Blitz Bureau
NEW DELHI: In one of the largest thermal-sector transactions of the decade, Torrent Power is close to finalising a $1–1.2 billion acquisition of Larsen & Toubro’s thermal power engineering business, people aware of the discussions said.
The deal, including debt, is at an advanced stage, with the companies aiming to sign a formal agreement before the end of 2025, though valuations and structuring may still be refined.
Portfolio shift
L&T’s thermal unit — housed under L&T Energy – CarbonLite Solutions — comprises boiler-turbine-generator manufacturing, EPC services for coal-based plants, FGD systems and lifecycle support.
The engineering conglomerate has been working on re-shaping its energy portfolio, prioritising digital, low-carbon and hi-tech manufacturing platforms, and reducing exposure to asset-heavy legacy businesses.
Despite the intended divestment, L&T continues to remain a leading EPC contractor, recently winning a 6,400 mw mega thermal EPC order from Adani Power, underscoring its ongoing presence in large-scale power projects.
Torrent’s big expansion
For Torrent Power, the proposed buyout marks a significant step in scaling baseload capabilities. The company is already building a 1,600 mw ultra-supercritical plant in Madhya Pradesh, its single largest generation investment.
Acquiring L&T’s thermal EPC and manufacturing unit would give Torrent an in-house execution backbone at a time when India is planning 80 gw of additional coal-based capacity by 2032 to balance the grid during rapid renewable additions.
Torrent’s generation and storage pipeline is expected to touch around 9.6 gw, combining its thermal projects, renewables and pumped hydro assets.
Valuation & status
Initial talks earlier this year centred around a $1-billion price tag. Improved visibility in the thermal EPC market and strengthened asset valuations have pushed the discussions towards the $1.2-billion range.
People close to the matter note that due diligence is ongoing, other bidders could still surface, and the final closing remains conditional on regulatory and internal approvals.
L&T, with a market capitalisation of nearly ₹5.6 lakh crore, would use the monetisation to strengthen flexibility in capital deployment. Torrent Power, with a market value of ₹66,300 crore, views the acquisition as a long-term strategic bet.
Sector at inflection point
The proposed deal comes as India recalibrates its energy mix. Thermal capacity remains critical for grid stability even as renewable capacity expands aggressively. EPC firms with deep thermal expertise continue to find opportunities in retrofits, emission upgrades and new baseload projects.
If completed, the Torrent–L&T transaction would mark a major consolidation in India’s power sector and set the tone for how utilities and engineering majors position themselves in the emerging baseload-plus-renewables ecosystem.
