india infrastructure trust

INDIA INFRASTRUCTURE TRUST

AUGUST 2021

CORPORATE PRESENTATION

22

• Brookfield is one of the world’s leading asset manager with an AUM of over US$ 600 Bn and presence in 30+ countries

• Oil & gas midstream portfolio includes ~15,000 kms of transmission pipelines and ~600 Bn cubic ft. of gas storage

• Present in India since the last 12 years and has built an AUM of over US$ 21 Bn in the country

India’s longest privately owned cross country gas pipeline originating from the gas rich Krishna Godavari Basin

ROUTE MAP

1st

Pure gas transmission InvIT

1,375 kmsCross country,

5 states, Bi- directional

2008-09Vintage

Rs 11 Bn+Distribution for FY

2020-21

85 mmscmdTransmission

capacity

~18 yearsResidual contract

CRISILAAA/Stable

Credit rating

Backed by a Distinguished Sponsor with a history of over 120 years in owning and operating assets

RIL, ONGCAnchor suppliers

LongestPrivately owned pipeline in India

Company Overview

33

Benefitting from the ramp up in Reliance’s KG-D6

Favorable Demand-Supply Dynamics in the Indian Gas

Industry

02

03

04

05

06

01

PIL – A Strategically Important Pipeline

Strong Focus on ESG

Consistent Track Record of Distribution

Experienced Management Team backed by a Strong

Sponsor Group

Key Investment Highlights

44

144 153 162 167 175 166180-185

212-218

FY16 FY17 FY18 FY19 FY20 FY21 FY22P FY25P

46%

54%

FY21 Gas supply

Domestic Production LNG Import

As majority of supply is still being importedIndia’s gas consumption is highly underpenetrated compared to

both developed and developing nations

54% 52%

32%27% 24% 24%

12%8%

6%

Russia MiddleEast

USA Africa Europe World APAC China India

Gas Contribution to Total Energy Consumption

Source: PPAC, BP Statistical Review 2020, CRISIL Research, Public information

1

Large headroom for growth as the Indian Government has committed to increase gas contribution to 15% by 2030

Domestic gas demand seeing a strong revival in FY22 after being impacted by COVID in FY21

In mmscmd

5-7% CAGRCovid Impact

5.1% CAGR 8-10%

Next 5 Years to be a Golden Period for the Indian Gas Industry

55

11% 17% 18%

46%70%45

80 86

178

228

Round 3 Round 7 (Jun' 16) Round 8 (Nov' 16) Round 9 (Apr' 18) Round 10 (Nov'18)

% of populaton covered Cumulative GAs

Source: PPAC, BP Statistical Review 2020, Public information, CRISIL Research

1

Upcoming CGDs laying out additional gas distribution infrastructure leading to an uptick in demand

Indian gas industry has a diverse mix of customers

(0.2)%Fertilizers

Power

CGD

Refinery

Petrochem

Sectoral growth in demand

FY16-FY20(CAGR)

FY21P(on-year)

FY21-FY25(CAGR)

11% 4-6%

0.4% (2)% 0-1%

10% (12)% 13-16%

11.3% 2% 7-9%

(1.2)% (14)% 7-9%

~140 new CGDs expected to come on-stream in 3-5 years

Sector specific tailwinds in place to drive future growth

Conversion of naptha based units, revival of existing units & capacity additions under New Urea Investment Policy – MFCL, Ramagundam

Focus on clean energy to revive gas demand

Expansion in CNG network and industrial sectors

Better connectivity of gas infrastructure

Increase in petrochemical capacities

29%

18%

15%

13% 5%

FY21 demand by industry

Fertilizers Power CGD Refinery Petrochemicals

Better Connectivity Driving Demand Growth

66

7

19

30

Q4FY21 June' 21 2023E

RIL Production expected to ramp up at KG D6 as all 3 fields go live

Production has started in 2 of 3 discovered fields by RIL

Legacy fields faced technical challenges due to which production had to be stopped

RIL discovered KG-D6 as India’s largest deposit of natural gas and the largest such discovery in the world in 2002

Krishna Godavari Basin covers more than 19,000 sq. miles

Production from the RIL-BP KGD6 gas fields is expected to reach its peak in the next few years

In mmscmd

Source: Company Disclosures, Public information

2

R-Cluster

ONGC is also investing heavily to increase production in its discoveries next to KG-D6

“”KGD6 will produce 30 MMSCMD gas production by 2023. This will establish Reliance again as one of the largest producers of gas in India, meeting 20% of India's gas demand””

- Mukesh Ambani at RIL AGM 2021

Dec-20

First production>>

~13

Peak production>>

Satellite Cluster

MJ

Apr-20 Oct-22(Exp.)

6 12In mmscmd

Ramp-up Expected in KG Basin Volumes

77

Strategically one of the most important pipelines in the country

PIL is the only pipeline connecting supply centers on the east coast to the demand centers on the west coast

3

Key Pipeline Networks Length (km)KG D6

connectivityArea

East-West Pipeline(PIL)

1,375 East/West

HVJ /VDPL(GAIL)

4,222 Central/

North

GSPL High Pressure Gas Grid (GSPL)

2,207 West/North

DVPL-II & VDPL(GAIL)

1,280 Central/

West

Dahej-Uran-Panvel-Dhabhol (GAIL)

815 West

KG Basin Network (GAIL)

878 South

Gujarat Regional Network (GAIL)

609 West

Fully operational pipeline > 500 kms in length

* As of March 31, 2021. Source: Company Disclosures, Public information

Current gas pipeline infrastructure in India

Ennore

Kochi

Dabhol

DahejHazira

MundraHVJ1 Pipeline

East West Pipeline

GAIL Pipeline Network

Existing LNG Terminals

Under Construction LNG Terminals

GSPL Pipeline Network

KG basin accounts for

50% of the country’s

estimated remaining

gas reserves

More than 65% of

India’s Gas Demand

comes from the West

& the North

Only cross-country

pipeline

19,968 km

Total length of operational Natural Gas pipelines*

Jaigarh

DhamraJafrabad

Chhara

Kakinada

PIL – A Strategically Important Pipeline

88

PIL has built relationships with key gas providers to help service their transportation requirements

3

ONGC

• Connected to ONGC terminals at Mallavaram and

Oduru in Andhra Pradesh

KG-D6

• Largest gas reserve in India

• Only pipeline connected to Gadimoga gas terminal

of RIL/BPEA on the east coast along with the KG-D6

gas reserves

Transport of RLNG

• Transports RLNG from Hazira and other terminals

on the west coast

• Potential to deliver RLNG from Dahej and other

terminals like Mundra through connected pipelines

Connecting Key Supply Sources Across India

99

3

City Gas Distribution

Note: Includes major consumers directly / indirectly supplied by PIL

With a Diversified Customer Base

1010

MTPA Present Capacity

Large LNG Opportunity3

Shell LNG Terminal, Hazira

17 Countries from where supplies are received

10 MTPAPotential capacity

5 Petronet LNG, Dahej 17.5

MTPAPresent Capacity

Potential future connections

Kakinada FSRUSwan LNG Jafrabad

Adani LNG, Dhamra

IOCL LNG, Ennore

>20 MTPA Potential Capacity

Direct connection

Current indirect connections

East West Pipeline is an integral part of the national LNG supply network with connections to major terminals in place

Largest Terminal in the country

Long term Contract

with RasGas to supplyLNG from Qatar

22.5 MTPAPotential capacity

Source: Company Disclosures, Public information

1111

State of the Art Operations

Record Breaking Infrastructure• Largest Greenfield pipeline project in India- backbone

for the vast pan-India national gas grid• Constructed in record time of less than 36 months• First bi-directional natural gas pipeline of the country

World Class Operations & Maint.• Remotely controlled & monitored, manned 24*7, with

two layered advance safety features• >99% pipeline availability since its commencement of

commercial operations in 2009• Internationally recognized prestigious certifications &

awards for highest standards of Health, Safety,Environment & Quality

Customer Centric Services• Providing best services to shippers ensuring

convenience and feasibility• First pipeline to offer imbalance management services

to their shippers• A pure gas transmission company – provides non-

discriminatory services to all with focus to increase thegas volumes in the country

02

03

01

3

1212

World Class Construction & Engineering3

Vendors used for Construction & Commissioning Key Features of the Pipeline

1,375 km

Trunk pipeline length

105 km

Cumulative length of interconnects

48’’Trunk pipeline diameter

20’-30’Diameter of interconnects

85 mmscmd

Design throughput

98 barg

Design Pressure

11Compressor stations

11Metering & Regulation

stations

44Maintain block valves and

tap-off stations

Engineering

Bechtel, USA • Conceptualization & optimization

Gulf Interstate Engg - USA • Basic and detailed engineering

Procurement

Baoji Steel, China

Nippon Steel, China

ILVA, Italy

• Supply of line pipes

General Electric, USA & Italy• Supply of gas compressor &

commissioning• Performance/maintenance

Telvent, Canada• Supervisory control & data

acquisition system and telecom system

Emerson, Singapore • Metering & regulating

Construction

Stroytransgas, Russia

China Petroleum Pipeline Bureau, China

Larsen & Toubro, India

Punj Lloyd, India

• Pipeline construction

Zublin, Germany• Gauthami Godavari crossing by

micro

HDI, France• Vashishta Godavari crossing by

Horizontal Directional Drilling (HDD)

Pre commissioning & Commissioning

B J Services, Canada • Drying and Pre commissioning

Enbrdge, Canada • Commissioning & startup support

Shell Global Solutions, Netherlands

• Pre startup & Safety audit

Baoji steel

1313

Pedigreed Leadership with vast experience in their respective disciplines

Gurpreet Singh, Head of Corporate Services

- Almost 2 decades of industry experience

- Was earlier the Head HR & Admin at DP World - Mundra

- Has earlier worked with ONGC, HAL and Dell

Kunjal Thackar, Chief Financial Officer

- 2 decades of experience in the finance vertical

- Was earlier the Group CFO at H-Energy (Hiranandani )

- Has also worked with HPCL, BG Group and Gujarat Gas

Narayan Chaudhari. Head – HSSE

- Over 3 decades of experience as a HSE professional

- Member of various sub committees of PNGRB, OISD, FIPI

- Previously worked at NOCIL, Reliance Communications

Sourav Gupta, Head – Risk & Compliance

- Led teams across consulting and industry roles

- Was earlier at Cairn Oil & Gas leading several risk initiatives

- Has also worked with at PWC, KPMG & Barclays

Neha Jalan, Company Secretary

- Over 8 years of experience in Compliance

- Previously at multiple entities of the Aditya Birla group

- Experience in fundraising as well as mergers & acquisitions

Emani V S Rao, Chief Commercial Officer

- Over 3 decades of Oil & Gas experience

- Worked for 20+ years at GAIL and 10+ years at RIL

- Has led teams across multiple functions

Aayushi Agarwal, Chief GM – Strategic Planning

- Over 8 years of experience in the energy sector

- Previously worked with NPCIL, NTPC, RIL

- Triple Gold Medalist from DCE and a PGDM from IIM Bangalore

Raghavanachari Suresh, Chief Operating Officer

- Associated with the Hydrocarbon industry for over 40 years

- 20+ years of experience at GAIL in various leadership roles

- Also served as the CEO of Reliance Gas Pipeline

Akhil Mehrotra, MD & CEO

- 29+ years of experience across Oil & Gas , Power & Telecom

- Was previously the Chairman of Mahanagar Gas

- Has also worked at Shell for over 15 years in various roles

4 Experienced Management Team

1414

Arpit Agrawal

Brookfield Nominee

- MD and Head of Investments at Brookfield’s Infrastructure Group

- Holds an MBA from IIM – Bangalore and a Bachelors from NIT, Allahabad

Mihir Nerurkar, Chairman

Brookfield Nominee

- MD & COO of Brookfield Infrastructure Group

- Over 18 yrs of diverse experience across various industries

Jeff Kendrew

Brookfield Nominee

- Managing Partner at Brookfield, working with the APAC team

- Previously served as CEO of Prime Infrastructure

Sanjay Barman Roy

Reliance Nominee

- Currently spearheading Reliance’s Deepwater O&G fields

- Earlier he has worked at multiple MNCs such as Schlumberger

Anish Kedia

Brookfield Nominee

- Senior Associate at Brookfield’s Infrastructure Group in India

- Has previously worked at ChrysCapital

Arun Balakrishnan

Independent Director

- Experience of over 37 years in the energy industry

- Retired as the Chairman & MD at HPCL

Chaitanya Pande


- Previously the MD at Lionshead Alternatives

- He was also at ICICI Pru AMC for over a decade

Radhika Haribhakti


- Has over 3 decades of experience in investment banking

- Is an independent director on the board of multiple listed cos.

4 Backed by a Reputed Board

The management is guided by an extremely skilled and knowledgeable Board of Directors

1515

Environment Social Governance

18,053Total trees planted

4,603Trees planted

at CS03

Large varietyMango, Guava, Water

Apple, Coconut etc.

• Focus on developing a green belt around

Compression stations (CS) and ground

water recharging

• Green CS Award instated amongst the 10

Compression Stations to foster competition

• Multiple initiatives undertaken to assist underprivileged families and villages in areas surrounding facilities

• 557 students to benefit due to construction of toilets at a school near CS07 (90% completed as on Mar 2021)

• We provide employment to more than 1,000 people in remote areas

Covid ReliefEssential items to over

2,000 families

Project SahbhagDevelopment projects

across 9 villages

Magic BusApprox. 1,000 economically

underprivileged families assisted

• PIL has institutionalized best practices for

Corporate Governance as the basis in all

business practices. Accountability and

transparency practiced across all endeavors

• Board run company as per SEBI and

Companies Act

• Ethical governance framework primarily

driven by core governance policies viz.

Code of Conduct, Anti- Bribery and

Corruption (ABC) Policy and Whistle-Blower

Policy

• Disclosure practices in line with stated goals

of accountability and transparency, has

made additional disclosures in its Annual

Report

5 Strong Focus on ESG

1616

1.1 1.0 0.8 0.2 0.0 0.0 0.4 6.3 14.02.4 2.2 1.90.7

0.4 0.7 0.6

0.5

0.515.8 16.4 15.7

14.412.4

10.6 9.4

6.3

6.9

Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22

Gas volumes (in mmscmd)KGD6 ONGC RLNG

Sharp increase seen in KGD6 Volumes as R-Cluster & Satellite fields have gone live

Witnessed a rise in realized tariffs in successive quarters

23.4

67.8 67.7 66.4 66.1 66.7 67.774.0 76.7 76.6

Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FT22*

Rs / mmBtu (Transportation + MSOP)

COVID Impact on demand

19.3 19.5 18.4 15.3 12.8 11.4 10.5 13.1 21.4Total

>>

* For July 2021

6 Ramp-up in Volumes with Rising Tariffs

1717

18.3 11.9

22.7

38.2

47.3 46.7 45.8 45.9 42.7 39.6 37.7 35.6 32.9 31.1 29.5 28.2 27.4 28.5 29.1 29.7

FY20 FY21 FY22e FY23e FY24e FY25e FY26e FY27e FY28e FY29e FY30e FY31e FY32e FY33e FY34e FY35e FY36e FY37e FY38e FY39e

Total expected gas volumes from RIL, ONGC and RLNG

In mmscmd

Source: CRISIL ResearchNote: CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this report (Report) based on the Information obtained by CRISIL from sources which it considers reliable (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. This Report is not a recommendation to invest / disinvest in any entity covered in the Report and no part of this Report should be construed as an expert advice or investment advice or any form of investment banking within the meaning of any law or regulation. CRISIL especially states that it has no liability whatsoever to the subscribers / users / transmitters / distributors of this Report. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary permission and/or registration to carry out its business activities in this regard. Rapid Holdings 2 Pte. Ltd. will be responsible for ensuring compliances and consequences of non-compliances for use of the Report or part thereof outside India. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL Ratings Limited / CRISIL Risk and Infrastructure Solutions Ltd (CRIS), which may, in their regular operations, obtain information of a confidential nature. The views expressed in this Report are that of CRISIL Research and not of CRISIL Ratings Limited / CRIS. No part of this Report may be published/reproduced in any form without CRISIL’s prior written approval.

Uptick in volumes on account of KGD6 flows

6 Estimated Gas Volumes & Financials of the Pipeline

Source: Management Estimates

24

41

56 56 55 5551

47 45 43 40 38 36 34 33 35 35 36

19

33

47 46 46 4541 40 38 35 32 30 28 26 25 26 26 26

FY22e FY23e FY24e FY25e FY26e FY27e FY28e FY29e FY30e FY31e FY32e FY33e FY34e FY35e FY36e FY37e FY38e FY39e

Projected revenues and EBITDA expected to increase in the near term, in-line with projected gas volumes

In INR Bn

1818

Consistent distributions across last 10 quarters in line with contractual profile

Total Distributions

10,56311,693

10,229

FY20 FY21 FY22e

1.0

3.8

6.7

4.4 4.4 4.4 4.4 4.3 4.33.9

Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22

Consistent Quarterly Distributions Per Unit

DPU of Rs 17.6

Distributions Per Unit

Strong visibility to meet FY22 DPU guidance of Rs 15.4 per unit

15.917.6

15.4

FY20 FY21 FY22e

In Rs

In RsIn Rs Mn

6 Consistent Track Record of Distribution

1919

• PIL has also introduced imbalance management services (IMS) to help customers manage their portfolio of gases from different source

• Other services of netting and trading and lending services would be introduced in near future

• Offer more flexible payment terms for customers

Future Reserves

• Potential upside due to yet to

find (YTF) and technical

reserves in the KG Basin

• Additional gas available will

be in high demand for

customers connected by the

pipeline

New Terminals

• Potential for increased

LNG/RLNG from upcoming

terminals on the east coast

• Increase in LNG imports can

also increase the flow through

the pipeline

CGD Network

• Potential opportunities to

connect CGD networks that

may be awarded on the east

coast

• Strategic position which is

close to several industrial hubs

provides additional

opportunities

Customer centric initiatives

• Has introduced imbalance

management services (IMS) to

help customers manage their

portfolio of gases from

different source

• Potential to introduce other

services like netting and

trading and lending services in

near future

Key Growth Drivers

2020Source: PNGRB, Public Sources

PNGRB has notified regulations for a unified tariff structure for pipelines transporting gas across the country

Key features of the ‘unified’ tariff structure

Fixed tariffs for gas transport through all operational pipelines in India notified by PNGRB

The tariffs will be determined by the board for each FY at the start of the FY

Tariffs will be grouped by 2 zones– transport of gas within 300 km and transport of gas beyond 300 km

Difference between revenue entitlement of natural gas pipeline entities and unified tariff invoiced by such entities shall be settled amongst such pipeline entities on a periodic basis

Benefits of the structure

Simplification of tariffOne gas tariff across the country, vs. earlier regime where

each pipeline had its own tariff

Customer convenienceCustomer only has to pay the pipeline delivering the gas to

them rather than each interconnected pipeline

Improved affordability across IndiaCost of gas transportation for areas far away from gas

sources expected to come down

Gas sources in East to benefitAs cost of transportation goes down, customers will focus

more on cost of gas across different sources

Government support and a stable regulatory regime is expected to be a big boost for the gas industry

Supportive Regulatory Environment

2121

Market Yields for Comparable Instruments

Yields have declined over the last 2 years (YTM)

Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21

7 yr India G-Sec Index

Source: Bloomberg as on Aug 13th , 2021, *Dividend from public sources, dividend annualized for Mindspace REIT & Brookfield REIT

Current YTMs of key bonds

6.24% 6.24%6.86%

5.85%

India 7 yr GSEC India 10 yr GSEC index RIL Bond - 2028 India Infra Bond - 2024


10 yr India G-Sec Index


RIL Bond 2028


India Infra Trust Bond 2024

9.00%

6.63%6.04%

6.79%

Indigrid Invit Mindspace REIT Embassy REIT Brookfield REIT

YTM Distribution Yield (TTM)

7.22%6.24%

8.49%

6.86%

7.28%6.24%

9.46%

5.85%

Dividend Yield for listed InvITs/REITs*

22

Thank You

2323

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