IRFC Agrees to Refinance Hyderabad Metro Project for Rs 13,500 Crore, Shares Increase 2.5%

IRFC Enters Urban Infrastructure Financing with Rs 13,527 Crore Deal

Indian Railway Finance Corporation (IRFC) shares surged up to 3 percent on Monday, driven by the company's foray into urban infrastructure financing through a significant deal worth over Rs 13,000 crore. The stock climbed 2.94 percent to an intraday high of Rs 101.08 on the National Stock Exchange (NSE).

The buying interest in IRFC shares came after the company informed the exchanges that it has signed a Rs 13,527 crore refinancing agreement with L&T Metro Rail (Hyderabad) Limited for the Hyderabad Metro Rail project. This transaction marks IRFC's entry into urban infrastructure financing and is part of its diversification beyond conventional railway assets.

According to IRFC, the deal is a 20-year term loan facility with quarterly repayments, replacing higher-cost debt with long-term rupee financing. Notably, the facility carries no processing fee, no commitment charges, and no prepayment penalties. The transaction follows the transfer of 100 percent ownership of L&TMRHL to the Government of Telangana through Hyderabad Metro Rail Limited.

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

The refinancing agreement is supported by credit enhancement measures, including an undertaking by the Government of Telangana for payment obligations, a state guarantee, and an RBI-backed direct debit mechanism. The Hyderabad Metro Rail Phase-I spans 69.2 km across three corridors with 57 stations and is operated under a public-private partnership model.

IRFC's agreement with L&T Metro Rail (Hyderabad) Limited marks a significant step in its plan to expand financing into wider infrastructure sectors. This move underscores the company's commitment to diversifying its portfolio and exploring new opportunities in the urban infrastructure space.