NHPC is India’s largest hydropower generator, a government-owned utility born in 1975 to unlock the country’s Himalayan river potential. It operates across the full lifecycle - from surveying remote valleys and pouring concrete to running turbines and selling electricity - with roughly 48 years of in-house engineering experience in some of the world’s most geologically difficult terrain. Everything the company does rests on a regulated cost-of-service model: it builds a power station, the government sets a tariff that guarantees recovery of its costs plus a return, and a tripartite payment-security mechanism backed by the central government ensures it gets paid.
Business segments
A single core engine - regulated hydropower generation - supported by a growing solar-and-storage build-out, a small trading desk, and a consultancy practice that sells the expertise earned from the core.
1. Hydroelectric generation: the regulated cash-flow engine
NHPC builds and runs hydro plants in the Himalayas, then sells every unit of power to state electricity boards under long-term, government-set tariffs that guarantee cost recovery and a return on equity.
- Tariffs set by a regulator, not the market - every five years, the Central Electricity Regulatory Commission (CERC) fixes the annual fixed charges for each power station, covering return on equity, depreciation, interest on loans, and operating costs, so revenue is insulated from volatile power-exchange prices.
- Paid even when the buyer struggles - state utilities must maintain letters of credit covering 105% of their average monthly bill, and a tripartite agreement with the central government and RBI allows NHPC to deduct overdue amounts directly from a state’s central plan assistance if a utility defaults.
- Incentives for running well - on top of fixed charges, NHPC earns extra revenue when its plants exceed design energy output (secondary energy), beat availability targets, or help stabilise the grid through deviation charges; in FY26 these incentives totalled Rs. 913 crore.
- Water is the raw material - and the risk - most plants are run-of-river designs that depend on monsoon-fed flows, so generation swings with hydrology; the plant availability factor can move from 88.8% in a good year to 74.75% in a weaker one.
- A pipeline measured in decades, not quarters - the company is simultaneously building projects like the 2,880 MW Dibang scheme (due February 2032) and the 850 MW Ratle project (due November 2028), while recently commissioning the 800 MW Parbati-II station, whose completion transformed output at the downstream Parbati-III plant from 572 million units to an expected 1,669 million units annually.
2. Solar and renewable energy: the diversification under construction
NHPC is building a portfolio of solar farms - mostly under a government scheme that guarantees a buyer - while piloting green hydrogen and holding a legacy wind asset.
- Built under a central buying scheme - the company was allotted 1,000 MW of solar capacity under the CPSU Scheme, with the 300 MW Bikaner project now fully operational and selling power to Punjab’s state utility under a 25-year agreement.
- A pipeline stretching across states - projects under construction include 600 MW in Gujarat, 100 MW in Andhra Pradesh, 40 MW in Odisha, and a 50 MW floating solar plant in Kerala, with completion dates ranging from mid-2026 to early 2027.
- Earns a margin as a middleman too - acting as a Renewable Energy Implementing Agency, NHPC buys solar power from developers, sells it to state DISCOMs, and keeps a trading margin of 7 paise per unit on the way through.
- Green hydrogen in pilot mode - three small-scale projects are running: a fuel-cell microgrid in Leh, a hydrogen bus station in Kargil, and another in Chamba, testing the technology for future grid-balancing roles.
3. Pumped storage: the next grid-balancing bet
NHPC is adapting its hydro engineering skills to build pumped storage plants - giant water batteries that will store energy as India adds more intermittent solar and wind.
- 18 GW under study - the company has pumped storage projects at the preliminary or detailed report stage across seven states, including a 1,800 MW scheme at Savitri in Maharashtra and a 1,500 MW project at Satpura-2 in Madhya Pradesh.
- No operational plants yet - all pumped storage projects remain in investigation or planning phases, with the Kuppa project in Gujarat delayed by circumstances beyond the company’s control.
4. Power trading: a small licensed desk
NHPC buys and sells electricity as a Category-I interstate trader, moving modest volumes through power exchanges and bilateral deals.
- A complement, not a core business - the trading desk traded 133 million units in FY22, generating turnover of Rs. 44.84 crore, a fraction of the generation business.
- Also the vehicle for its solar middleman role - the same trading licence covers the REIA activity where NHPC aggregates solar power and passes it through to DISCOMs at a fixed margin.
5. Consultancy: selling Himalayan hydro know-how
NHPC charges fees to design, engineer, and manage hydropower projects for other developers, exporting expertise earned from its own dams.
- From Bhutan to Sikkim - assignments include work for the Mangdechhu project in Bhutan, the Loktak Downstream project in Manipur, and Lanco Teesta Hydro Power, as well as preparing a DPR for diversion of Seri Nallah away from Atal Tunnel at Rohtang.
- Services to its own family - a significant portion of consultancy revenue comes from work done for NHPC’s own subsidiaries and joint ventures, including CVPPL, JPCL, and RHPCL.
- Small but steady - consultancy brought in Rs. 54.37 crore in FY22, making it a niche practice rather than a material earnings stream.
Group structure and partners
NHPC is the government-controlled flagship, holding majority stakes in a cluster of project-specific subsidiaries and joint ventures that develop individual power stations, with the President of India owning 70.95% of the parent.
- NHDC Limited - a joint venture of NHPC and the Government of Madhya Pradesh that operates two large storage-type hydro plants in Madhya Pradesh, Indirasagar (1,000 MW) and Omkareshwar (520 MW), which together generated over 2,645 million units in FY22.
- Chenab Valley Power Projects (CVPPL) - originally a joint venture, now a subsidiary with NHPC holding 50.86%, executing three hydro projects in Jammu & Kashmir - Pakal Dul (1,000 MW), Kiru (624 MW), and Kwar (540 MW) - with Pakal Dul and Kiru both expected in late FY27.
- Ratle Hydroelectric Power Corporation (RHPCL) - a subsidiary developing the 850 MW Ratle project in J&K, with NHPC’s shareholding at 49.72% as of December 2025, a level the company says is temporary pending a matching equity contribution.
- Jal Power Corporation (JPCL) - a wholly owned subsidiary acquired through insolvency proceedings for Rs. 165 crore, now completing the 120 MW Rangit-IV project in Sikkim, and in the process of being merged into NHPC.
- Lanco Teesta Hydro Power (LTHPL) - another insolvency acquisition, bought for Rs. 897.50 crore, executing the 500 MW Teesta-VI project in Sikkim, also slated for merger into the parent.
- NHPC Renewable Energy Limited - a wholly owned subsidiary incorporated in 2022 as the dedicated vehicle for solar, wind, small hydro, and green hydrogen ventures.
- Bundelkhand Saur Urja Limited - an 88.82% subsidiary, developing a 65 MW solar project at Kalpi and planning up to 1,500 MW of solar in the state.