Note on Power Grid Corporation of India Ltd.

POWERGRID ASSETS :

a) Transmission Lines : 134750 CKM (Largest in the World)

b) Substations : 217 Nos. : 280362 MVA

c) 90% of ISTS Transmission Network owned by POWERGRID

1. Fastest growing electric utility globally.

2. Domestic Credit Rating by all three top rating agencies – AAA

3. 45% of Power Generator in India Transmitted through Power Grid

4. Total orders in hand - worth Rs.139000Crores, including assignment fromoverseas

5. Against planned capital outlay of Rs.110000 Crores in XII plan over a period of 5 years, the company has already incurred capex of Rs.100000Crores till Dec.'2016. The company is much ahead of the targets. The Capexis incurred out of the internal accrualsand by raising bonds, borrowings from banks and financial institutions.

6. Against the total borrowing of aroundRs.110000 Crores as on 30.12.2016, the finance cost is around 4747 Croresfor the nine month ended Dec.'2016 which means that the borrowing cost is about 5.75%. The company is able to raise funds at low cost because of its highest rating i.e. AAA by top rating agencies. The tariff for usage oftransmission lines is fixed by CERC based on 12% return on the capital employed. The company is getting spread of more than 6% per annum.

7. The company is looking at very robust growth in view of power sector demand. The new UDAY scheme has also a far-reaching influence on the power sector by restructuring and rejuvenating the DISCOMs. There is a forecast that another 261 GW capacity of power generation is going to comeup in the near future. Accordingly, there is a continuous momentum in transmission expansion. Govt. of India is also focusing on increasing electricity access to Rural Areas. The company is prospecting 24 X 7 affordable power for all by 2019 with per capita consumption of about 4000 units by 2030 at a CAGR of 10%

8. The company has also got consultancy assignments internationally viz. Nepal, Kenya, Bhutan, Bangladesh, UAE, Uganda, Liberia, Indonesia etc.

9. Growth in key Financial areas on QoQ is robust as can be seen from below -

The net margin of 36% post depreciation and finance cost is very exciting. Over a period, depreciation and interest cost will come down and margin may further improve significantly.

A) Orders worth 14,000 Cr. In Pipeline.

B) Has declared Re 1 as Interim Dividend. Total Dividend for FY17 will be Rs 5 (based upon 5% ofNetworth Formula).

C) 20% CAGR possible considering that Government is planning 24X7 Power for all by 2019 and Renewable Interconnectivity 175GW by 2022. Creation of EnergyHighways : 11 High capacity Corridors of 4000MW each and 3 High capacity HVDC of 6000MW each.

D) Consultancy Business with margin of 80% growing rapidly.

E) Railway Electrification has opened huge opportunity for POWERGRID. PGIL already got Pilot project for 761km whereas Government is targeting 24000km electrification by 2021.

Summary : PGIL has emerged as the FASTEST GROWING POWER UTILITY IN THE WORLD. It has emerged as a Monolith, with hardly any Wothwhile Competition

Extremely Low Borrowing Cost and Lowest Establishment Cost will keep PGIL Miles ahead of Competition.

TP(Investors): Can be Rs.450-500 in 24months(barring unforeseen)

TP(Traders): Can be Rs.220 Feb Expiry, Rs. 245 March Expiry