India Ratings Affirms Torrent Power's Debt Instruments; Rates New NCDs at 'IND AA+/Stable'

India Ratings Affirms Torrent Power's Debt Instruments; Rates New NCDs at 'IND AA+/Stable'​

India Ratings and Research (Ind-Ra) has published rating actions on Torrent Power Limited's (TPL) debt instruments. The agency assigned the long term credit rating for proposed non-convertible debentures (NCDs) amounting to ₹4,000 Crore and re-affirmed the rating for existing non-convertible debentures amounting to ₹3,700 Crore at 'IND AA+/Stable'. Furthermore, Ind-Ra affirmed the rating on the short-term commercial paper at 'IND A1+'.

The rating actions reflect TPL's operational structure, which benefits from the regulated cost-plus model of its distribution licensee (DL) business and generation assets, allowing the company to generate a post-tax return between 14% and 16% on regulated equity. The healthy operating performance of the DL and distribution franchise (DF) areas, which contribute over 50% to the total EBITDA, was also noted.

Key Rating Details​

India Ratings provided a detailed view of TPL's debt instruments and rating actions:


The analysis noted that TPL's consolidated view considers all entities operating within the same line of business, sharing strong operational and strategic linkages and common management.

Strategic Expansion and Growth Drivers​

Ind-Ra acknowledged TPL's aggressive expansion plans, which are central to the company's long-term EBITDA growth. The company recently announced the acquisition of Nabha Power Limited, which operates a coal-based thermal power plant with a capacity of 1,400MW. This acquisition, valued at INR41.56 billion, is expected to increase TPL’s debt level by approximately INR65 billion to ₹70 billion. Nabha Power generated an EBITDA of INR7.5 billion during FY25.

TPL also has ambitious plans across various sectors:

1. Renewable Energy: The company operates a renewable portfolio of 1.95GW (0.92GW wind, 1.03GW solar) and has an under-construction pipeline of about 4.3GW. The total project cost for this pipeline is close to INR279 billion, planned to be funded through a debt-to-equity ratio of around 75:25.
2. Pumped Storage Project (PSP): TPL executed an agreement with Maharashtra State Electricity Distribution Company Limited (MSEDCL) to develop and supply a 2.0 GW/16GWh pumped storage plant. The installed capacity is slated to be 3 GW, with potential expansion to 4.2 GW.
3. Thermal Power Plant: TPL won a bid to set up a 1.6GW coal-based thermal power plant in Madhya Pradesh. The estimated capex for this plant is around INR220 billion, which will also be funded via a 75:25 debt-equity mix.

Overall, Ind-Ra estimates TPL may undertake a total capex of INR650 billion to ₹700 billion by FY31–FY32, structured through a debt-equity mix of 75:25.

Financial Health and Credit Metrics​

The agency noted that TPL's consolidated net leverage (net debt/EBITDA) decreased to 1.6x during the first half of FY26. The company’s EBITDA remained almost stable at INR43.9 billion in 9MFY26.

The financial performance highlights include:


In terms of liquidity, TPL maintained healthy cash and cash equivalents of INR19.1 billion at 1HFY26.

Ind-Ra observed that while the company has substantial capex plans, its liquidity is supported by robust cash flows from operations and the strong management experience, which helps mitigate risks associated with the large under-construction portfolio.

TORNTPOWER Stock Price Movement​

Today, Torrent Power Limited shares edged higher, settling at ₹1521.6, marking a gain of 1.05% for the day. The equity saw significant investor interest, with 413,944 shares trading throughout the session.

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