India Ratings Assigns 'IND AA+' to Torrent Power's ₹4000 Crore NCDs
India Ratings assigned 'IND AA+/Stable' to Torrent Power's proposed ₹4000 Crore NCDs and reaffirmed 'IND AA+/Stable' on ₹3700 Crore NCDs. Short-term CP rating affirmed at 'IND A1+'. Ratings consider regulated business model, strong EBITDA, and healthy credit metrics, despite leverage increase due to Nabha Power acquisition and large capex.
Credit rating actions are important for a company as they influence borrowing costs and investor confidence. This action is significant for the company's debt financing.
The credit rating agency has assigned a stable outlook to Torrent Power's debt instruments, indicating a positive assessment of the company's financial health and future prospects.
India Ratings and Research has assigned a long-term credit rating of 'IND AA+/Stable' to Torrent Power Limited's proposed non-convertible debentures amounting to ₹4000 Crore. The agency has also reaffirmed its rating on existing non-convertible debentures worth ₹3700 Crore at 'IND AA+/Stable'. Furthermore, the short-term commercial paper rating has been affirmed at 'IND A1+'.
The ratings reflect Torrent Power's regulated cost-plus model for its distribution and generation businesses, healthy EBITDA generation from its distribution segment (over 50% of total EBITDA), and strong credit metrics with net leverage declining to 1.6x in 1HFY26. The agency also noted the acquisition of Nabha Power Limited, which will increase the company's debt by ₹65-70 billion, and the significant under-construction renewable energy portfolio of approximately 4.3 GW with a project cost of around ₹279 billion.
Torrent Power's operational performance in its distribution licensee (DL) and distribution franchise (DF) areas remains robust, with low aggregate technical and commercial (AT&C) losses in its DL areas. The company's future EBITDA is expected to be driven by the commissioning of its renewable capacity and increased capitalization in the DL business. The Fuel and Power Purchase Price Adjustment (FPPPA) mechanism aids in the slower build-up of regulatory gaps. Despite a large capex plan, risks are mitigated by the management's experience and the company's strong balance sheet flexibility.
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Torrent Power Limited filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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See the model portfoliosA plain-language summary of a public exchange filing by Torrent Power Limited. Read the original for the full detail.