Hyderabad Metro Project Secures ₹13,527 Crore Refinancing Agreement with IRFC

Indian Railway Finance Corporation Secures ₹13,527 Crore Term Loan for Hyderabad Metro Refinancing

In a significant development, the Indian Railway Finance Corporation (IRFC) has signed a ₹13,527 crore term loan agreement with L&T Metro Rail Hyderabad (L&TMRHL) to refinance the debt obligations of the Hyderabad Metro Rail project. The refinancing comes after the Government of Telangana took full control of L&T Metro Rail Hyderabad from Larsen & Toubro, transforming the metro system into a key public transport asset owned by the state.

The refinancing facility, structured over a 20-year tenure with quarterly repayments, replaces higher-cost debt with competitively priced long-term rupee financing. The facility carries no processing fees, commitment charges, or prepayment penalties, making it an efficient and borrower-friendly refinancing mechanism. The refinancing will refinance existing debt obligations, including non-convertible debentures (NCDs), commercial papers, and term loans, enabling an orderly exit for existing lenders while significantly improving the project's long-term financial sustainability.

The Hyderabad Metro Rail project, spanning 69.2 kilometres across three corridors with 57 stations, is among the world's largest metro rail projects developed under the public-private partnership (PPP) model. The project serves as a critical urban transport backbone for Hyderabad, with the existing network currently catering to over 5 lakh passenger journeys daily. The financing support marks a significant step in strengthening Hyderabad's urban mobility infrastructure.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The refinancing is expected to materially strengthen the project's financial flexibility, enabling the Government of Telangana to accelerate the planned expansion of Hyderabad's metro network, including new corridors and enhanced connectivity. The transaction also establishes a replicable financing framework for urban transit systems across the country as India accelerates investment in sustainable mobility and integrated urban infrastructure.

IRFC's share price has struggled to regain momentum on Dalal Street after hitting a record high of ₹229 apiece in July 2024. The stock has since lost nearly 56% of its value, with the selling pressure continuing in the current year as well, with the stock declining another 20% so far.