Indian Railway Finance Corporation on Monday signed a ₹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 highlights IRFC’s growing diversification beyond traditional railway financing as the Navratna PSU strengthens its presence in long-term infrastructure funding aligned with the Government of India’s Viksit Bharat vision.
The loan agreement was signed in the presence of IRFC CMD & CEO Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao.
Long-Term Financing Structure
The refinancing facility has been structured over a 20-year tenure with quarterly repayments. The deal replaces higher-cost debt with competitively priced long-term rupee financing, improving the project’s long-term financial sustainability.
The proceeds will refinance existing liabilities including non-convertible debentures (NCDs), commercial papers, and term loans, enabling an orderly exit for existing lenders.
The facility carries no processing fees, commitment charges, or prepayment penalties, making it an efficient refinancing mechanism for the project.
Hyderabad Metro Strengthens Expansion Plans
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 caters to over 5 lakh passenger journeys daily and plays a vital role in Hyderabad’s urban transportation system.
The refinancing follows the transfer of 100% ownership of L&TMRHL from Larsen & Toubro Limited to the Government of Telangana through Hyderabad Metro Rail Limited (HMRL), strengthening the project’s ownership and financial structure.
The improved financial flexibility is expected to support future metro expansion, including new corridors, enhanced connectivity, and better last-mile transportation infrastructure across Hyderabad.
Strong Credit Support Framework
IRFC stated that the transaction is backed by a robust credit enhancement framework, including:
- Unconditional and irrevocable undertaking by the Government of Telangana
- State government guarantee
- RBI-backed direct debit mandate
According to IRFC CMD Manoj Kumar Dubey, the transaction demonstrates the company’s ability to structure innovative long-tenor financing solutions for nationally significant infrastructure projects while supporting sustainable urban mobility initiatives.
With its sovereign-backed borrowing profile, strong market access, and zero-NPA track record, IRFC aims to expand its role as a long-term financing partner for metro rail systems and strategic infrastructure projects across India.