Torrent Power announced the execution of an agreement to acquire 100% equity stake in Nabha Power Limited (NPL), which operates a 1,400 MW Supercritical coal-based power plant in Rajpura, Punjab. The transaction implies an Enterprise Value (EV) of approximately ₹6,889 crore, valued at a 5.97x EV/EBITDA multiple based on FY25 Adjusted EBITDA. This strategic move strengthens Torrent’s thermal portfolio, offers assured returns via an availability-based tariff, and provides immediate accretion to EPS.
Transaction Details and Valuation
Torrent Power Limited has entered into a Securities Purchase Agreement dated February 16, 2026, to acquire the 1,400 MW Supercritical coal-based power plant operated by Nabha Power Limited (NPL) from L&T Power Development Company Ltd. The transaction is set to lock-box on March 31, 2025.
The implied Enterprise Value (EV) for the transaction is approximately ₹6,889 crore (net of cash). This valuation comprises ₹3,661 crore for equity and convertible instruments, repayment of promoter loan of ~₹495 crore, and net debt of ~₹2,733 crore as of March 31, 2025. This translates to an EV/EBITDA multiple of 5.97x based on FY25 Adjusted EBITDA of ₹1,153 crore. Torrent anticipates the acquisition to be EPS accretive from day 1, yielding equity returns above mid-teens.
Strategic Rationale and Portfolio Alignment
This acquisition is framed as a strategic move to strengthen and extend Torrent’s thermal portfolio without introducing execution complexity, thus accelerating growth in the thermal sector. Key strategic alignments include:
- Sustaining Growth: NPL is a high-quality asset that complements the planned MP greenfield project, sustaining growth momentum.
- Regional Presence: It enhances the footprint in North India, diversifying geographic risk.
- Brownfield Upside: Infrastructure is available to potentially add an additional 800 MW for supply to Punjab.
- Grid Stability: The coal plant provides essential, continuous power to balance intermittent renewable supply.
Operational Performance and Low Risk Profile
Nabha Power Limited demonstrates strong operational metrics and a low-risk profile:
- Operational Excellence: Plant availability has consistently been more than 90% since commissioning. Historical Plant Availability Factor (PAF) has consistently exceeded the normative 85%, and Plant Load Factor (PLF) has been higher than 80%.
- Efficiency: The plant exhibits low auxiliary consumption (around 4.5% – 4.7%) and heat rate below the CERC recommendation.
- Revenue Assurance: The entire capacity is tied up through a two-part availability-based tariff structure, ensuring stable cash flow visibility.
- Counter Party Risk: The primary off-taker, PSPCL, is “A+” rated and has a history of clearing monthly billings within 30 days.
Value Monetization Opportunity
The strategic location of the plant offers an added revenue stream through fly ash monetization. Proximity to major cement facilities, including an adjacent UltraTech facility (2.6 MTPA) and Adani capacities within 80 km radius, ensures guaranteed offtakes backed by lucrative long-term contracts.
Source: BSE
