Torrent Power Buys Nabha Plant for ₹6,889 Cr, Enters North India

Torrent Power Enters North India with Major Acquisition

Torrent Power announced on February 16, 2026, that it has signed a definitive agreement to acquire Nabha Power Limited (NPL) from L&T Power Development Ltd., a subsidiary of Larsen & Toubro. The transaction, valued at an enterprise value of ₹6,889 crore, marks a significant strategic move for Torrent Power, expanding its generation capacity and establishing its presence in the northern Indian power market.

This acquisition will increase Torrent Power's total operational capacity from approximately 5 GW to 6.4 GW. The deal involves Torrent acquiring a 100% equity stake and convertible instruments in NPL. It is expected to be value-accretive from the first day, enhancing the company's revenue and profitability without the associated risks of developing a new project from the ground up.

Details of the Transaction

The deal is structured with an upfront cash payment of ₹3,661 crore, and Torrent Power will also take on Nabha Power's existing debt of ₹3,228 crore. The completion of this acquisition is subject to customary closing conditions and necessary regulatory approvals. For Larsen & Toubro, this sale is part of a broader strategy to divest from non-core assets, allowing the company to unlock value and concentrate resources on its primary engineering, procurement, and construction businesses.

S N Subrahmanyam, Chairman & Managing Director of L&T, commented that the divestment aligns with the company's strategic goals. He stated, "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."

A High-Performing Asset

Nabha Power Limited operates a 1,400 MW (2x700 MW) supercritical coal-fired thermal power plant in Rajpura, Punjab. Commissioned in 2014, the plant is recognized as one of the most efficient thermal power stations in India. It was built with advanced Japanese technology and has a strong operational track record.

For the fiscal year 2025, NPL reported revenues of ₹4,866 crore and an adjusted EBITDA of ₹1,153 crore. The plant achieved a plant availability factor of 95.4%, the second-highest among large thermal plants in the country. This high level of efficiency ensures a reliable power supply and stable cash flows. The plant operates under a 25-year Power Purchase Agreement (PPA) with Punjab's state power corporation, ensuring all its electricity is supplied to the state.

Strategic Importance for Torrent Power

The acquisition is a key element of Torrent Power's growth strategy. It provides an immediate entry into the high-growth power market of northern India, a region where the company previously had no presence. By acquiring a fully operational and contracted asset, Torrent avoids the lengthy timelines and potential risks associated with greenfield projects.

Samir Mehta, Chairman of Torrent Power, highlighted the strategic benefits, stating, "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."

Market Context and Future Outlook

This deal occurs as power producers across India are increasing their coal-based capacity to meet the country's rising electricity demand. The acquisition of a modern, efficient thermal plant like Nabha Power positions Torrent to capitalize on this trend. The plant's strategic location in a power-deficit region also offers potential for additional earnings through ancillary services.

The addition of 1.4 GW of capacity strengthens Torrent Power's position among major private sector utilities in India. The integration of NPL's technical expertise and operational capabilities is also expected to create synergies that will support Torrent's future growth plans, including potential capacity expansion at the existing site.

Conclusion

Torrent Power's acquisition of Nabha Power is a decisive move that provides immediate growth in capacity, geographical diversification, and stable revenue streams. For L&T, the sale successfully unlocks capital from a non-core asset. As the transaction proceeds toward regulatory clearance, it stands as a significant development in the consolidation and evolution of India's energy sector, underscoring the continued importance of efficient thermal power in the country's energy mix.