Indian Railway Finance Corporation Ltd. (IRFC) on Monday 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, in a move aimed at strengthening the project's financial sustainability and supporting future metro expansion in the city. The refinancing comes after the transfer of 100 per cent ownership of L&TMRHL from Larsen & Toubro Limited to the Government of Telangana through Hyderabad Metro Rail Limited (HMRL), converting the metro network into a state-owned public mobility asset and creating a stronger financial framework for expansion plans.

The agreement was signed in the presence of IRFC CMD and CEO Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao. The refinancing facility will replace higher-cost debt with competitively priced long-term rupee financing over a 20-year tenure with quarterly repayments. The loan will refinance existing debt obligations, including non-convertible debentures (NCDs), commercial papers and term loans.The transaction is expected to help existing lenders make an orderly exit while improving the long-term financial position of the Hyderabad Metro project.

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 more than five lakh passenger journeys daily. The refinancing is also expected to support the Government of Telangana's plans to expand the metro network into new corridors and improve last-mile connectivity across Hyderabad's metropolitan region.

IRFC said the financing structure includes no processing fees, commitment charges or prepayment penalties. The facility is backed by a credit enhancement framework that includes an unconditional undertaking by the Government of Telangana for servicing dues payable to IRFC, a state government guarantee and an RBI-backed direct debit mandate.

IRFC CMD and CEO Manoj Kumar Dubey said the transaction demonstrates the corporation's ability to provide "innovative, long-tenor financing solutions" for large infrastructure projects and reflects its growing role beyond conventional railway financing.IRFC said the transaction also creates a replicable financing framework for urban transit systems across India as investments in sustainable urban mobility infrastructure increase.

Published on May 25, 2026