Torrent Power Secures ₹2,000 Crore Debt at 7.97% Coupon

Torrent Power has successfully raised ₹2,000 Crore by issuing Non-Convertible Debentures (NCDs) with a coupon rate of 7.97% per annum and maturities ranging from 8 to 10 years. The company announced the allotment of these secured, listed, and rated debentures.

The NCDs carry a fixed annual coupon rate of 7.97% and have staggered maturity dates in March 2034, March 2035, and March 2036. They were issued via private placement and are planned for listing on the Wholesale Debt Market Segment of the National Stock Exchange (NSE).

Why This Matters

This substantial debt issuance provides Torrent Power with significant capital, likely earmarked for funding its ongoing operations, capital expenditure, or expansion projects. It shows the company's access to debt markets and its ability to raise funds at competitive rates, enhancing its financial flexibility.

Company Background

Torrent Power is an integrated power utility that operates across generation, transmission, and distribution. Its portfolio includes coal, gas, and renewable energy assets.

The company recently acquired Nabha Power Ltd for an enterprise value of ₹6,889 crore, signaling a strategic focus on growth. Torrent Power has a history of accessing debt markets, having previously raised ₹7,000 Crore via NCDs in February 2026 and ₹7 billion in February 2024.

Torrent Power maintains strong credit ratings, with 'IND AA+/Stable' from India Ratings and 'CRISIL AA+/Stable' from CRISIL, reflecting its financial stability and operational performance.

What Changes Now

• Increased total debt on the company's balance sheet.
• Potential impact on financial leverage ratios, such as Net Debt to EBITDA.
• Establishes a fixed cost of borrowing at 7.97% for the duration of the NCDs.
• Enhances liquidity to support planned capital expenditure or operational needs.

Key Risks to Watch

• Credit Rating Downgrade: If Torrent Power's credit rating is downgraded by any notch, the coupon rate on these NCDs will increase by 0.25% per annum.
• Default Penalties: In case of a default in interest or principal payment for over three months, an additional interest of 2% per annum will be levied.
• Accelerated Redemption: Debenture holders can demand accelerated redemption if the company's credit rating falls to 'BBB+' or below, requiring repayment within 60 days.
• Security Charge Breach: Failure to create and perfect the required security charge within 30 days of its creation constitutes a breach of covenant.

Peer Comparison

Torrent Power's NCD issuance aligns with other sector players. Adani Power raised ₹7,500 crore in January 2026 with coupon rates from 8.00% to 8.40% for 2-5 year maturities. Tata Power allotted ₹2,000 crore in December 2025, offering 7.05% for 3-year and 7.25% for 5-year NCDs. NTPC has issued bonds with rates like 8.49% and 8.91%. Torrent Power's 7.97% rate for 8-10 year maturities appears competitive within this peer group.

Financial Snapshot

• Torrent Power's Net Debt to EBITDA was 1.41x as of FY25, indicating a healthy leverage position.
• The company reported a Return on Equity (ROE) of 18.4% for FY25.

What to Track Next

• The proposed listing of these NCDs on the NSE's Wholesale Debt Market Segment.
• Any future announcements regarding the utilization of the funds raised.
• Potential rating actions from credit agencies concerning Torrent Power.
• Monitoring the company's debt servicing capabilities and overall financial leverage.