Torrent Power has received affirmation of its long-term credit rating at IND AA+/Stable for existing non-convertible debentures and commercial paper at IND A1+. Additionally, a rating of IND AA+/Stable has been assigned to new non-convertible debentures amounting to ₹2000 Crore. These ratings reflect the company’s regulated business model, healthy operating performance, and stable financial metrics.
Credit Rating Highlights
India Ratings and Research has affirmed Torrent Power’s credit ratings, highlighting the company’s strong financial position and operational efficiency. The key rating actions include:
- Affirmation of the long-term credit rating of existing non-convertible debentures at IND AA+/Stable.
- Affirmation of the short-term credit rating for commercial paper at IND A1+.
- Assignment of a long-term credit rating of IND AA+/Stable to new non-convertible debentures amounting to ₹2000 Crore.
Rationale for the Ratings
The ratings are underpinned by several factors:
- The regulated cost-plus model of Torrent Power’s distribution licensee and generation businesses, allowing for a post-tax return on regulated equity of 14%-16%.
- Robust operating performance in distribution licensee and distribution franchise areas, leading to healthy EBITDA generation, contributing over 50% to the total EBITDA.
- Healthy credit metrics, with net leverage declining to 1.6x during the first half of FY26, supported by increased EBITDA generation in the renewable energy segment.
Growth and Expansion
Torrent Power has a diversified under-construction book, including approximately 3.6 GW of renewable energy projects in various stages of development with a total project cost of around INR244 billion. The company also has an agreement for a 2.0 GW/16GWh pumped storage plant (PSP) with Maharashtra State Electricity Distribution Company Limited (MSEDCL). This PSP project will increase the company’s installed capacity.
Debt and Financial Outlook
As of 1HFY26, Torrent Power’s total gross debt stood at INR102.6 billion. The company’s consolidated net leverage decreased to 1.6x. Capital expenditure is expected to be funded through a debt-to-equity ratio of up to 75:25. Internal accruals are projected to be sufficient to meet equity requirements for ongoing and planned projects.
Source: BSE
