Smart metering investment

opportunity

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 Agenda

GMR: Pivoting to Green

Smart Metering Opportunity

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 GMR: A diversified infra conglomerate with significant presence in energy

1 2 3

Airports Energy Transport & UI

2nd largest private airport developer in
the world (largest in India)
10Cr.+ passengers in FY20
8 Airports under operation or at various
stages of development
~2500 acres of land with strong potential
for Real Estate dev.
~4.5 GW of total generation capacity,
over 2.8 GW already commissioned
Diversified power generation mix:
Coal (~1.6 GW), Natural Gas ( ~1.1
GW), Hydro (~0.2 GW)
4 highway projects covering a total of
~350 km
~1,900 acres of land at strategic
locations, integrated industrial
development
417 km of railway stretch under
construction

Net asset base of ₹50,000 Cr. → amongst the largest infrastructure development companies in India
Up, down, across the energy value chain
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 GMR Energy: ‘Grey’ to ‘Green’ transition by building 4 new energy platforms.

1• Smart Mobility: energy replenishment solutions including EV charging,

battery swapping along with end-to-end management (Discovery → Billing)

2• Net Zero for C&I: full stack solutions including C&I solar,
power trading, energy efficiency, CCUS, Green H2

• GMR’s Legacy Assets:

improve efficiency and
profitability across Coal
(~1.6GW) and Natural gas
(~1.1GW)

• Round the Clock Power Supply:

3 bundling of solar + other sources
(e.g., thermal, wind, battery)

4• House of the Consumer:

solutions including smart metering
and distribution franchise & license
• GMR’s Pipeline Hydro Assets: improve
and operationalize assets, participate in
green RTC tenders
– Operational: Bajoli Holi (~180MW)
– Current Assets: Upper Karnali (~900MW),
Alaknanda (~300MW), Talong (~225MW)

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 Agenda

GMR: Pivoting to Green

Smart Metering Opportunity

o Industry Landscape

o UP Smart Metering Project

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 Industry Landscape: Overview

Financial Health of State DISCOMs Revamped Distribution Sector Scheme (RDSS)

Scheme Funding Structure Smart Meter Industry Landscape

Average AT&C
losses of 16.5%  ~10 Cr. Smart meter bids are expected to come in the
• Reduce AT&C losses to 12-14% by 2025 next 12 - 18 months.
AIM
AIM • Reduce ACS-ARR gap to zero by 2025
 The target date for scheme completion is 31st March 2026.

PART A • Funding DISCOMs for smart meter

~10.6 Cr.

Details of govt. support for smart metering projects ~3.4 Cr. ~25 Cr.
AT&C <10%
Target **Govt. Grants
AT&C 10-15%

AT&C >15%
~10.3 Cr.
25 Cr. smart 15% of cost per
Smart Metering
meters meter

~0.7 Cr.
▪ Total outlay for entire RDSS scheme is ~₹3,00,000 Cr.
❑ State DISCOMs are in dire financial conditions
due to low collection efficiency and poor infra. ▪ **Govt. grant amounting to 15% of cost is ~₹23,300 Cr.

❑ Govt. of India has introduced targeted support ▪ Counterpart funding to DISCOMs by Power Finance Corp. Installed Closed Open Future Govt.
schemes to uplift DISCOM’s financial situation. (PFC) and Rural Electrification Corp.(REC). Bids Tenders Tenders target

*Validity : 31st March 2026 | ** Govt. grant is provided by Central Government to DISCOM as budgetary support. • 6
 Agenda

GMR: Pivoting to Green

Smart Metering Opportunity

o Industry Landscape

 Revamped distribution sector scheme (RDSS)

o UP Smart Metering Project

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 Key highlights of Smart Metering under RDSS

Tripartite agreement based on guidelines on Revamped Distribution Sector Scheme has been signed by most of the DISCOMs
for its implementation. For smart metering, DBFOOT model has been suggested.

While the target is for the installation of 25 Cr. smart meters by 2026, the scheme is phased as follows:

❖ Phase 1: ~10 Cr. smart meter replacement, integration and O&M. Would include prioritised urban areas (cities under
AMRUT) and other potential areas.

❖ Phase 2: Balance ~ 15 Cr. smart meter replacement, integration, and O&M. Would include suburban and rural areas.

Key irritant regarding counterparty risk has been addressed in the revised SBD for the appointment of AMISPs. It has included a
provision for direct payment from the payment gateway to the AMISP, thereby curtailing the payment risk from DISCOM.

As per MoP’s direction, empanelment activity is being conducted to test the capability of companies interested in participating in
AMNISP tenders. The REC empanelment process includes a demo process that must be done at CPRI Bangalore. GMR is
among the first companies to get empanelled for both Cellular and RF communication.

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 Parts under RDSS

Scope Financial Outlay

PART A-1
Revamped Distribution Sector*
Prepaid Smart Metering including at Outlay of ₹1,50,800 Crores with an
Consumer, DT, Feeder estimated grant of ₹23,300 Crores

PART A-2
Distribution Infrastructure Works including
Outlay of ₹1,51,528 Crores with an
Loss Reduction & System Strengthening
estimated grant of ₹73,301 Crores
Works
PART B

Training & Capacity Building + Other Outlay of ₹1,430 Crores with estimated
enabling & supporting Activities grant of ₹1,030 Crores

* Private DISCOMs excluded from the scheme

Total Outlay of ₹3,03,758 Crore with estimated GBS of ₹97,631 Crore

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 Funding pattern under RDSS

S No Description Quantity Outlay (₹Cr) GBS % (Max) GBS (₹Cr)

Prepaid Smart Metering at consumer (excl. agricultural connections), DT, 15% (limited to ₹900
Feeder, including integration of existing infrastructure 25 Crore per meter for
Phase 1: (in phases) consumers) for Non-
i. Consumers in Electrical Divisions of: Special category states.
• 500 Amrut cities with AT&C Loss > 15%.
A-1 • All UTs. 1,50,000 For Special category* 22,500
• MSMEs. 10 Crore in states, the
• Industrial and commercial consumers. phase 1 and corresponding grant
• All govt & block-level offices, other areas with high losses. the balance would be ₹1350 or
ii. All system metering at Feeder and DT level. in phase 2. 22.5% per meter for
iii. Artificial Intelligence generated through IT/OT devices to be leveraged. consumers

Other costs include free standardised billing modules for all states, data
A-2 Lumpsum 800 100% 800
management, data analytics, etc.

Sub Total : Funding for Smart Metering 1,50,800 23,300

90% for special

Distribution Infrastructure works, including SCADA, DMS, AB Cables, Feeder
A-3 to A-6 1,51,528 category states and 73,301
Segregation, etc.
60% for rest

B1 to B4 Part B 1,430 100% 1,030

Total 3,03,758 97,631

*Special category states include – Northeastern states including Sikkim, J&K, Ladakh, HP, Uttarakhand, Andaman & Nicobar Islands, Lakshadweep
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 Agenda

GMR: Pivoting to Green

Smart Metering Opportunity

o Industry Landscape

 Installation and bid status

o UP Smart Metering Project

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 Smart metering installation update

State wise update Agency / Scheme-wise update

All India Status

Agency Wise Sanctioned Installed SM Installed SM Prepaid

EESL 78,13,246 30,09,019 11,37,433

PFCCL 1,51,740 1,45,769 0

RECPDCL 1,44,933 1,38,070 0

Utility 25,95,832 17,07,523 67,648

GRAND TOTAL 1,07,05,751 50,00,381 12,05,081

Scheme Wise Sanctioned Installed SM Installed SM Prepaid

DDUGJY 39,200 38,400 0

1,200.0
1,100.0 IPDS 12,60,818 8,10,250 0

NSGM 1,79,433 1,43,651 0

538.3 556.0 PMDP 1,15,500 1,13,857 0

415.1
259.1 243.3 SG Pilot 1,56,533 1,56,533 0
147.1113.9 124.9
75.2 88.1
2.0 24.2 23.8 20.9 0.1 4.5 30.6 8.9 43.1 15.2
Utility owned 89,54,267 37,37,690 12,05,081

GRAND TOTAL 1,07,05,751 50,00,381 12,05,081

Source: nsm.gov.in • 12
 Smart metering bids - Closed

Himachal: RDSS Jammu and Kashmir: RDSS

No of Opportunities: 3 No of Opportunities: 2
Consumer: ~28.5 Lakhs Consumer: ~15 Lakhs

Uttarakhand: RDSS
Uttar Pradesh: RDSS
No of Opportunities: 2
No of Opportunities: 4
Consumer: ~17 Lakh
Consumer: ~1.4 Crore
Assam: RDSS
Gujarat: RDSS No of Opportunities: 7
No of Opportunities: 2 Consumer: ~60 lakhs
Consumer: ~41 Lakh
Manipur: RDSS
PGCIL: RDSS No of Opportunities: 1
No of Opportunities: 4 Consumer: ~2 lakhs
Consumer: 1 crore (25 L
each) Meghalaya: RDSS
No of Opportunities: 3
Consumer: 5 Lakh
MP: KFW
No of Opportunities: 3 Tripura: RDSS
Consumer: ~25 Lakhs No of Opportunities: 1
Consumer: ~4 lakhs
Maharashtra: RDSS
No of Opportunities: 7 West Bengal: non RDSS
Consumer: ~2.42 Crore No of Opportunities: 1
Consumer: 4.8 Lakh
Puducherry: RDSS
Andhra Pradesh RDSS No of Opportunities: 1 Bihar: RDSS
No of Opportunities: 3 Consumer: 4 Lakh No of Opportunities: 4
Consumer: ~26 Lakh
Consumer: ~1.12 Crore

Kerala RDSS Chhattisgarh: RDSS Jharkhand: RDSS

No of Opportunities: 1 No of Opportunities: 3 No of Opportunities: 4
Consumer: ~37.6 Lakh Consumer: 72 Lakh Consumer: ~17 Lakhs

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 Smart metering bids - Live

Punjab: RDSS
No of Opportunities: 6
Consumer: ~90 Lakhs

Uttar Pradesh: RDSS

No of Opportunities: 3
Consumer: ~0.79 Crore West Bengal: non RDSS
No of Opportunities: 1
Consumer: 40 Lakh

Rajasthan: RDSS
No of Opportunities: 10 MP: RDSS
Consumer: ~1.4 Crore No of Opportunities: 3
Consumer: ~25 Lakhs

Goa: RDSS Tamil Nadu: RDSS

No of Opportunities: 1 No of Opportunities: 2
Consumer: ~7.5 Lakhs Consumer: 1.83 Crore

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 Agenda

GMR: Pivoting to Green

Smart Metering Opportunity

o Industry Landscape

 Key bidding details and contractual terms

o UP Smart Metering Project

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 Bidding process – overview and strategy

Bidding Process Bidding process, parameter, security requirement, and qualification requirement

1 Bidding is based on a Standard Bidding Document prepared by MoP/REC and circulated to DISCOMs to adhere to.

Technical and Financial Pre-Qualification requirements need to be met by the bidder. Salient features are us under:

• Bidder shall have experience of executing eligible projects of 50% of the value of the Estimated Project cost.
2 Technical • Bidder shall have experience of executing eligible projects of 50% of the value of the Estimated Project cost.
• System integration experience of at least 20,000 nodes

Financial • Net worth in any of the last 3 year should be 30% of the estimated project cost.

3 Empanelment certificate with REC as an AMISP is a prerequisite (GMR has been the first to get the certification)

Most of the discoms as the present ones in UP follow the L-1 Bidding process after technical qualification; while Reverse Auction is
4
also being conducted by some of the discoms.

Performance security is 3% of the contract price till the Installation Milestone & 1.5% of the contract price for the O&M period (in
5
the form of a Bank Guarantee)

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 Key contractual terms

Key contractual terms Termination, LD, force majeure, change of law, meter replacement

1 Clear timelines and milestones defined in the bid for project implementation

2 AMISP, too shall have the right to terminate the contract in case of DISCOM’s default

3 For delay in achieving the milestone, LD shall be applicable, and for achieving early incentive shall be paid by the DISCOM

4 DISCOM is responsible for providing access to customer premises & support in case of any admin. challenges on ground

5 Change in law provision mitigates the risk of financial impact due to any change in the law by Govt.

6 Force Majeure secures the risk of damage to the assets and any financial implications which includes natural calamity too

7 In case of intentional damage to meters for which AMISP is not responsible, DISCOM shall reimburse the price for replacement

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 Revenue model

Revenue model Types and method of payment

AMISP shall be paid on the basis of the following:

1 Opex charge on monthly basis

2 One-time Capex (₹900 / meter) along with the first monthly Opex charge of any particular meter

3 Cable replacement on quarterly basis.

4 Meters replaced due to theft, vandalism etc. on monthly basis

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 Agenda

GMR: Pivoting to Green

Smart Metering Opportunity

o Industry Landscape

o UP Smart Metering Project

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 UP Smart Metering Project - Overview

Bid Varanasi & Azamgarh Allahabad & Mirzapur Agra & Aligarh

DISCOM PuVNNL DVVNL

Scope of work Supply, installation, integration, testing and commissioning of hard and soft infrastructure; and O&M

Number of meters 27.3 Lakhs 22.9 Lakhs 25.5 Lakhs

Installation period 27 months

O&M period 93 months

• Lump sum payment of ~₹900 per meter upon installation

Revenue structure • Lump sum payment on installation and commissioning of cables
• Monthly charge per month per meter as opex charge

• Majority of smart meters are single-phase meters, making up ~ 89-94% (69.7 Lakh meters)
Meters and cables • Cables are only required for ~30% of the meters
• 2 Cored – 6 mm Armored cables account for ~ 86-99% of the total cable length

The smart metering project shall be a PPP under the DBFOOT (Design, Build, Finance, Operate, Own, Transfer) Model

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 Counterparty Analysis

(Past 3-year averages PuVVNL DVVNL

over FY20 to FY22) (Purvanchal Vidyut Vitran Nigam Limited) (Dakshinanchal Vidyut Vitran Nigam Limited)

# of consumers* 84,09,252 57,63,672

Revenue (₹ Cr.) 16,995 14,012

PAT (₹ Cr.) -1,819 -1,921

ACS-ARR gap (₹/kWh) 0.83 1.00

Billing efficiency 79.63% 75.73%

Collection efficiency 80.79% 88.05%

AT&C losses 35.67% 33.49%

*FY22 only

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 Key Stakeholders Involved

Split b/w RF & cellular to reduce dependence on single tech while

ensuring cost competitiveness
• Meters, cables, and accessories supply
Meters and < Co
• Warranty support Cables mm • RF / Cellular / NB-IoT component supply
un
ic • Communication service
• Test reports a

tio
n>
GMR Single vendor with a proven track record for cloud and
software for efficient integration
AMISP
• Data storage (Advanced
Metering • HES (Head End System) and MDM (Meter Data
• Data Security Cloud Software
Infrastructure Management) supply
Service
• Disaster recovery Provider) • Integration of HES with MDM , HES with meters

• Project management • Documentation

• Installation of meters • Project scheduling • Implementing governance
framework
• Maintenance during the operational period Installation • Project financing
& O&M • Preparation of O&M SOPs
• MIS Reporting
• Testing and quality assurance
Outsourced to agencies with local expertise • Training to DISCOM officials

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 Revenue Streams

Payment structure to GMR by DISCOM

BUILD-UP PHASE:
O&M PHASE: 5 - 6.5 years
1.5 - 3 years

One-time payment on installation of meters

(₹900/ meter)
Generating operational income during the installation phase itself
Complete payment for cables on their installation
and commissioning
Capex Payment
Monthly fee for each operational meter Opex Payment

S.No Payment mechanism Applicable revenue streams

▪ One-time payment on installation of meters

Payment 1 Direct Debit Facility
▪ Monthly fee for each operational meter
mechanism
2 Electronic Transfer by DISCOM ▪ Payment of cables on their installation and commissioning

If DISCOM fails to clear outstanding payment within 45 days in case of Direct Debit and within 60 days in case of electronic
transfer, interest shall be applicable at MCLR + 400 bps

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 Project Ownership / Capital Structure

Proposed Structure Brief of structure

GMR Power Urban Infra Ltd

• GSEDPL with Bosch as consortium partner
(GPUIL) participated in bid

• Bosch as tech qualified partner to hold 10% equity

100%
stake
GMR Smart Electricity
Bosch • GPUIL will be parent company having 100% stake
(BidCo) in Bidco.
(Technically Qualified
Partner) 90% • As per the bidding parameter, SPV will be formed
specifically to implement the project.
10% New SPV
• All Project cash flows will be generated in Project
(Project SPV )
SPV.

Have had initial discussions with

Targeted to be financed at Debt : Equity of 70:30 few prospective lenders who are
Expected Total Project
▪ Debt: ~₹2,1000 Cr. inclined to support the project
Cost: ~₹3,000 Cr.
▪ Equity: ~₹ 900 Cr. through debt funding

The Smart metering projects present a very good business case for investment with healthy returns and minimal risk.

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 Additional Benefits of Smart Metering Business

Backward integration Forward integration

Meter Manufacturing Data Monetisation

There is potential for upstream integration by entering into meter Consumer’s energy meter data opens up avenues for various data-
manufacturing. This can: driven services, including:
❖ Provide the company with greater control over the production ❖ With DISCOMs: Assessment of load, Grid failure prediction
process, ensuring higher quality standards and potentially reducing
❖ With consumers: Behaviour-based energy efficiency programs,
costs
GMR’s Smart Equipment maintenance
❖ Diversify its portfolio into the manufacturing business
Metering ❖ With third parties: Consumer insights for targeted advertising,
Insurance underwriting, Assessing creditworthiness, Urban planning
Business

Technology Development Ancillary Business Opportunities

Smart metering business has significant alignment with communication
and data-based technology (HES, MDM, cloud)
❖ There is potential for GMR to diversify into the software business,
either directly, or through the multiple partnerships developed
through the smart metering business
❖ Entry into other B2C energy domains such as residential solar,
leveraging the direct consumer touchpoints during installation,
increased brand recognition, and insights from consumer data.
❖ Future DISCOM-linked business opportunities in the state, e.g.,
Distribution Licensee / Franchisee.

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 Key Investment Highlights

GMR Group Advantage Meter Procurement - No Constraints

• Partnered with best-in-class international players across key businesses to deliver world- • Sourcing from well-established suppliers
class infrastructure • Diversification of supply base from 2-3 vendors instead of one
• Over three decades of strong development capabilities – built & operationalised best-in-class • Apart from Factory Acceptance Test & Sight Acceptance Test, GMR will undertake a halt
4500 MW power assets, second largest airport developer test from the accredited labs
• Strong group parentage and corporate governance – a leading infrastructure & IPP player
• Strong management & leadership team
Ease of
Group
Meter
Advantage
Procurement

Short Gestation Period - Immediate Revenue Generation

Future Opportunities for Scaling up of Business
• Meters to be installed progressively in 27 months
Stable Investment Future • Various DISCOMs are expected to float tender in the near future to
• Commencement of revenue generation immediately on Cash Flow Highlights Opportuniti reduce their A&TC losses
operationalization of meters (subject to achievement of operational-go- es
live) during the installation period • Huge scope to ramp up growth trajectory by seizing multiple
growth opportunities
• Cash flow realization during installation itself
Robust
Payment Attractive
Security IRR

Clear Visibility of Revenue Stream / Robust Payment

Security mechanism
• Firm long-term contract for 10 years will be in place with utility
Strong Financials
• Healthy IRR and EBIDTA margin business with robust cash flows stream
• Direct debit facility to prompt payments from DISCOM AMISP
• Strong / Comfortable DSCR – Bankable project
• Failure to establish DDF or delay in payment by the Utility by more than 90 days considered
as DISCOM EOD

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Thank You
 Direct Debit Facility

Direct
Debit
Facility

• Utility to set up Direct Debit Facility (DDF) upfront

• Bucket filling approach to AMISP payments – payment routed directly to AMISP till its share is recovered completely
Key o Utility to select payment gateway which has monthly inflow of at least 5X of estimated monthly payment to AMISP
*As per latest REC guidelines
Features o Ensures daily inflow of at least 1/10th of monthly invoice from 11th working day till 100% of AMISP payment is cleared
o Payment classified as O&M payment under waterfall mechanism
• Failure to establish the Direct Debit Facility considered as Utility’s Event of Default

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 Scope of Work

Supply, installation, integration, testing & commissioning of:

1 • Hardware Infrastructure
Hardware Infrastructure

• Smart pre-paid meters

• Auxiliary components such as cables
• Associated hardware requirements such as DTs, Feeders, meter boxes etc.

2 • Software Infrastructure
Software Infrastructure

• Head End System (HES) and deployment on cloud

• Meter Data Management (MDM) with prepaid functionality and deployment on cloud
• Consumer portal & mobile application and its integration

3 Communication/ Cloud Infrastructure

• Reliable Communication technology (RF / Cellular)

• NMS (Network Management System) for monitoring of communication network
• Network Operation cum Monitoring Centre (NOMC) with suitable backend communication infrastructure, hardware
and power supply

Integration and O&M:

• AMI System • Automated energy audit reports
• Consumer Indexing • O&M support services
• Development of a comprehensive consumer • Training of utility personnel
engagement plan

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 Project Implementation Schedule

The date of signing of the Contract is considered as Day 0 for the project. The project implementation schedule with respect to Day 0 is as follows:

S No. Milestone Timeline

1 ▪ Submission of detailed implementation plan to Utility Day 0 + [60] days

2 ▪ Approval of detailed Project Implementation Plan by Utility Submission of Project Implementation Plan + [15] Days

3 ▪ Delivery, installation, integration, and operationalization of 100% of Feeder Meters Day 0 + [9] months

▪ Setting up Network Operations cum Monitoring Centre (NOMC)

4 Day 0 + [7] months
▪ Delivery, installation, integration, and operationalization of 5% of Smart Meters
LD applicable
in case of
delay

5 ▪ Delivery, installation, integration, and operationalization of 50% of Smart Meters Day 0 + [18] months

6 ▪ Delivery, installation, integration, and operationalization of 100% of DT Meters Day 0 + [18] months

7 ▪ Installation Milestone (100% Installation) Incentive Day 0 + [27] months

applicable in case
8 ▪ Operational Period of the AMI System (O&M) of early installation Installation milestone + Maximum [93] months

At the end of Term of the Contract in accordance with Exit Management

9 ▪ Transfer of AMI system to the Utility
Plan.

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