Indian Railway Finance Corporation (IRFC) has signed a ₹13,527 crore term loan agreement with L&T Metro Rail Hyderabad Limited (L&TMRHL) to refinance the debt obligations of the Hyderabad Metro Rail project.
The move is aimed at improving the project’s financial sustainability and supporting the future expansion of metro connectivity in Hyderabad.
Ownership Shift to Telangana Government
The refinancing follows the transfer of 100% ownership of L&TMRHL from Larsen & Toubro to the Government of Telangana through Hyderabad Metro Rail Limited (HMRL).
With this transition, the Hyderabad Metro network has effectively become a state-owned public mobility asset, providing a stronger institutional and financial framework for future infrastructure expansion.
Long-Term Financing to Reduce Debt Costs
Under the agreement:
- IRFC will provide long-term rupee financing over a 20-year tenure
- Repayments will be made on a quarterly basis
- The refinancing will replace higher-cost debt with competitively priced funding
The facility will refinance existing liabilities, including:
- Non-convertible debentures (NCDs)
- Commercial papers
- Existing term loans
The transaction is expected to help current lenders exit in an orderly manner while improving the long-term financial health of the metro project.
Hyderabad Metro Among Largest PPP Metro Projects
The Hyderabad Metro Rail Phase-I project:
- Covers 69.2 kilometres
- Operates across three corridors
- Includes 57 stations
It is considered one of the world’s largest metro rail projects developed under the Public-Private Partnership (PPP) model.
The network currently handles over five lakh passenger journeys daily.
Support for Metro Expansion and Urban Connectivity
The refinancing arrangement is also expected to support the Telangana government’s plans to:
- Expand metro corridors into new areas
- Improve last-mile connectivity
- Strengthen urban transportation infrastructure in Hyderabad
Special Features of the Financing Structure
According to IRFC, the financing package includes several borrower-friendly features:
- No processing fees
- No commitment charges
- No prepayment penalties
The loan is supported by a strong credit enhancement framework, including:
- An unconditional undertaking by the Government of Telangana
- A state government guarantee
- An RBI-backed direct debit mandate
IRFC Expands Beyond Railway Financing
IRFC CMD and CEO Manoj Kumar Dubey said the transaction demonstrates IRFC’s growing capability to provide innovative long-tenor financing solutions for large infrastructure projects beyond the conventional railway sector.
The company stated that the refinancing model could become a replicable framework for financing urban transit systems across India as investment in sustainable mobility infrastructure continues to rise.