Sensitivity Analysis

1. Revenue sensitivity: Major inputs to the revenue estimation are: i. Average ridership per day initially ii. The subsequent growth rate of the ridership iii. Occupancy rate of the space available for lease iv. Growth in the lease rentals
Average passengers per day Sensitivity NPV Project IRR Equity IRR AVE DSCR Lease Occupancy sensitivity NPV Project IRR Equity IRR AVE DSCR No. of passengers per day initially 1500000 1400000 1300000 1200000 4489.94 3936.09 3471.33 2705.60 13.03% 12.62% 12.26% 11.66% 11.83% 11.22% 10.68% 9.80% 1.31 1.27 1.23 1.18 Lease occupancy after coming into operation 100% 80% 60% 40% 4489.94 2387.61 750.62 -886.37 13.03% 11.38% 9.95% 8.37% 11.83% 9.36% 7.21% 4.89% 1.31 1.14 0.97 0.8 Ridership growth rate sensitivity 6% 5% 4% NPV 4489.94 4024.60 3668.96 Project IRR 13.03% 12.71% 12.45% Equity IRR 11.83% 11.35% 10.98% AVE DSCR 1.31 1.28 1.25 Lease rental growth rate sensitivity 6% 5% 4% NPV 4489.94 3488.00 2983.01 Project IRR 13.03% 12.29% 11.89% Equity IRR 11.83% 10.75% 10.15% AVE DSCR 1.31 1.26 1.2 3% 3333.00 12.20% 10.61% 1.22 3% 2507.97 11.50% 9.57% 1.15

As can be seen from the analysis above, the most uncertain and thus sensitive parameter among the revenue estimate inputs is the Lease Occupancy. This has a high probability of missing estimates and if it does, it impacts the revenues and thus the IRR, NPV and DSCR ratios significantly.

2. Cost sensitivity: The inputs to the cost sensitivity estimation are: i. The operating and maintenance cost estimate ii. Interest rate (SBI base rate + 225 basis points)
Cost sensitivity Escalation in annual operating & maintanence expenses 5% 10% 15% 20% NPV 4489.94 4199.67 4054.53 3909.39 Project IRR 13.03% 12.81% 12.70% 12.59% Equity IRR 11.83% 11.50% 11.34% 11.17% AVE DSCR 1.30 1.28 1.27 1.25 Average SBI base rate during the loan tenure 8.75% 9.25% 9.75% 10.25% NPV 4489.94 4063.10 3658.29 3274.31 Project IRR 13.03% 13.03% 13.03% 13.03% Equity IRR 11.83% 11.83% 11.83% 11.83% AVE DSCR 1.31 1.28 1.24 1.21

As seen from the analysis, adverse movements in both the inputs affect the project performance but the most uncertain input here is the interest rate. As it is a floating rate loan, it is exposed to interest rate risk. For instance a 1% rate hike by RBI and a subsequent hike by SBI will erode approximately 800 crore of the project NPV

Scenario Analysis
While the sensitivity analysis contained the effect of change in one input when the others are kept constant, scenario analysis is more dynamic. There are three cases taken: 1. Optimistic case 2. Base case 3. Pessimistic case Optimistic case assumption sheet Initial rider-ship per day 1700000 Ridership growth/year 7% Lease occupancy 100% SBI average base rate 8% Results NPV 6644.019 Project IRR 13.99% Equity IRR 13.25% AVE DSCR 1.50 The optimistic case is relatively comfortable in the sense that it has sufficient IRR cushion and a comfortable DSCR of 1.5 on an average

Base case assumption sheet Initial rider-ship per day Ridership growth/year Lease occupancy SBI average base rate Results NPV 2852.952 Project IRR 11.74% Equity IRR 9.89% AVE DSCR 1.28

1500000 6% 80% 8.75%

The base case just manages to be on the borderline. If any of the risk factors changes adversely, the base case would be under stress

Pessimistic case assumption sheet Initial rider-ship per day 1200000 Ridership growth/year 4% Lease occupancy 50% SBI average base rate 10.50% Results NPV -2234 Project IRR 7.61% Equity IRR 3.75% AVE DSCR 0.65

The pessimistc case suffers unfavourable numbers in all categories and is the least desirable