Torrent Power to buy Nabha Power for enterprise value of Rs 6,889 crore

Torrent Power to buy Nabha Power for enterprise value of Rs 6,889 crore

• Torrent Power to buy Nabha Power for Rs 6,889 crore
• Acquisition boosts Torrent's capacity from 5 GW to 6.4 GW
• Deal marks Torrent's entry into northern India's power market

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Torrent Power Ltd on February 16 said it has entered into a definitive agreement with L&T Power Development Ltd (L&TPDL) to acquire 100% of equity stake and convertible instruments in Nabha Power Ltd (NPL) for an enterprise value of Rs 6,889 crore.

NPL is a wholly owned subsidiary of LTPDL, and the transaction is subject to requisite regulatory approvals and customary closing conditions. LTPDL is a wholly-owned subsidiary of Larsen & Toubro (L&T).

NPL is a fully contracted thermal power asset with revenue of Rs 4,866 crore and adjusted EBITDA of Rs 1,153 crore in FY25. The supercritical plant, built on advanced Japanese technology, maintains sustained availability levels above 90%. "Strategically located in a power-deficit region, the plant also supports potential ancillary revenue streams. Furthermore, existing infrastructure allows for seamless expansion of capacity, supporting future growth opportunities," said Torrent Power.

Nabha operates a 1,400‑megawatt coal-fired plant in Punjab and supplies all its electricity to the state power corporation under a 25‑year contract.

"Upon completion of the acquisition, Torrent’s operational capacity will increase from 5 GW to 6.4 GW. In addition, Torrent will gain NPL’s institutional expertise and decade-long technical capabilities, developed through exceptional implementation and operational excellence. This acquisition creates valuable synergies that will strengthen Torrent’s greenfield thermal power development strategy," said the company in a stock exchange filing.

Speaking on the development, Samir Mehta, Chairman, said: “The acquisition marks Torrent’s entry into the high-growth power market of northern India. Upon completion, NPL will add a high-quality, best-in-class and well-established operating asset to our portfolio supported by fully contracted cash flows and a strong operational track record. The acquisition will be value accretive from day one, delivering a meaningful uplift in the overall revenues and profitability. Leveraging our proven expertise in managing power assets, this addition provides a robust platform to enhance scale, improve operational efficiency, and strengthen cash-flow stability. Importantly, the transaction expands our footprint without introducing development or execution risk and further enhances portfolio diversification while remaining firmly aligned with our disciplined approach to growth, prudent capital allocation, and balance-sheet resilience.”

The deal adds to Torrent's recent push to scale up its thermal portfolio as power producers move to coal-based power capacity to meet rising electricity demand in India.

Last year, Torrent announced a $2.5-billion coal power project in central India and was evaluating plans to build 5–7 GW of capacity over the next decade.

Commenting on this, S N Subrahmanyan, Chairman & Managing Director, L&T said: “The divestment of NPL aligns with L&T’s strategic objective of unlocking value to strengthen our robust core businesses. This move positions us to create long term value for all our stakeholders — business partners, shareholders and employees.”

EY was the exclusive M&A advisor to L&T on this transaction.