In a landmark deal, Indian Railway Finance Corporation has signed a Rs 13,527 crore term loan agrement with L&T Metro Rail (Hyderabad) Ltd. to refinance the debt obligations of the Hyderabad Metro Rail Project. This marks one of the largest refinancing transactions in India's urban transit space, the company confirmed in an exchange filing on Monday.
The deal follows the transfer of 100% ownership of L&T Metro Rail (Hyderabad) from Larsen and Toubro to the Government of Telangana through Hyderabad Metro Rail Limited.
The facility will refinance existing debt obligations including non-convertible debentures, commercial papers and term loans, enabling an orderly exit for existing lenders while significantly improving the project's long-term financial sustainability.
The loan agreement was signed in the presence of IRFC CMD and CEO Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao.
Structured over a 20-year tenure with quarterly repayments, the facility replaces higher-cost debt with competitively priced long-term rupee financing.
Notably, it carries no processing fees, commitment charges or prepayment penalties. The transaction is supported by an unconditional and irrevocable undertaking by the Government of Telangana, a state government guarantee, and an RBI-backed direct debit mandate.
Hyderabad Metro Phase I spans 69.2 km across three corridors with 57 stations and currently serves over 5 lakh passenger journeys daily - making it one of the world's largest metro projects developed under the PPP model.
"IRFC stands ready to serve as a trusted domestic financing partner, channelling Indian savings into India's infrastructure on Indian terms," Dubey said, adding that the transaction demonstrates that large-scale urban infrastructure can be financed domestically through efficient, long-tenor funding structures aligned to project cash flows
Shares of both IRFC and L&T are trading with gains of around 2.5% on Monday.
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