The township, previously known as Sungra or Pashke, was settled to oblige the workers of Bhaba hydroelectric plant by Himachal Pradesh State Electricity Board also known as Sanjay Jal Vidyut Pariyojana.

[2] Bhaba Nagar (or Sungra) is neighboured by villages such as Kangos, Kache, Nichar, Thanang, Ponda, Bari, Baro, Nigulsari and Taranda on the left bank of Satluj.

And on the right bank of Satluj the town is neighboured by villages namely Gharshu, Nathpa, Kachrang, Rockcharang, Kamba, Rupi, Shorang and Salaring.

Over the years, Bhaba Nagar (Sungra) has become a commercial and cultural hub for the lower part of the Kinnaur.

[3] Bhaba Nagar is also second biggest commercial centre in kinnaur after Reckong Peo Gorals and elands are seen here and there in higher ranges.