Torrent Power

Primarily a power distribution company Torrent Power (TPL) is promoted by the Torrent Group. Historically, it has followed a model of taking over ailing state electricity distribution companies, turning them around to make profits. Its efficiency can be gauged from the fact that it has the lowest transmission & distribution (T&D) losses (approx. 10%) in India.

Currently, it has got distribution licenses for Ahmedabad, Gandhinagar and Surat and will be distributing power to Kanpur and Agra areas for the next 20 years, courtesy a recently-signed MoU with the Uttar Pradesh Power Corporation (UPPCL). If it can maintain its earlier performances, the benefits are visible immediately —  T&D losses of the Kanpur Electricity Supply Company (Kesco) are 42 per cent.

To eliminate the deficit in gas being faced by a number of its power generation units, TPL has signed a contract with RIL for supply of gas at $4.2 per mmBtu for a five-year period. TPL’s two-pronged approach of buying into existing distributors and building its own power generation capabilities puts it at the forefront of the power sector.

That it has acquired momentum over the years is evident from the company almost doubling its profit in the last fiscal to around Rs 408 crore. Though its interest expenses also increased over the year, by over 24 per cent, it has got adequate interest coverage ratio (3.65) to meet obligations.

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This article was originally published on July 30, 2009.