IRFC signs Rs 13,527-crore refinancing deal for Hyderabad Metro

New Delhi: Indian Railway Finance Corporation (IRFC) has signed a Rs 13,527-crore term loan agreement with L&T Metro Rail (Hyderabad) Limited to refinance the debt obligations of the Hyderabad Metro Rail project, marking one of the largest refinancing transactions in India’s urban transit sector.

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The agreement has been signed on Monday in the presence of IRFC CMD and CEO Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao.

In an official statement, IRFC said the transaction reflects its strategic diversification into infrastructure financing beyond conventional railway assets while leveraging its expertise in long-term transportation finance in line with the Government’s Viksit Bharat vision.

The refinancing follows the transfer of 100 percent ownership of L&T Metro Rail (Hyderabad) Limited from Larsen & Toubro Limited to the Telangana government through Hyderabad Metro Rail Limited, converting the metro network into a state-owned public mobility asset.

The facility will refinance existing debt obligations, including non-convertible debentures, commercial papers and term loans, enabling 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 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.

IRFC said the refinancing has been structured over a 20-year tenure with quarterly repayments and 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 strong credit enhancement framework, including an unconditional and irrevocable undertaking by the Telangana government for servicing dues payable to IRFC, a state government guarantee and an RBI-backed direct debit mandate.

“This transaction reinforces IRFC’s growing capability to structure innovative, long-tenor financing solutions for nationally significant infrastructure assets,” Dubey said, adding that the company remains committed to supporting sustainable urban mobility through efficient capital mobilisation.

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He further said the deal demonstrates that large-scale urban infrastructure can be financed domestically through efficient long-term funding structures aligned with project cash flows.

IRFC said the refinancing is expected to strengthen the financial flexibility of the Hyderabad Metro project and support the Telangana government’s plans for expansion of the metro network through new corridors and improved connectivity across the metropolitan region.

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