In a significant development for India’s power sector, Torrent Power has signed an agreement to acquire a large thermal power plant in Punjab, strengthening its generation capacity and expanding its presence in the northern power market.
Industry experts view this acquisition as a strategic move that could support the company’s long-term growth by adding a stable, revenue-generating asset to its portfolio.
Details of the Acquisition
The deal involves the acquisition of a 1,400 MW thermal power plant owned by Nabha Power Limited.
The plant is located in Rajpura and plays an important role in supplying electricity within the region.
The facility consists of two generating units:
- Unit 1 – 700 MW
- Unit 2 – 700 MW
Both units have been operational for several years and are known for stable performance and efficiency.
Estimated Deal Value
The total enterprise value of the transaction is estimated at around ₹6,800–7,000 crore. This value includes both cash payment and the transfer of existing plant debt to the acquiring company.
By acquiring an operational asset, the buyer gains immediate access to electricity generation and cash flows without the delays and risks involved in building a new project.
Key Features of the Power Plant
The plant uses modern supercritical coal-based technology, which is more efficient than older generation power plants.
Major features include:
- Total installed capacity of 1,400 MW
- Long-term Power Purchase Agreement (PPA) ensuring revenue visibility
- Established infrastructure and operational setup
- High plant availability and performance stability
- Reliable power supply arrangements
This makes the asset attractive because it is already generating revenue and requires no major new construction.
Why Did the Seller Exit?
The plant was previously owned by a subsidiary of Larsen & Toubro.
The company has been gradually exiting non-core businesses to concentrate on its main engineering and infrastructure operations. Selling large power assets helps free capital and sharpen business focus.
Benefits for the Acquiring Company
The acquisition provides several strategic advantages:
Increased Generation Capacity
The addition of this plant significantly boosts the company’s overall power generation portfolio.
Entry into North India Market
The deal strengthens the company’s presence in the northern region, which has growing power demand.
Stable Revenue Stream
Long-term power supply agreements provide predictable income.
Operational Asset Advantage
Since the plant is already operational, business risk is lower compared to new projects.
Impact on Power Supply in the Region
The plant is an important electricity supplier for Punjab, and operations are expected to continue without disruption after ownership transfer.
Consumers are unlikely to see any immediate change in supply since the facility will continue operating normally.
What This Means for India’s Power Sector
The deal highlights a growing trend in India where private companies prefer acquiring operational power assets rather than building new ones, which require longer timelines and higher risks.
Such acquisitions help companies expand faster while ensuring stable returns.
Investor Perspective
Market analysts believe the acquisition could:
- Improve revenue stability for the buyer
- Strengthen future earnings potential
- Expand regional market presence
However, investors also keep an eye on debt management and fuel cost risks associated with coal-based plants.
Outcome
The acquisition appears to be strategically beneficial for both companies. The buyer gains a strong operating asset and expands geographically, while the seller sharpens focus on its core business areas.
With electricity demand expected to grow in coming years, similar consolidation and acquisitions may continue in the power sector.
Source: Torrent Power Media
