Pitchbook US template - GMR Groupinvestor.gmrgroup.in/pdf/GMR Infrastructure - Investor Presentation...Over the last 33 years has successfully led the GMR group, creating infrastructure

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

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Investor Presentation

December 2015


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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

• Over the last 33 years 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 for over

18 years

• 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

• 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 40 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 18 years old with a Balance Sheet of INR 651bn [USD 11bn]

• 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)

11

Business Overview

AIRPORTS

~100 mn Passenger Capacity • 2 Domestic Airports in Delhi and Hyderabad

• 1 International Airport in Philippines : Mactan - Cebu Airport

ENERGY

~4,800 MW Power Generation Capacity • 3,000MW of Coal Based Plants

• 1,400MW of Gas Based Plants

• 180MW of Hydro Plant – under construction

• 25MW of Solar Plants / 3.4MW of Wind Power Plants

• 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% 92.6% 100%

Promoter & Promoter Group

61.0%

FIIs 17.7%

MF & DIIs 7.9%

Others 13.5%

Shareholding

as on Sept 30,

2015 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) 85% Tambaram Tindivanam 100%

Chennai Power Plant (200 MW) 51% Pochanpalli 100%

Operational Gas based Projects Chennai ORR 90%

Kakinada Power Plant (235 MW) 100%

Vemagiri Power Plant (388 MW) 100% Ambala Chandigarh 100%

Rajahmundry Power Project (768 MW) 100% Hungund Hospet 51%

Operational Renewable Energy Projects Hyderabad Vijaywada 90%

Solar Power Project (25 MW) 100% Faruknagar Jadcherla 26%

Wind Power Projects (3.4 MW) 100% Tindivanam Ulundurpet 26%

Operational Transmission Projects

Aravali Line (96 kms) 100%

Maru Line (269 kms) 100%

Under Construction

Chhattisgarh Power Project (1,370 MW) 100%

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%


Airport Sector


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GMR Airports: Assets

Three world class emerging markets airports

• World class airports - Aggregate capacity of ~100mn 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 – H1FY16 22.8 mn Pax;

176,861 ATMs*

6.0 mn Pax;

50,076 ATMs*

4.1 mn Pax;

33,570 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 Airport Tribunal

MoCA has directed AERA to adopt ‘Hybrid Till’ for tariff fixation

against the ‘Single Till’ mechanism approved by AERA earlier

• UDF collection started post DGCA notification restoring the

collection of Airport Charges with effect from 03 Nov’15

GHIAL’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 and for curtailment of pre-control period

losses by INR 1.8bn [USD 30mn]

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 existing 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

• Security clearances received for aero city hotels

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

Holiday Inn and Ibis Hotel

− Novotel and Pullman are yet to be operational

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

• Hospitality District, the first phase of 45 acres of development,

constitutes of hospitality and commercial assets

• Initiated the next phase of land development

• RFQ issued for monetising 23 acres in Phase II

− 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 within FY16

Aerotropolis Phase - II : 23 Acres of Retail District


Energy Sector


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Energy Assets

Indonesia - PT Barasentosa

Lestari

Bajoli Holi - GBHHPL

(180MW / Hydro)

Rajasthan - Maru (269 kms)

Rajasthan – Aravali (96 kms)

Kutch

(2.1MW/ Wind)

Chhattisgarh – GCEL

(1,370MW / Coal)

Warora - EMCO

(600MW / Coal)

Chennai - GPCL

(200MW / LSHS)

Gujarat Solar

(Patan) - GGSPPL

(25MW/Solar)

Kamalanga (Phase 1) -

GKEL

(1,050MW / Coal)

Kakinada - GEL

(235MW / Gas)

Rajahmundry - GREL

(768MW / Gas)

Vemagiri - GVPGL

(388MW / Gas)

Operational / Ready to

operate Assets

Legends:

1,878 MW in operation, 1,391 MW ready to operate & 1,550 MW under construction

Tirupur

(1.25MW/Wind)

Indonesia - Golden Energy

Mines

Projects Under Construction

Transmission Projects

Coal Mines

Operational 39%

Under construction

32%

Ready to operate 29%

Capacity by stage

Coal 63%

Hydro 4%

Natural Gas 29%

Others 5%

Fuel based capacity

4,819 MW 4,819 MW


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Coal Projects (3,000 MW) - Entering Phase of Stable Cashflows

COD

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

PPA

Fuel Linkage

PLF

Refinancing

Others

• First unit synchronised

• 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 H1FY16

• To improve once TANGEDCO (Tamil

Nadu) PPA (150MW) fullystarts

• PLF of ~63% in H1FY16

• Has improved as evacuation issues are

now resolved

• 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 in the

finalisation stage under 5/25 scheme

• Would lead to 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 56 MW power to

TANGEDCO has commenced; it would

be fully operational shortly

• Favorable order from CERC on

maintainability wrt tariff determination

petition for GRIDCO

• Awaiting hearing from CERC for

petition filed against Haryana for

“Change in Law”

• Transmission lines are completed and

charged

• Coal mining at Talabira started from

Aug’15

• Achieved CoD in March 2014 • Achieved CoD in 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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Ensured Fuel Security through owning 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 MT

Extractable Reserve 9 MT 92 MT

Mining Plan 3 MTPA 4 MTPA

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 - Ready to Operate

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 45.9bn [USD 765mn]

Commencement

of Generation January 2008 June 2010 Based on Gas availability

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 - valid until Oct 2015

• 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)

• Post restart of gas supply through the RLNG

scheme, PLF in Q2FY16 stood at 22%

• 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)

• 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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Key Policy Measures to Ensure Gas Availability

~1,400 MW gas based plants are idle due to non-availability of fuel

As per the gas subsidy proposal of GoI under the Scheme for Utilization Stranded Gas based power plants

− GAIL is appointed as ‘e-bid RLNG Operator’ and would supply gas to all stranded gas based power

plants to run the plants at a pre-determined PLF

− SEBs to pay fixed tariff

− Additional tariff would be subsidised by GoI through the Power System Development Fund (PSDF)

− Gas to be supplied at fixed cost to power producers

Recent gas policy has kick-started stranded gas based power projects

GMR has won gas for two of it’s power projects

GMR has won right to receive imported R-LNG for two of it’s power projects in both the first & second round of

Gas Auctions

Mechanism ensures a tariff of INR 6.14/unit - INR 4.7/unit from SEB and a subsidy support of INR 1.44/unit

from GoI through the Power System Development Fund (PSDF)

Based on first round of Auctions, Vemagiri Power Plant (370MW) commenced operation from 12 Aug 2015 and

is running at 25% PLF till end-Sep’15

In the second round of Auctions, both Vemagiri power project and Rajahmundhry power project (768MW)

would be operational during H2FY16 to run at 50% PLF


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 TTTEPL 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% 51% 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 – –

Divested 74%

stake in Sep13

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 5 large projects

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

‒ 1 Power project: Island Power Project, Singapore

‒ 2 Road projects: Jadcherla Expressway and Ulunderpet Expressway

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

• Released INR 38bn [USD 639mn] equity and reduced liabilities by INR 62bn [USD 1,030mn] through

divestments

Capital

Raising

• Total Capital Raised since FY08 - INR 133bn [USD 2.2bn] (excluding divestments)

• Raised INR 54.5bn [USD 908mn] in the last 24 months

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

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

o Warrants of INR 5.7bn [USD 95mn], out of which 25% has been received

o FCCB of INR 20.0bn [USD 300mn]

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

• EMCO & 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 Tamil Nadu PPA (EMCO) - Commenced supply from Q3FY16 onwards

• Chhattisgarh project (GCEL) - Achieved synchronization with the grid for Unit I (685MW)

• Fuel Security - Achieved fuel security for both coal and gas based power plants

o Talabira Coal Mines - Coal production started from Aug’15 & is getting dispatch to GCEL

o Gas availability - Awarded gas supply to run Vemagiri (VPGL) and Rajahmundhry plant (GREL)

• VPGL - Commences operation post Gas Auctions from Aug 2015 and reported a PLF of 22% in Q2FY16;

has won gas supply for 50% PLF (Phase 2) during H2FY16

• GREL – Won right to receive imported R-LNG to run the plant at 50% PLF during H2FY16

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

repayment schedule

o EMCO - Refinanced the project debt resulting in lower interest rate by 110bps along with principal

payment moratorium of 1.5 years and total loan tenure of 13.5 years

o Kamalanga - The refinancing of project debt under 5:25 is in final stage. It would lead to interest

rate reduction of ~100bps and moratorium of ~30months

• Upper Karnali Hydro project - Finalised and executed the Project Development Agreement for the

900MW hydro power project with the Nepal Govt in Sept’14


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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 - RFQ issued for monetising additional 23 acres for retail district

• Hyderabad Airport - Post MoCA‘s directive to AERA to adopt ‘Hybrid Till’ for tariff fixation, DGCA

recently issued a notification restoring the collection of Airport Charges with effect from 03 Nov’15

• Mactan Cebu Airport, Philippines - JV with Megawide Construction has been awarded the project for

airport rehabilitation, expansion and operation

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

by Govt. of Maldives 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

Highways

• Chennai ORR project - Operationalised w.e.f. June 2013

• Hungud Hospet project – Final (3rd) toll plaza operationalised w.e.f. May 2014

Urban Infra &

EPC

• Krishnagiri SIR - 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]

• Railway projects – GIL in consortium with Tata Projects & Kalindee Rail has won 2 projects on EPC in

Andhra Pradesh & Uttar Pradesh. The total value of projects is ~INR 6.6bn [USD 109mn]

• 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

17.6

FY12 FY13 FY14 FY15 H1FY16

75.9

82.6 86.4 88.9

60.6


Net Revenue (INR bn) EBITDA (INR bn)

Key Financial Indicators (Consolidated)

Debt Position as on 30 September 2015

Corporate Debt

INR 69bn 15%

Project Debt

INR 405bn 85%

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

474.7

60.9

413.8

Gross Debt Cash &equivalents

Net Debt

Airport 22%

Energy 48%

Roads 10%

Others 5%

Corporate 15%

562.3

638.2

651.4

667.4 670.0



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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 – aim to reduce by ~50%

• 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

• Conversion of existing warrants by promoters

• IPO of GMR Energy Ltd

• IPO of GMR Airports Ltd

• Induction of strategic or financial partner in certain operational energy and highway projects

• Sale of balance stakes (26%) in each of Ulunderpet and Jadcherla road assets

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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Energy Business

• Commencement of commercial operations of Chhattisgarh Power Project (1,370 MW)

• Improvement in PLF in coal based plants

• Reduction in losses & improved debt servicing of gas based power plants- through the recent gas policy

Delhi Airport

• Land Monetization

• Decision by the Appellate Tribunal on RE

• Treatment of security deposits at Delhi Airport

Hyderabad Airport

• Decision by the Appellate Tribunal on ROE and pre-control period losses

Male Airport

• Decision on Arbitration for cancelation of concession agreement

Focus for next 12- 18 Months (cont.)

Focus on stabilising projects and improve profitability

Operational Initiatives to improve Profitability


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Summing Up - Key Takeaways

Capex phase nearly 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 38bn [USD 633mn] equity and reduced

liabilities by INR 62bn [USD 1bn] 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 133bn [USD 2.2bn] since FY’08 (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 Groupinvestor.gmrgroup.in/pdf/GMR Infrastructure - Investor Presentation...Over the last 33 years has successfully led the GMR group, creating infrastructure