Indian Railway Finance Corporation (IRFC) has signed a Rs 13,527 crore term loan agreement with L&T Metro Rail Hyderabad Limited to refinance the debt obligations of the Hyderabad Metro Rail project, marking one of the largest refinancing transactions in India’s urban transit sector.
The agreement was signed in the presence of Manoj Kumar Dubey and K. Ramakrishna Rao, highlighting the strategic importance of the project for urban infrastructure development.
According to IRFC, the refinancing aligns with its strategy of expanding beyond conventional railway financing into broader transportation and infrastructure funding, in line with the Government of India’s Viksit Bharat vision.
The refinancing comes after the transfer of complete ownership of L&T Metro Rail (Hyderabad) Limited from Larsen & Toubro Limited to the Government of Telangana through Hyderabad Metro Rail Limited (HMRL). The move has strengthened the financial structure of the metro project and paved the way for future network expansion.
The loan facility will refinance existing liabilities, including non-convertible debentures (NCDs), commercial papers, and term loans, allowing current lenders to exit while improving the project’s long-term financial sustainability.
Hyderabad Metro Rail Phase-I spans 69.2 kilometres across three corridors with 57 stations and is among the world’s largest metro rail projects developed under the public-private partnership (PPP) model. The metro network currently handles over 5 lakh passenger journeys daily and serves as a major public transport backbone for the city.
The refinancing has been structured with a 20-year tenure and quarterly repayment schedule. IRFC stated that the facility does not include processing fees, commitment charges, or prepayment penalties, making it a cost-effective long-term financing solution.
The transaction is backed by multiple credit safeguards, including an unconditional undertaking from the Government of Telangana, a state government guarantee, and an RBI-supported direct debit mechanism.
Commenting on the development, Manoj Kumar Dubey said the transaction demonstrates the ability to finance large-scale urban infrastructure projects domestically through long-term funding structures aligned with project cash flows. He added that IRFC aims to play a larger role in financing sustainable urban mobility and public infrastructure projects across India.
The refinancing is expected to improve the financial flexibility of the Hyderabad Metro project and support the planned expansion of the city’s metro network into emerging growth corridors.