In a significant development in India’s thermal power segment, Torrent Power Limited has agreed to acquire 100 per cent of the equity stake and convertible instruments in Nabha Power Limited (NPL) from L&T Power Development Limited, a wholly owned subsidiary of Larsen & Toubro (L&T). The deal marks the expansion of Torrent Power’s thermal generation footprint, adding a fully contracted asset with a long operating history. For Torrent Power, the transaction is part of a measured growth strategy aimed at expanding scale, diversifying geography and adding stable cash-generating assets through brownfield expansion.
Background
NPL is a wholly owned subsidiary of L&T Power Development Limited and owns and operates the 1,400 MW Rajpura thermal power plant, comprising two 700 MW supercritical units, in Patiala district, Punjab. The project, commissioned in 2014, was set up under the Government of India’s Case II competitive bidding guidelines and operates under a 25-year power purchase agreement. Over the years, it has emerged as a large and technically robust baseload asset in the region. The plant is built on advanced Japanese technology and has been designed to deliver efficient and reliable supercritical coal-based generation. It has long-term fuel supply agreements with South Eastern Coalfields Limited (SECL) and Northern Coalfields Limited (NCL) for 2.775 million metric tonnes (mmt) and 2.464 mmt respectively.
The Rajpura plant’s performance record has helped position it as a strong operating asset. High availability, steady plant load factors and consistent execution standards have enabled the company to build a track record of technical and operational excellence.
Thermal power, while facing long-term transition pressures, continues to play a central role in ensuring grid stability, meeting peak demand and balancing the intermittency of renewable energy. In states with high and growing electricity requirements, coal-based generation remains essential for round-the-clock supply. Against this backdrop, an efficient, fully tied-up supercritical asset in a power-deficit region holds strong strategic relevance.
Deal insights
Torrent Power signed a securities purchase agreement on February 16, 2026 to acquire Nabha Power’s 1,400 MW supercritical coal-fired power plant from L&T Power Development Limited. The transaction has been structured on a lock-box date of March 31, 2025. The total enterprise value of approximately Rs 68.89 billion is net of cash and comprises around Rs 36.61 billion for equity and convertible instruments, repayment of a promoter loan of about Rs 4.95 billion and net debt of about Rs 27.33 billion as of March 31, 2025. The valuation implies a trailing enterprise value to earnings before interest, taxes, depreciation and amortisation (EBITDA) ratio of 5.97x, based on an adjusted EBITDA of Rs 11.53 billion in 2024-2025. Torrent Power has indicated that the acquisition will be earnings-per-share accretive from day one, with equity returns expected to remain above the mid-teens along with additional upside potential. L&T was advised on this transaction by Saraf and Partners.
Nabha Power is a fully contracted thermal power asset operating under a two-part availability-based tariff structure, which provides stability and a high degree of visibility over cash flows. The company reported revenue of Rs 48.66 billion and adjusted EBITDA of Rs 11.53 billion in 2024-2025.
Upon completion of the acquisition, Torrent Power’s operational generation capacity will increase from around 5 GW to 6.4 GW.
