Indian Railway Finance Corporation Ltd (IRFC), a Navratna central public sector enterprise under the Ministry of Railways, has signed a ₹13,527 crore term loan agreement with L&T Metro Rail (Hyderabad) Limited (L&TMRHL) to refinance the debt obligations of the Hyderabad Metro Rail project.
The agreement marks one of the largest refinancing transactions in India’s urban transit sector.
The loan agreement was signed in the presence of IRFC CMD & CEO Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao.
Refinancing to strengthen metro expansion plans
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).
The move transforms the metro network into a state-owned public mobility asset while creating a stronger financial base for future metro expansion in Hyderabad.
The facility will refinance existing debt obligations, including non-convertible debentures (NCDs), commercial papers and term loans, enabling an orderly exit for existing lenders while improving the project’s long-term financial sustainability.
Hyderabad Metro among largest PPP metro projects
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 network currently handles over five lakh passenger journeys daily and serves as a major urban transportation backbone for Hyderabad.
The proposed expansion plans are expected to improve connectivity to emerging growth corridors while enhancing carrying capacity and last-mile connectivity across the metropolitan region.
Long-term financing structure
The refinancing facility has been structured over a 20-year tenure with quarterly repayments. According to IRFC, the deal replaces higher-cost debt with competitively priced long-term rupee financing and carries no processing fees, commitment charges or prepayment penalties.
The transaction is backed by a multi-layered credit enhancement framework, including an unconditional and irrevocable undertaking by the Government of Telangana, a state government guarantee and an RBI-backed direct debit mandate.
Effecient capital mobilisation
IRFC CMD & CEO Manoj Kumar Dubey, said, “This transaction reinforces IRFC’s growing capability to structure innovative, long-tenure financing solutions for nationally significant infrastructure assets. It also reinforces our commitment to supporting sustainable urban mobility through efficient capital mobilisation.”
He added, “This transaction demonstrates that large-scale urban infrastructure can be financed domestically through efficient, long-tenor funding structures aligned to project cash flows. IRFC stands ready to serve as a trusted domestic financing partner, channeling Indian savings into India’s infrastructure on Indian terms.”
Focus on urban mobility financing
Leveraging its sovereign-backed borrowing strength, deep market access and zero-NPA track record, IRFC said it is well-positioned to provide long-term financing solutions for metro rail systems, urban transit projects and other strategic public infrastructure assets.
The company added that the transaction could serve as a replicable financing framework for urban transit systems across India as the country accelerates investments in sustainable mobility infrastructure.