar Power Project (25 MW) 100% Tindivanam Ulundurpet ** 26%

Wind Power Projects (3.4 MW) 100%

Operational Transmission Projects

Aravali Line (96 kms) 100%

Maru Line (269 kms) 100%

Under Construction

Bajoli Holi Power Project (180 MW) 100%

Under Development

4 Hydro Power Projects (2 India, 2 Nepal)

Coal Mining Projects

PT Barasentosa Lestari 100%

PT Golden Energy Mines 30%

Operational BOT (toll) Projects

GMR Airports Ltd GMR Energy Ltd GMR Highways Ltd

Delhi International Airport 64%

GMR Hyderabad International Airport 63%

Mactan-Cebu International Airport 40%

* Share Purchase Agreement signed to divest 51% stake; already transferred 15% in Mar’16 ** Share Purchase Agreement signed to divest remaining 26% stake *** Includes both direct & indirect holding


Airport Sector


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GMR Airports: Assets

Three world class emerging markets airports

• World class airports - Aggregate capacity of ~80mn passengers (Delhi, Hyderabad and Mactan Cebu Airport)

• Emerging market focus - 2 airports in India and 1 in Philippines

• Diversification of revenue streams - Besides revenue from aero related activities, airports also get revenue from non-aero related activities such

as cargo handling, MRO, F&B, IT & Car Parking and also from Real Estate at airport

Delhi

Hyderabad

Philippines

Mactan Cebu International

Airport

Shareholders

GMR 40% Megawide 60%

Second Busiest Airport in

Philippines

Delhi International Airport

Shareholders

GMR 64% AAI 26% Fraport 10%

India’s Largest and

Busiest Airport

Hyderabad International

Airport

Shareholders

GMR 63% GoAP 13% AAI 13%

MAHB 11%

India’s First Greenfield

Airport


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Airport Asset Details

Project Delhi International Airport (DIAL) Hyderabad International Airport

(GHIAL)

Mactan - Cebu International Airport

(MCIA)

Status Operational Operational Operational and undergoing expansion

Annual Passenger

Capacity 62 mn 12 mn 16 mn #

Concession Terms • 30 + 30 years concession (starting

April 2006)

• 46% revenue sharing

• 30 + 30 years concession (starting

March 2008)

• 4% revenue share

• 25 years (from the O&M start date)

• Upfront fees of USD 320mn + VAT

• Project cost of USD 750mn

Commercial Property

Development

• 230 acres Real Estate parcel

• 1st Phase development of 45 acres has

completed

• Work on 2nd Phase is underway

• 1,500 acres Real Estate parcel

• 1st Phase : To develop 250 acres

aviation SEZ and 250 acres multi

service SEZ

Revenue Structure • Assured “Target Aero Revenue” every year, based on variables like approved

project cost, WACC, normative operations, etc. • Aero revenue based on pre-determined

PSF

Traffic – FY16 48.4 mn Pax;

365,696 ATMs*

12.5 mn Pax;

106,303 ATMs*

8.0 mn Pax;

64,900 ATMs*

Traffic – FY15 41 mn Pax;

323,455 ATMs*

10.5 mn Pax;

94,562 ATMs*

Source: Company Data; *ATM = Air Traffic Movement

# Post 1st phase of expansion


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Airports: Cash Flows to improve

DIAL’s tariff fixation assumptions (by AERA) under appeal

• Appealed for cost of equity of 24% vis-à-vis currently

approved rate of 16% by AERA

• Appealed for return of 24% on real estate deposits

(utilized to fund capex) vis-à-vis Nil return approved

by AERA

Long awaited regulatory approvals to improve the profitability matrix

Note : Current tariff will continue till the final order of Tribunal

UDF collection started post DGCA notification restoring the

collection of Airport Charges with effect from 05 Nov’15

GHIAL has submitted its tariff proposal for second control

period starting 01 April 2016

Delhi Airport Hyderabad Airport

• DIAL raised ~USD 289mn through a bond issue. The issue

was oversubscribed by ~16 times

• Proceeds from the issue was used to prepay the ECB

• Resulted into a benefit of (a) lower interest cost and (b)

bullet repayment instead of yearly repayments in ECB

Refinancing existing debt to realign cash flows to repayment

• GHIAL refinanced the existing term debt post AERA’s decision to

change the “Till” methodology

• Got moratorium of two years thereby reducing pressure on cash

flows

Delhi Airport Hyderabad Airport

USD 1 = INR 60


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DIAL Land Monetisation to unlock Higher Potential Returns

• Awarded development rights for 14 asset areas through

competitive bidding

− Developable area of 6.12 msf

• Operations commenced for JW Marriott, Lemon Tree, Red Fox,

Holiday Inn, Ibis Hotel, Novotel and Pullman

− ~2,400 rooms are operational with an occupancy of 70-75%

Aerotropolis Development Plan

Majority of

Land Bank Core Airport

infrastructure

NH 8

Gurga

on *LP = Land Parcel

Flexibility in land usage – allows all commercial activities except residential

230 acres of Aerotropolis Development Aerotropolis Phase - I : 45 Acres of Hospitality District

• Commercial development at airport envisages

development of an alternate commercial hub, right in the

heart of NCR

• Location lends dual advantage of central location with

effective connectivity & proximity to demand

• First phase of 45 acres of development, constitutes of

hospitality and commercial assets

• Next phase of 23 acres land development as a Retail

district is underway

• Monetisation of 23 acres in Phase II

− RFQ completed and RFP issued to qualified bidders

− Targeting to create a retail focused district

− Developable area of ~2.0 – 2.5 msf

• Monetization to be done through a transparent bidding process

− Expected to complete the process & award the project by end-

H1FY17

Aerotropolis Phase - II : 23 Acres of Retail District


Energy Sector


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PT Barasentosa

Lestari, Indonesia

(404 MT)

Bajoli Holi

(180 MW / Hydro)

Alaknanda

(300 MW / Hydro)

Upper Marsyangdi

(600 MW / Hydro)

Upper Karnali

(900 MW / Hydro)

Talong

(225 MW / Hydro)

Maru Transmission

269 Kms

Aravali Transmission

96 Kms

Chhattisgarh

(1,370 MW / Coal)

EMCO

(600 MW / Coal) Kakinada

(235 MW / Gas)

Chennai

(200 MW / Diesel)

Rajahmundry

(768 MW / Gas)

Kamalanga

(1,400 MW / Coal)

Vemagiri

(388 MW / Gas)

Solar Plant

(25 MW)

Operational Assets

Projects Under Construction

Projects Under Development

Legends:

Transmission Projects

Coal Mines

Sinar Mas, Indonesia

(1.8 BT)

4,636 MW in operation and 2,555 MW under implementation

7,191 MW

Capacity by stage Fuel based capacity

7,191 MW

Operational 4,636 64%

Under construction

180 3%

Under development

2,375 33%

Coal 3,370 47%

Hydro 2,205 31%

Natural Gas 1,391 19%

Others 225 3%

Energy Assets


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GMR Infrastructure

Ltd

GMR Energy Ltd

Kamalanga Power

Plant- 1,400MW

Warora Power Plant-

600MW

Vemagiri Power

Plant- 388MW

Gujarat Solar Plant-

25MW Bajoli Holi Hydro

Project- 180MW

Upper Karnali Hydro

Project- 900MW

Upper Marsyagadi

Hydro Project-

600MW

Alaknanda Hydro

Project- 300MW

Thermal

(Coal & Gas)

Renewable

(Hydro & Solar)

Chhattisgarh Power

Plant – 1,370MW Other Power Assets

Indonesia coal mines

Other Assets

Maru & Aravalli

Transmission

Private Equity

Investors

Operational Under Construction Under Development

93.5%*

6.5%

Rajahmundhry

Power Plant- 768MW

* Includes both direct & indirect holding

Kamalanga Power Plant includes 350MW of Unit 4 which is under development

Current Structure of GMR Energy

Barge Plant- 235MW


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Coal Projects (~3,000 MW)

COD

Warora (600MW) Kamalanga (1,050MW) Chhattisgarh (1,370MW)

PPA

Fuel Linkage

PLF

Refinancing

Others

• November 2015 (Unit - 1)

• March 2016 (Unit – 2)

• Fully contracted long term PPA’s

• 85% of power contracted through long

term PPA. Plan to tie-up the remaining

also through a long term PPA

• Long term PPA with CSPT for 35% of

gross capacity. Remaining untied 65%

– strategy is to tie up long term PPA

• Confirmed linkage from Coal India for

entire capacity

• Confirmed linkage from Coal India for

entire capacity

• Won the operational Talabira coal mine

and Ganeshpur coal mine

• PLF of ~76% in FY16

• To improve as TANGEDCO (Tamil

Nadu) PPA (150MW) started in Dec’15

• PLF of ~67% in FY16

• Has improved as evacuation issues are

now resolved

• PLF of ~26% in H2FY16

• To improve as the long-term PPA gets

contracted

• Refinancing of project loan completed

• Resulted in lower interest rate of

110bps with moratorium of 18months

and 15 year repayment period

• Refinancing of the project loan

completed under RBI’s 5/25 scheme

• Lower interest rate of ~100bps and

moratorium of 30months with 16.5 year

repayment period

• Awaiting tariff orders – Change in Law

& Coal pass through

• Supply of 150 MW power to

TANGEDCO has fully commenced

from Dec’15

• GRIDCO PPA - Favorable order

received from CERC on maintainability

w.r.t. tariff determination petition

• Haryana PPA - Favorable order

received from CERC for for ‘Change-in-

Law & ‘Coal cost pass-through’ petition

• Transmission lines are completed and

charged

• Coal mining at Talabira started from

Aug’15

• March 2014 • September 2013

Project

Project Cost • INR 124bn [USD 2,071mn] • INR 65bn [USD 1,087mn] • INR 40bn [USD 667mn]

USD 1 = INR 60


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Coal Mines

Project Talabira mine Ganeshpur mine

Mine Location Sambalpur, Odisha Latehar, Jharkhand

Prior Allottee Hindalco Industries Tata Steel Limited & Adhunik Group

Upfront payment INR 540mn [USD 9mn] INR 1,090mn [USD 18mn]

Geological Reserve - 138 Mn Tons

Extractable Reserve 9 Mn Tons 92 Mn Tons

Mining Plan 3 Mn Tons p.a. 4 Mn Tons p.a.

Bid Price INR 478 /ton INR 704 /ton

Coal Quality Grade ‘F’ (3,600 kcal) Grade ‘G 11’ (4,200 kcal)

Strip Ratio 1.02x 1.39x

Distance from plant 296 kms 740 kms

Current Status • Fully explored and operational

• Mining commenced from Aug’15

• Under development stage

• Would take 2-3 years to become operational

Project GEMS PTBSL

Mine Location Indonesia Indonesia

Shareholding 30% held by GMR Group 100% held by GMR Group

Resources 1.77 Bn Tons 404 Mn Tons

Reserves 640 Mn Tons 142 Mn Tons

USD 1 = INR 60


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Gas Projects (~1,400 MW)

Project Vemagiri

(Andhra Pradesh)

Kakinada

(Andhra Pradesh)

Rajahmundry

(Andhra Pradesh)

Capacity 388 MW 235 MW 768 MW

Project Cost INR 11.5bn [USD 190mn] INR 6bn [USD 100mn] INR 49.4bn [USD 822mn]

Commencement

of Generation January 2008 June 2010 October 2015

Power Off-take

• 100% Regulated Tariff

• 23 years long term PPA (starting Sept’06)

for 370 MW, with four state owned

distribution cos in AP

• 100% Merchant Tariff

• PPA with GMR Energy Trading Ltd for 220

MW

• Signed short term PPA based on supply of

gas through the RLNG scheme

Additional

Information

• Plant operated at 59% PLF till FY’12

• Gas allocation from KG Basin (not received

any natural gas supply since Mar’13)

• Plant restarted post restart of gas supply

through the e-bid RLNG scheme

• PLF in FY16 stood at ~18%

• Relocated the Barge to Kakinada in Apr’10

• Converted into Gas-based Power Plant

• Plant operated at 56.8% PLF till FY’12

• Gas allocation from KG Basin (not received

any natural gas supply since Mar’13)

• CoD achieved in Oct’15 post start of gas

supply through the e-bid RLNG scheme

• PLF in H2FY16 stood at 20%

• To enter into long term PPA at appropriate

time based on sustainable gas supply

• Due to delay in securing fuel, project has

faced cost overruns

USD 1 = INR 60


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Investment of USD 300 mn by Tenaga

Nasional Berhad (Tenaga), Malaysia

for 30% equity interest in a select portfolio

of GMR Energy Ltd.


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Overview • Primary investment of $300m (~Rs 2,000 cr) by Tenaga Nasional Berhad in GMR Energy for 30% stake on a

fully diluted basis

Structure

• Investment by Tenaga would be in select portfolio of assets of GMR Energy

o Selected assets would be in Portfolio A (depicted in Slide 6)

o Assets included in Portfolio B (depicted in Slide 6) will include Chhattisgarh and Rajahmundry Power plants

− Tenaga has right to invest in Chhattisgarh and other assets at the Fair Market Value (FMV) any time

within the next 5 years

o Indonesian coal mines would remain outside of GEL since Tenaga does not want to take exposure in

commodities

GEL Valuation • Equity Value of USD 1 bn (~Rs 6,665 cr1)

Key Terms &

Conditions

• Proceeds from the transaction (~Rs 2,000 cr) to be used for corporate debt servicing

• All convertible instruments (Private Equity players) to be converted into equity shares prior to the transaction

• GMR would remain the majority shareholder

• Subject to conditions customary to a transaction of this nature including applicable regulatory approvals from

Malaysia and India, applicable lender consents, restructuring of GMR Energy including carve out of assets, etc

1 Assuming an INR/ USD exchange rate of 66.65

Strategic Partnership with Tenaga Nasional Berhad


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Revised Structure of GMR Energy

GMR Infrastructure

Ltd

GMR Energy Ltd

Kamalanga Power

Plant- 1,400MW

Warora Power Plant-

600MW

Barge Plant- 235MW

Gujarat Solar

Plant- 25MW

Bajoli Holi Hydro

Project- 180MW

Upper Karnali Hydro

Project- 900MW

Upper Marsyagadi

Hydro Project- 600MW

Alaknanda Hydro

Project- 300MW

Thermal

(Coal & Gas)

Renewable

(Hydro & Solar)

Chhattisgarh Power

Plant – 1370MW

Rajahmundry Power

Plant – 768MW

Other Assets

Other Power

Assets

Indonesia coal

mines

Excluded Assets

Maru & Aravalli

Transmission

Portfolio A – Tenaga is investing in this portfolio Portfolio B – Right to invest within 5 years

Tenaga Private Equity

Investors

52%*

18% 30%

* Includes both direct & indirect holding

Kamalanga Power Plant includes 350MW of Unit 4 which is under development

Operational Under Construction Under Development

Vemagiri Power

Plant- 388MW


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Bajoli Holi

(180 MW / Hydro)

Alaknanda

(300 MW / Hydro)

Upper Marsyangdi

(600 MW / Hydro)

Upper Karnali

(900 MW / Hydro)

Warora

(600 MW / Coal)

Kakinada

(235 MW / Gas)

Kamalanga

(1,050 MW / Coal)

Vemagiri

(388 MW / Gas)

Solar Plant

(25 MW)

Operational Assets

Projects Under Construction

Projects Under Development

Legends:

Portfolio A – Balanced Mix of Operational & Pipeline Projects

Kamalanga

(350 MW / Coal)

• Operating capacity of ~2,300 MW comprising 5 assets

o Warora – 600 MW coal based plant strategically located in

the high growth oriented western region of Maharashtra

o Kamalanga – 1,050 MW coal based plant strategically

located close to the coal belt of Odisha

o Vemagiri – 388 MW gas based plant

o Barge – 235 MW barge mounted gas based plant

o Gujarat Solar – 25 MW solar power plant located at Patan

• Additional pipeline capacity of ~2,330 MW comprising 5

under construction / development assets

o Kamalanga Unit 4 – 350MW extension of Kamalanga

o Bajoli Holi – 180 MW hydro facility on the River Ravi

o Upper Karnali – 900 MW hydro project on the river Karnali

o Upper Marsyangdi – 600 MW hydro project on the river

Marsyangdi

o Alaknanda – 300 MW hydro project on the Alaknanda River

Balanced mix of Coal (2,000 MW), Gas (623 MW) and Renewable energy - Hydro (1,980 MW)

& Solar (25 MW)


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Project Location Fuel Capacity (MW) COD

Chhattisgarh Raipur Coal 1,370 Unit 1 – Nov 2015

Unit 2 – Mar 2016

Rajahmundry Rajahmundry Gas 768 Unit 1 – Oct 2015

Unit 2 – Oct 2015

Total 2,138

• Tenaga would have a right to invest in these assets anytime within the next five years

• Adds further strategic value to the portfolio by adding ~2,000 MW of operating capacity and increase its total portfolio

to over 6,700 MW

Portfolio B – Right to Invest in Additional ~2,000 MW of Capacity

• Considering the absence of long term Fuel Supply Agreement and long term Power Purchase Agreements, the

consortium of lenders have adopted the Strategic Debt Restructuring Plan (SDR)

o Accordingly, the company has issued equity shares proportionately to all the lenders

• As per the SDR scheme, out of the total outstanding debt (including overdue interest) of Rs 3,780 cr, debt to the

extent of Rs 1,414 cr has got converted into equity

o Consortium lenders now have 55% shareholding and balance 45% is held by GMR

• Balance debt of ~Rs 2,366 cr would have repayment period of 20.5 years including moratorium of 1.75 years and

interest rate of 10.75% p.a.

o Lower debt coupled with reduction in interest cost improves the long term viability of the project

Adoption of Strategic Debt Restructuring by GMR Rajahmundhry


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Partnership with Tenaga provides renewed impetus to Energy Business

• Partnership between one of the largest integrated utilities and an established player in the Indian Power sector will be a force multiplier to create one of the most valuable companies

Strong synergies from the strategic partnership with Tenaga

• GEL has more than 80% of its capacity contracted under long-term PPAs ensuring high visibility of cash flows

Strong Visibility on Cash Flows from Operational Portfolio

• Primary capital infusion strengthens GEL’s balance sheet through reduction of corporate debt

• Convertible preference shares issued to Private Equity Investors would be converted into Equity

Strengthening of the Balance Sheet

• Given the attractiveness of GMR Energy post the investment, it will have an opportunity to unlock value at an appropriate time

Attractiveness of GMR Energy from a value unlocking perspective


Highway Sector


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All 9 Projects (731 kms) are Operational

4 Projects (284 kms) are Annuity based and 5 Projects (447 kms) are Toll based

Hyderabad

Highways Projects

Chandigarh-Ambala Highway –

GACEPL (35 kms)

Tambaram-Tindivanam Highway –

GTTEPL (93 kms)

Tindivanam-Ulunderpet Highway –

GTUEPL (73 kms)

Tuni-Anakapalli Highway –

GTAEPL (59 kms)

Hyderabad-Vijaywada Highway –

GHVEPL (181 kms)

Adloor-Gundla Pochanpalli Highway –

GPEPL (103 kms)

Farukhnagar-Jadcherla Highway –

GJEPL (58 kms)

Chennai Outer Ring –

GCORRP (30 kms)

Hungund-Hospet Highway –

GOHHHPL (99 kms)


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Project Details

Project Name

Annuity Based Road Projects (285 kms) Toll Based Road Projects (446 kms)

GTAEPL GTTEPL GPEPL GCORRPL GACEPL GHVEPL GOHHPL GUEL GJEPL

Location Tuni-Ankapalli Tambaram-

Tindivanam Pochanpalli Chennai ORR

Ambala-

Chandigarh

Hyderabad-

Vijaywada Hungund-Hospet

Tindivanam

Ulunderpet

Faruknagar

Jadcherla

Shareholding 100% 100% 100% 90% 100% 90% 36% 26% 26%

Road Length

(kms) 59 93 103 30 35 181 99 73 58

CoD Dec-04 Oct-04 Mar-09 Jun-13 Nov-08 Dec-12 Nov-12* / May -

14 Jul-09 Feb-09

Concession Period 17.5 yrs from

May-02

17.5 yrs from

May-02

20 Yrs from

Sep-06

20 Yrs from

Jun-10

20 Yrs from

May-06

25 Yrs from

Apr-10

19 Yrs from Sep-

10

20 Yrs & 98 days

from Oct-06

20 Yrs from

Aug-06

Amount of Annuity

Payment

INR 295mn

(USD 5mn)

in May and

Nov each year

INR 418mn

(USD 7mn) in

May and Nov

each year

INR 542mn

(USD 9mn)

in March and

Sep each year

INR 621mn

(USD 10.4mn)

in June and Dec

each year

Key Development – – – – Arbitration

underway –

Signed Share

Purchase

Agreement (SPA)

to divest 51%;

transferred 15% in

Mar’16

- Divested 74%

stake in Sep13

- SPA signed in

Mar’16 to sell

remaining 26%

Divested 74%

stake in Feb13

* Partial CoD in Nov 2012 and completely operationalised in May 2014


Way Forward


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Key Highlights - Past 24 Months

Particulars Update

‘Asset Light

Asset Right’

Approach

• Adopted the principle of “Develop, Build, Create Value and Divest”

• Focus moved from Asset Growth to Cash Growth

• Delivered on ‘Asset Light, Asset Right’ strategy

Divestments

• Divested 6 large projects

‒ 1 Airport: Sabiha Gocken International Airport (SGIA), Turkey

‒ 1 Power project: Island Power Project, Singapore

‒ 3 Road projects: Jadcherla Expressway, Ulunderpet Expressway and Hungund Hospet Expressway

‒ 1 Coal Mine: Eloff & Kendall Mines by Homeland Energy Group

• Released INR 39bn [USD 653mn] equity and reduced liabilities by INR 73bn [USD 1.2bn] through

divestments

Capital

Raising

• Total Capital Raised since FY12 - INR 65bn [USD 1.1bn] (excluding divestments)

• Raised INR 48.8bn [USD 813mn] in the last 24 months

o QIP of INR 14.8bn [~USD 250mn]

o Rights Issue of INR 14.0bn [~USD 233mn]

o FCCB of INR 20.0bn [USD 300mn]

• Investment of USD 300mn by Tenaga for a 30% in a select portfolio of GMR Energy Ltd

USD 1 = INR 60


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Key Highlights - Past 24 Months (cont.)

Business

Verticals Update

Energy

• GMR Energy - Renegotiation completed with Private Equity Investors; to be issued 18% stake in company

• Warora & Kamalanga - Both plants successfully operationalised & FSA signed for 100% capacity

o Orissa PPA (Kamalanga) - Awarded a tariff increase of Rs0.65/unit to Rs3.4/unit

o Haryana PPA (Kamalanga) – Awarded favourable order w.r.t. ‘change in law’ and ‘coal cost pass-

through’

o Tamil Nadu PPA (EMCO) - Commenced full supply of 150MW from Dec’15 onwards

• Chhattisgarh project (GCEL) - Achieved CoD for Unit I in Nov’15 and for Unit II in Mar’16

o Talabira Coal Mines - Coal production started from Aug’15 & getting dispatch to Chhattisgarh project

• Gas Auctions (RLNG scheme) - GMR has won right to receive imported R-LNG for two of it’s power projects.

Vemagiri & Rajahmundhry has won gas supply for upto 30% PLF (Phase 3) during H1FY17

o Both Vemagiri & Rajahmundhry started operations during FY16 post winning gas supply in the e-bid

RLNG scheme and operated at ~20% PLF during the year

• Strategic Debt Restructuring of Rajahmundhry project – Converted Rs 1,414 cr of debt into equity & issued

shares to consortium lenders representing 55% stake in the project

• Refinancing of Operational projects - Group is refinancing the project debt to align the cash flows with

repayment schedule. Refinancing of project debt resulted into

o Warora - lower interest rate by 110bps; principal moratorium of 1.5 years & loan tenure of 15 years

o Kamalanga - lower interest rate by ~100bps; principal moratorium of ~2.5years

o Rajahmundhry - lower interest rate by ~325bps; principal moratorium of 1.75 years & loan tenure of

20.5 years


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Key Highlights - Past 24 Months (cont.)

Business

Verticals Update

Airport

• Delhi Airport - Raised USD 289mn through an international bond issue

• DIAL Real Estate - RFP issued for monetising additional 23 acres for retail district

• Hyderabad Airport – Restarted collection of User Development Fee (UDF) under ‘Hybrid Till’

methodology of tariff determination; Submitted tariff proposal for second control period with AERA

• Mactan Cebu Airport, Philippines – Construction ongoing for expanding capacity to 16 mn pax in Phase

1; current throughput at 8 mn pax in CY15 compared to a capacity of 5 mn pax

• Maldives Airport - Arbitration Tribunal has ruled that unilateral termination of the concession agreement

by Govt. of Maldives (GoM) was illegal & repudiatory. The Tribunal in Jun'15 issued the 2nd part final

award clarifying that the quantum of damages must be assessed assuming the date of termination to be

in Dec’12. Also in Feb’16, in its 3rd part final award, Tribunal further ruled that the damages payable by

GoM and MACL will also include all the sums owed to the project lenders

Highways

• Hungud Hospet project – Signed Share Purchase Agreement to divest our 51% stake at a Price/book

value of 1.1x; already transferred 15% stake in Mar’16

• Tindivanam Ulundurpet project – Signed Share Purchase Agreement to divest to the balance 26% stake

to India Infrastructure Fund

Urban Infra &

EPC

• Krishnagiri SEZ - First Electronic Manufacturing Cluster (EMC) in the country approved in principle by

Govt. of India, monetizing 527 acres of land with govt. grant of INR 2.6bn [USD 43mn]

• DFCC project - GIL led consortium has won two packages of Eastern Dedicated Freight Corridor project

worth INR 51bn [~USD 850mn]

USD 1 = INR 60


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Total Assets (INR bn)

16.6

24.8 25.9 25.5

42.6

FY12 FY13 FY14 FY15 FY16

75.9

82.6 86.4 88.9

109.5


Net Revenue (INR bn) EBITDA (INR bn)

Key Financial Indicators (Consolidated)

Debt Position as on 31 March 2016

Corporate Debt

INR 64bn 14%

Project Debt

INR 405bn 86%

Gross & Net Debt (INR bn) Sector wise Debt breakup Gross debt bifurcation

468.9

67.7

401.2

Gross Debt Cash &equivalents

Net Debt

Airport 22%

Energy 52%

Roads 7%

Others 5%

Corporate 14%

562

638 651 667 672



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• Consolidate existing Energy & Highways projects

• Capex holiday in Energy & Highway projects

• Explore select profitable opportunities in the Airport sector

• Focus on consolidation and strengthening of balance sheet through deleveraging

• Continuous reduction of Corporate Debt

• Refinancing of project debt through capital market / bank refinancing route to result into

• Reduction of interest rate,

• Projects getting longer moratorium and

• Extending maturity of debt primarily to align the repayment schedule with the Cash Flows of the project

• Capital raising through IPO GMR Airports Ltd

• Induction of strategic / financial partner in Airport holding company

• Divestment of certain operational Energy / Highway projects

• Recovery of receivables from (a) Maldives arbitration, (b) Energy Distribution companies, (c) Air India, etc

Focus for next 12- 18 Months

Focus on strengthening of Balance Sheet through reduction of debt

Group Strategy

Financial Initiatives to Strengthen the Balance Sheet


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Summing Up - Key Takeaways

Capex phase complete; entered cash flow generation phase

Diversity across business segments – To ensure stability of cash flows

Continued focus on asset monetisation post value creation - Released INR 39bn [USD 653mn] equity and reduced

liabilities by INR 73bn [USD 1.2bn] through strategic divestment over last 24 months

Government’s renewed focus on infrastructure and resolution of impediments are likely to provide boost to GMR

GMR will continue to focus on rationalizing capital management while capturing growth in Indian infrastructure sector

Delivered world class assets in record time like Delhi and Hyderabad airport - Received various awards & recognitions

Reduction in interest rates to boost profitability through project refinancing

Strong track record of raising capital - Total Capital Raised of INR 65bn [USD 1.1bn] since FY’12 (excl. divestments)

USD 1 = INR 60

Experienced Leadership and Management teams duly guided by the Group Performance Advisory Council


Thank You

For further information, please visit

Website: www.gmrgroup.in or

Contact: [email protected]

http://www.gmrgroup.in/

mailto:[email protected]

Documents

Pitchbook US template - GMR Group Presentation - June 2016.pdf · • Public and Community Toilets built Empowerment and Livelihoods • 8 training institutes for unemployed youth;