Torrent Power Buys Nabha Power for ₹6,889 Cr, Boosts Capacity to 6.4 GW

Introduction

Torrent Power Ltd announced on February 16, 2026, that it has entered a definitive agreement to acquire Nabha Power Ltd (NPL) from L&T Power Development Ltd, a subsidiary of Larsen & Toubro (L&T). The transaction is valued at an enterprise value of ₹6,889 crore and marks a significant expansion for Torrent Power, increasing its operational generation capacity from approximately 5 GW to 6.4 GW.

This strategic acquisition provides Torrent Power with a foothold in the high-growth power market of northern India and adds a high-performing thermal asset to its portfolio. The deal is expected to be value-accretive from the outset, enhancing the company's revenue and profitability.

Details of the Acquisition

The agreement involves Torrent Power acquiring a 100% equity stake and convertible instruments in Nabha Power Ltd. NPL operates a 1,400-megawatt (2x700 MW) supercritical coal-fired thermal power plant located in Rajpura, Punjab. The transaction is currently subject to standard regulatory approvals and customary closing conditions.

Nabha Power is a fully contracted asset with a stable revenue stream. For the fiscal year 2025, it reported revenues of ₹4,866 crore and an adjusted EBITDA of ₹1,153 crore. The plant is known for its operational excellence, built with advanced Japanese technology, and maintains a sustained availability level above 90%.

Strategic Rationale for Torrent Power

This acquisition is a key component of Torrent Power's strategy to scale its thermal portfolio in response to India's rising electricity demand. By purchasing an established and operational asset, the company avoids the development and execution risks associated with greenfield projects.

Samir Mehta, Chairman of Torrent Power, stated, "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." He further emphasized that the deal would deliver a "meaningful uplift in the overall revenues and profitability" and strengthen the company's cash-flow stability.

The addition of NPL's technical expertise and operational capabilities is also expected to create valuable synergies, supporting Torrent's future growth strategies, including potential capacity expansion at the existing site.

L&T's Strategic Divestment

For Larsen & Toubro, the sale of Nabha Power aligns with its long-term strategy of divesting from non-core businesses to unlock value and strengthen its primary operations. L&T aims to concentrate its resources on its core engineering, procurement, and construction (EPC), hi-tech manufacturing, and services businesses.

S N Subrahmanyan, Chairman & Managing Director of L&T, commented, "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."

This transaction allows L&T to reallocate capital towards its high-growth sectors while monetizing a well-performing but non-core asset.

Market Impact and Industry Context

The acquisition positions Torrent Power as a more formidable player in India's competitive power sector. The immediate 1.4 GW capacity addition helps it compete with major private and public sector utilities that are also expanding to meet national energy needs. The deal reflects a broader trend of consolidation within the industry, where established operators are acquiring operational assets to achieve scale quickly.

NPL's 25-year Power Purchase Agreement (PPA) with the Punjab state power corporation provides long-term revenue visibility, a crucial factor for investors. The plant also has long-term fuel supply agreements with subsidiaries of Coal India, ensuring a stable supply of raw materials. This stability, combined with high operational efficiency, makes NPL a valuable asset in a sector often subject to fuel price and supply volatility.

Conclusion

Torrent Power's acquisition of Nabha Power is a strategically sound move that delivers immediate capacity growth, market diversification, and financial benefits. It strengthens the company's position in the Indian power market without incurring the risks of new project development. For L&T, the divestment is a logical step in its strategy to focus on core competencies and optimize its capital structure. As the transaction moves towards regulatory approval, it stands as a significant development in the ongoing evolution of India's energy landscape.