Torrent Power Limited has successfully secured a credit rating assignment of CRISIL AA+/Stable for its proposed ₹4,000 crore non-convertible debentures. Simultaneously, CRISIL Ratings has reaffirmed the existing long-term rating of CRISIL AA+/Stable for current debt instruments and CRISIL A1+ for short-term facilities. This positive rating action reflects the company’s strong operational profile, robust cash flow from regulated businesses, and stable financial risk management despite an ambitious capital expenditure program.
Rating Rationale and Financial Outlook
CRISIL Ratings has assigned a CRISIL AA+/Stable rating to Torrent Power’s proposed ₹4,000 crore non-convertible debentures. Additionally, the agency reaffirmed its CRISIL AA+/Stable rating on existing non-convertible debentures totaling ₹4,735 crore, alongside a CRISIL A1+ rating for the company’s commercial paper and short-term bank loan facilities. These ratings highlight the company’s resilience and stable profitability in the power sector.
Strategic Acquisition of Nabha Power
A key driver for future growth is the acquisition of Nabha Power Ltd (NPL), which operates a 1,400 MW thermal power plant in Punjab. Following approval from the Competition Commission of India on April 7, 2026, this acquisition will expand Torrent Power’s operational capacity from 5 GW to approximately 6.4 GW. The move marks the company’s strategic entry into the northern Indian power market, supported by a fully contracted long-tenor power purchase agreement.
Capital Expenditure and Leverage Management
Torrent Power is embarking on a significant capital expenditure plan of ~₹65,000 crore over the 2026-2032 period. This investment targets renewable energy projects, pumped storage hydro capacity (3 GW), and a new 1.6 GW greenfield thermal project. While this scale of investment is expected to increase net leverage in the medium term, the company’s management has maintained a commitment to keep financial structures within established rating thresholds through prudent capital allocation and strong internal accruals.
Operational Performance and Stability
The company continues to exhibit strong operational efficiency, with transmission and distribution (T&D) losses remaining among the lowest in India. Performance for fiscal 2025 showed a robust improvement, with net debt to EBITDA ratio declining to 1.4 times as of March 31, 2025, down from 2.2 times in the previous year. This improvement was driven by strong power demand, high merchant sales, and successful fundraising through a qualified institutional placement.
Source: BSE
