It is widely accepted that transient stability is an important aspect in designing and upgrading electric power system. This paper presents detailed power studies, load flow and transient stability analysis of an Industrial Cogeneration plant (ICP). The transient stability analysis of the ICP has been performed, by considering different operation conditions, as the faults transpire at different locations in the system. The industrial system with cogeneration is modelled using ETAP. Frequency stability analysis has performed for the worst operating scenario of the industrial system with cogeneration. Frequency excursion is determined for maximum mismatch between available generation and in-plant load. Three steps under frequency relay based load shedding has been designed to maintain the stability in the islanded industrial system.