Hyderabad Metro Signs Rs 13,527 Crore Refinancing Deal With IRFC

The financial outlook for Hyderabad Metro Rail Limited is expected to improve significantly after a major refinancing agreement was signed with Indian Railway Finance Corporation on Monday.

Under the agreement, IRFC will provide refinancing support worth Rs 13,527 crore, a move expected to sharply reduce Hyderabad Metro’s borrowing expenses. Officials believe the lower interest burden could help the metro project move toward profitability within the next year.

According to government representatives, the refinancing arrangement will bring down the overall borrowing cost from nearly 10.5 percent to around 7 percent. The revised structure is expected to ease the project’s debt servicing pressure, which had remained a major challenge under the public-private partnership model.

The agreement also includes the transfer of complete ownership of the Hyderabad Metro project from Larsen & Toubro to the Telangana government at a reported cost of Rs 1,400 crore.

Telangana Chief Secretary K. Ramakrishna Rao stated that the metro network was already operationally profitable but continued to face financial losses because of high debt obligations. He expressed confidence that the state government’s takeover would help accelerate monetisation of metro-related real estate assets and improve the project’s financial stability.

Officials said the refinancing loan has been structured over a 20-year repayment period with quarterly installments. The new funding model replaces expensive existing loans with lower-cost long-term financing in Indian rupees.

The refinancing package is also considered borrower-friendly, as it reportedly does not include processing charges, commitment fees, or prepayment penalties.

IRFC CMD and CEO Manoj Kumar Dubey said the funding would be arranged through multiple financial instruments, including bonds, external commercial borrowings, and rupee-denominated loans.

The Telangana government believes the agreement will not only reduce current financial stress but also support future metro rail expansion in Hyderabad. The state is planning to add nearly 162 kilometers of new metro connectivity to the existing 69.2-kilometer network, which currently operates across three corridors and 57 stations.

The refinancing deal is also being viewed as a major step for IRFC, as it marks the company’s entry into urban metro rail financing, potentially opening opportunities for similar projects across India.

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