L&T completes Nabha Power sale to Torrent for ₹3,632 crore

Deal closure: Nabha Power changes hands

Larsen & Toubro Limited (L&T) said it has completed the divestment of Nabha Power Limited (NPL) to Torrent Power Limited for a consideration of ₹3,632.35 crore. The closing was reported as effective June 25, 2026. The transaction was executed through L&T Power Development Limited (LTPDL), a wholly owned subsidiary of L&T. As part of the closing, Nabha Power has ceased to be a subsidiary of LTPDL and, by extension, L&T.

What exactly was sold in the transaction

The sale covered 100% of the equity stake in Nabha Power Limited held by LTPDL. It also included the transfer of convertible instruments held by LTPDL in NPL. The disclosures describe the transaction as being carried out under a Securities Purchase Agreement. With this transfer, operational and ownership control of NPL shifts to Torrent Power, and L&T will no longer be involved in NPL’s operational management.

What L&T still holds in Nabha Power

Even after selling the equity and convertible instruments, LTPDL continues to hold non-convertible redeemable preference shares (NCRPS) of NPL. The retained holding is stated as 2,32,50,00,000 preference shares, which equals 2,325,000,000 shares. These are 0.1% NCRPS and are carried at a book value of ₹157.92 crore in Nabha Power’s books as on March 31, 2026. The update makes a clear distinction between the completed transfer of equity and the continuing preference share holding.

Capacity and asset details highlighted in reports

Separate deal descriptions linked the divestment to a 1,400 MW thermal power asset in Punjab, described as a supercritical coal-based plant with twin 700 MW units. The asset is referred to as the Nabha Power Plant. It was also stated that the plant has a long-term power purchase agreement (PPA) with Punjab State Power Corporation Ltd. These details matter because contracted offtake through a long-term PPA typically defines the revenue visibility profile of a power asset.

How the transaction value was described across disclosures

The completion update cites a consideration of ₹3,632.35 crore. Other deal summaries in the provided material refer to a cash consideration to L&T of ₹3,660.87 crore and an enterprise value of ₹6,889 crore. Some items also referenced that the acquisition was subject to regulatory approvals and customary closing conditions during the agreement stage. The presence of multiple figures indicates different valuation references being used in public write-ups, such as equity consideration versus enterprise value.

Strategic context: L&T’s capital recycling and portfolio focus

The divestment was described as part of L&T’s capital recycling strategy. In one report, S N Subrahmanyan, chairman and managing director of L&T, said the divestment aligns with the company’s strategy to exit development projects and focus on its core businesses. This framing is consistent with how conglomerates often rotate capital away from ownership-heavy assets into segments where they prioritise execution, services, or engineering-led operating models. The completion date also ties to earlier timelines that pointed to a closure by June 2026.

Timeline: from announcement to closing

The initial-stage agreement for the sale was reported as having been announced on February 16, 2026. Subsequent updates indicated an expected completion on or before June 30, 2026, subject to approvals and closing conditions. The final closure update states the transaction was completed on June 25, 2026. After closing, NPL stopped being a subsidiary of LTPDL and L&T, reflecting a completed ownership change rather than an in-principle agreement.

Market and stakeholder relevance

For Torrent Power, the deal adds a large, fully contracted thermal power asset as described in the material. One statement said that, upon completion, Torrent Power’s operational capacity would rise from about 5 GW to 6.4 GW, strengthening its presence in northern India. For L&T, the key implication is the exit from operational involvement in Nabha Power and the monetisation of an owned power asset. The continued holding of preference shares is a separate exposure, explicitly stated as remaining on LTPDL’s side.

Key facts table

Why this deal matters

This transaction is significant because it represents a completed exit by L&T from a large power ownership asset, not merely a signed agreement. The disclosures also show how deal reporting can cite different numbers depending on whether the reference point is equity consideration or enterprise valuation. For investors tracking L&T’s portfolio moves, the stated alignment with exiting development projects provides a clearer lens on the company’s strategic direction. For Torrent Power, the acquisition is positioned as capacity addition with a contracted offtake profile, based on the cited long-term PPA.

Conclusion

L&T’s sale of Nabha Power to Torrent Power closed on June 25, 2026, with the company reporting a consideration of ₹3,632.35 crore for the equity and convertible instruments. LTPDL continues to hold NCRPS in NPL with a stated book value of ₹157.92 crore as of March 31, 2026. The completion confirms NPL is no longer a subsidiary of L&T’s power development arm. Any further clarity on valuation references will typically come from detailed filings and the final transaction accounting reflected in subsequent financial statements.