Indian Railway Finance Corporation (IRFC) has signed a Rs 13,527 crore term loan agreement with L&T Metro Rail (Hyderabad) (L&TMRHL) to refinance the debt obligations of the Hyderabad Metro Rail project, marking a landmark refinancing transaction in India’s urban transit sector. The transaction reflects IRFC’s continued evolution into a diversified infrastructure financing institution while leveraging its core strength in long-term transportation finance, in alignment with the Government of India’s vision of Viksit Bharat.
The refinancing follows the transfer of 100 per cent ownership of L&TMRHL from Larsen & Toubro to the Government of Telangana through Hyderabad Metro Rail (HMRL), transforming the metro network into a strategic public mobility asset under state ownership and creating a stronger financial foundation for the phased expansion of Hyderabad’s metro ecosystem. 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 significantly improving the project’s long-term financial sustainability.
The transaction is supported by a robust credit enhancement framework, including an unconditional and irrevocable undertaking by the Government of Telangana for servicing all dues payable to IRFC, a state government guarantee, and an RBI-backed direct debit mandate. For IRFC, the agreement marks another significant step in the calibrated diversification of its financing portfolio beyond conventional railway assets into high-impact public utility infrastructure with strong national development relevance.
Indian Railway Finance Corporation is the dedicated market borrowing arm of the Indian Railways.
