Mumbai: Indian Railway Finance Corporation Ltd (IRFC), a Navratna Central Public Sector Enterprise under the Ministry of Railways, has signed a Rupees 13,527 crore term loan agreement with L&T Metro Rail (Hyderabad) Limited to refinance the debt obligations of the Hyderabad Metro Rail project.
The agreement marks a major refinancing transaction in India’s urban transit sector and highlights IRFC’s expanding role beyond conventional railway financing. The loan agreement was signed in the presence of IRFC CMD and CEO Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao.
Push For Sustainable Urban Mobility
According to the company, the transaction reflects IRFC’s continued evolution into a diversified infrastructure financing institution while leveraging its strength in long-term transportation finance. The refinancing is also aligned with the Government of India’s Viksit Bharat vision. “This transaction reinforces IRFC’s growing capability to structure innovative, long-tenor financing solutions for nationally significant infrastructure assets. It also reinforces our commitment to supporting sustainable urban mobility through efficient capital mobilisation,” Dubey said.
The refinancing comes after the transfer of 100 per cent ownership of L&T Metro Rail (Hyderabad) Limited from Larsen & Toubro Limited to the Government of Telangana through Hyderabad Metro Rail Limited. This has transformed the metro network into a strategic public mobility asset under state ownership.
Existing Debt To Be Replaced
The facility will refinance existing debt obligations, including non-convertible debentures, commercial papers, and term loans. The move is expected to allow an orderly exit for existing lenders while improving the project’s long-term financial sustainability.
Hyderabad Metro Rail Phase-I spans 69.2 kilometres across three corridors and has 57 stations. It is among the world’s largest metro rail projects developed under the public-private partnership model and currently caters to more than 5 lakh passenger journeys daily. The proposed expansion is expected to help the Telangana government extend metro connectivity to emerging growth corridors, increase carrying capacity, and improve last-mile connectivity across the metropolitan region.
20-Year Tenure Structure
The refinancing has been structured over a 20-year tenure with quarterly repayments. It replaces higher-cost debt with competitively priced long-term rupee financing. The facility carries no processing fees, commitment charges, or prepayment penalties.
The transaction is backed by a credit enhancement framework, including an unconditional and irrevocable undertaking by the Government of Telangana for servicing dues payable to IRFC, a state government guarantee, and an RBI-backed direct debit mandate. Dubey said the transaction shows that large-scale urban infrastructure can be financed domestically through efficient, long-term funding structures aligned with project cash flows.
Disclaimer: This article is based solely on the information provided in the uploaded IRFC press release/PDF. No external sources have been referred to.
