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Noida Toll Bridge Company Ltd

| Transcript of Conference Call (January 17, 2025)

BEARISH SENTIMENT

Report Source

⬤17th Jan 25

Summary : Noida Toll Bridge faces severe financial challenges after Supreme Court upheld toll suspension, now pursuing review petition and arbitration for compensation and land development rights amidst shareholder skepticism.

Management Perspective neutral : We are all quite disappointed by this judgment. We have to look forward and now what are going to be the company's assets that we need to protect. We are contemplating filing a Review Petition. Whatever available resources are there, we are exploiting it to the best interest of shareholders. That is the strategy.

Concall Report Analysis & Insights

Business Overview

  1. Noida Toll Bridge Company Limited (NTBCL) operates the DND Flyway.
  2. The Supreme Court upheld the Allahabad High Court's judgment, suspending user fee collection from October 26, 2016.
  3. The company is preparing to file a review petition against the Supreme Court's judgment.
  4. NTBCL is pursuing arbitration for compensation and development rights for its land parcels.
  5. The company's assets include intangible infrastructure and certain unexploited land parcels.

Future Growth Prospects

  1. Company aims to exploit available advertisement resources to augment revenue.
  2. Seeking development rights for 30-36 acres of land parcels, co-terminus with the concession.
  3. Review petition and arbitration proceedings are key to restoring revenue or securing compensation.
  4. Management is updating its business plan to reflect changes in revenue potential.

Management Insights

  1. Management is disappointed by the Supreme Court judgment but is looking forward.
  2. A review petition is being prepared and will be filed by January 19, 2025.
  3. The company's land is in possession and charged to a secure lender, co-terminus with the concession.
  4. Advertisement revenue has increased by nearly 100% by exploiting available resources.
  5. The company will update shareholders on actions taken at relevant forums.

Signs of Skepticism

  1. Shareholders question the effectiveness and likelihood of success for the review petition.
  2. Concerns raised about delays in filing the review petition and pursuing arbitration.
  3. Shareholders doubt the company's ability to secure development rights given Noida Authority's approach.
  4. Questions about the transparency and public availability of the CAG report.
  5. Skepticism regarding the government's concern for its own equity in the company.

Risk Factors

  1. Supreme Court upheld toll suspension, significantly impacting revenue generation.
  2. Review petitions in the Supreme Court are rarely successful, making the outcome uncertain.
  3. Arbitration proceedings are lengthy, potentially taking a year and a half to settle.
  4. Noida Authority has not granted development rights for company land parcels.
  5. Negative observations in the Supreme Court judgment could impact arbitration position.

Good To Know

  1. The DND Flyway user fee collection was suspended from October 26, 2016.
  2. The Supreme Court dismissed NTBCL's Special Leave Petition on December 20, 2024.
  3. The company has 30-36 acres of land for which development rights were sought but not granted.
  4. The concession agreement included provisions for compensation in case of change in law.
  5. The company was formed as an SPV by NOIDA and ILFS, with NOIDA officials on its board initially.

Key Drivers

  1. Review petition outcome is favorable.
  2. Arbitration awards significant compensation.
  3. Development rights for land granted.
  4. Advertisement revenue significantly increases.

Key Analyst Discussions

Financial Highlights

  1. Shareholders inquired about the exact CAG shortfall amount, citing 4,037 crores.
  2. Management clarified the shortfall is closer to 1,900 crores, with other scenarios around 15 crores.
  3. Questions arose about the company's ability to pay dividends given current meager advertisement revenue.
  4. Discussion on the income tax arbitration tribunal's finding of 3,000 crores due to the company.

Strategic Considerations

  1. Shareholders asked about the company's strategy post-judgment to protect assets.
  2. Queries on the process to secure development rights for the land parcels.
  3. Questions regarding the timeline and strategy for arbitration proceedings.
  4. Suggestions to engage media and government officials to highlight the company's plight.
  5. Inquiries about the objective of the review petition: restoring toll or moving to arbitration.
Noida Toll Bridge Company Ltd (NOIDATOLL) Concall Report Analysis & Insights | Dhanarthi