Infrastructure major Larsen & Toubro (L&T) has announced the sale of its 100% stake in Nabha Power Ltd (NPL) to Torrent Power for ₹3,660 crore. The transaction, executed through L&T’s wholly owned subsidiary L&T Power Development, marks a significant step in the group’s ongoing strategy to monetise non-core assets and exit the development projects business.
Strategic Value Unlock for L&T
According to the company, the divestment is a value-driven monetisation exercise aimed at strengthening its core engineering and construction businesses. NPL, which owns and operates the 1,400 megawatt Nabha thermal power plant in Punjab, reported a turnover of ₹4,421 crore and a net worth of ₹3,553 crore in FY25.
L&T Chairman S N Subrahmanyan stated that the transaction aligns with the company’s broader objective of unlocking value and enhancing long-term stakeholder returns. The move enables L&T to redeploy capital into high-growth and asset-light segments within its core portfolio.
Nabha Power Plant: Operational Strength
The Nabha power plant, located in Rajpura in Punjab’s Patiala district, comprises two supercritical units of 700 MW each. Commissioned in 2014 under the government’s Case-II competitive bidding framework, the plant operates under a 25-year power purchase agreement.
The facility has demonstrated strong operational performance. In FY25, it achieved a plant availability factor (PAF) of 95.36%, while its plant load factor (PLF) stood at 94.33% in July 2024. The plant holds long-term fuel supply agreements with South Eastern Coalfields Ltd (SECL) and Northern Coalfields Ltd (NCL), along with provisions for alternative coal sourcing. Its design allows blending of domestic and imported coal to ensure fuel flexibility.
Torrent Power Expands Northern India Footprint
For Torrent Power, the acquisition marks a strategic entry into the northern India power market. Upon completion, the company’s total operational capacity will increase from approximately 5 gigawatt to 6.4 gigawatt.
Torrent Chairman Samir Mehta said the addition strengthens the company’s generation portfolio and provides a scalable platform to enhance operational efficiency and cash-flow stability. The acquisition aligns with Torrent’s strategy of expanding through operational, revenue-generating assets.
Rising Investor Interest in Thermal Assets
Advisory firm EY acted as the exclusive M&A investment banking adviser to L&T for the transaction. Industry experts note renewed investor interest in coal-based power assets, driven by the government’s emphasis on thermal power to ensure grid stability amid rapid renewable energy expansion.
The deal underscores a broader trend of consolidation and strategic repositioning within India’s power generation sector, as companies rebalance portfolios in response to evolving energy demand and policy priorities.
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