Torrent Power Limited has received a strong endorsement of its financial stability, as India Ratings and Research (Ind-Ra) assigned and reaffirmed high-grade ratings for its debt instruments on April 16, 2026. The agency gave an “IND AA+/Stable” rating to proposed non-convertible debentures worth ₹4,000 crore and maintained the same rating for existing NCDs of ₹3,700 crore. It also affirmed the company’s short-term commercial paper at “IND A1+”. These ratings indicate a stable outlook and reflect the company’s strong position in India’s integrated power utility sector.
The company’s regulated business model continues to play a key role in maintaining its financial strength. Torrent Power operates electricity distribution networks in major regions such as Ahmedabad, Surat, and the Union Territory of Dadra and Nagar Haveli and Daman and Diu. Its cost-plus framework allows it to earn a steady post-tax return on equity in the range of 14% to 16%. The distribution segment contributes more than half of the company’s total EBITDA, supported by efficient operations and lower-than-expected technical and commercial losses.
At the same time, the company is moving ahead with an ambitious expansion plan. It recently announced the acquisition of Nabha Power Limited, which runs a 1,400 MW coal-based power plant. This move is expected to increase Torrent Power’s overall debt by around ₹65 billion to ₹70 billion. However, the company’s financial position remains comfortable, with net leverage at about 1.6 times in the first half of FY2026, giving it room to manage additional borrowings.
Torrent Power is also focusing on renewable energy and long-term storage solutions. It currently has around 4.3 GW of renewable capacity under construction, which is expected to be commissioned over the next two to three years. In addition, it is developing a 3 GW pumped storage hydro project in Maharashtra and has secured a bid for a 1.6 GW coal-based plant in Madhya Pradesh. The total planned capital expenditure for these projects is estimated at ₹650 billion to ₹700 billion by FY2032.
Despite the positive outlook, some challenges remain. High gas prices and the absence of long-term power purchase agreements for certain gas-based plants have resulted in low utilization levels. There are also concerns that geopolitical tensions in the Middle East could affect gas supply and impact merchant power revenues.
Even so, the company’s liquidity position remains adequate, with cash and equivalents of ₹19.1 billion as of the first half of FY2026. Overall, steady cash flows from its regulated operations and upcoming renewable projects are expected to support its financial stability in the coming years.
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