Indian Railway Finance Corporation Ltd. (IRFC) on Monday signed a massive Rs 13,527 crore term loan agreement with L&T Metro Rail (Hyderabad) Limited (L&TMRHL) to refinance the debt of the Hyderabad Metro Rail project, giving a major financial boost to one of India’s largest metro systems.
The move is expected to enhance the long-term financial health of the Hyderabad Metro project, while also supporting future expansion plans and improving urban connectivity across the city.
The refinancing comes after the Telangana government took full ownership of L&TMRHL through Hyderabad Metro Rail Limited (HMRL), converting the metro network into a state-owned public transport asset.
The agreement was signed in the presence of IRFC CMD and CEO Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao.
Refinancing to reduce debt burden
According to officials, the new financing arrangement will replace high-cost borrowings with lower-cost, long-term rupee financing spread over a 20-year repayment period with quarterly instalments.
The loan will be used to refinance existing liabilities, including non-convertible debentures (NCDs), commercial papers and earlier term loans linked to the Hyderabad Metro project.
Officials said the arrangement will also allow existing lenders to exit in an organised manner while improving the project’s financial sustainability.
IRFC said the financing package comes without processing fees, commitment charges or prepayment penalties, making the structure more flexible and cost-effective.
The refinancing facility is backed by multiple safeguards, including an unconditional undertaking by the Telangana government for servicing dues payable to IRFC, a state government guarantee and an RBI-backed direct debit mandate.
Hyderabad Metro expansion plans get support
Hyderabad Metro Rail Phase-I currently spans 69.2 kilometres across three corridors with 57 stations and handles more than five lakh passenger journeys every day.
The project is also considered one of the world’s largest metro systems developed under the public-private partnership (PPP) model.
Officials said the refinancing will strengthen Telangana government plans to expand the metro network into newer areas and improve last-mile connectivity across Hyderabad’s growing urban region.
IRFC CMD and CEO Manoj Kumar Dubey said the deal highlights IRFC’s growing role in funding large infrastructure projects beyond traditional railway financing.
He said the transaction demonstrates the corporation’s ability to provide “innovative, long-tenor financing solutions” for major infrastructure projects.
IRFC further stated that the Hyderabad Metro refinancing model could become a template for financing future urban transit projects across India as investment in sustainable public transport infrastructure continues to grow.