L&T to Sell Nabha Power to Torrent Power in Strategic Divestment Move

Larsen & Toubro’s wholly owned arm, L&T Power Development (LTPDL), has agreed to divest its entire stake, including convertible instruments, in Nabha Power to Torrent Power, subject to regulatory approvals.

Nabha Power, currently a fully owned subsidiary of LTPDL, operates under a long-term power purchase agreement and has demonstrated stable operating performance. The proposed transaction is positioned as a value-accretive monetisation exercise and aligns with L&T’s broader strategy to exit the development projects business and sharpen focus on core engineering and infrastructure segments.

Commenting on the divestment, S N Subrahmanyan said the move is aimed at unlocking value and strengthening L&T’s core businesses, while creating long-term value for stakeholders, including partners, shareholders and employees.

Samir Mehta said the acquisition will mark Torrent Power’s entry into the high-growth northern India power market. He added that Nabha Power will provide a well-established operating asset with contracted cash flows and a strong track record, contributing to revenue and profitability from the outset.

The deal is expected to expand Torrent Power’s operational scale, improve efficiency and enhance cash-flow stability, while also diversifying its portfolio without adding development or execution risks.

Nabha Power is a wholly-owned subsidiary of L&T Power Development Ltd. NPL owns and operates a 1,400 MW (2 X 700 MW) supercritical coal-fired thermal power plant at Rajpura in Patiala district, Punjab.

Commissioned in 2014, the power plant was set up under Case II Competitive Bidding Guidelines of Government of India. It operates under a 25-year Power Purchase Agreement.

Further, the plant has long-term Fuel Supply Agreement (FSA) with SECL and NCL for 2.775 million MT and 2.464 million MT, respectively, along with mechanisms for alternate coal procurement to address any supply shortfall. The plant’s equipment is designed to blend domestic and imported coal, providing operational and fuel flexibility.

The power plant has built a strong operational and sustainability track record, underscored by a highest-ever Plant Availability Factor (PAF) of 95.36% in FY25 and a PLF of 94.33% in July 2024, ranking 2nd among all thermal power plants (>500 MW) in India.