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Infrastructure giant Larsen & Toubro (L&T) confirmed that its disinvestment from the Hyderabad Metro Rail project would be finalised within the ongoing financial year. The Telangana government has agreed to acquire the company's equity in L&T Metro Rail (Hyderabad) Ltd for INR 2,000 crore while also assuming its debt obligations of INR 13,000 crore. With L&T holding nearly 90 per cent equity in the project, the transaction will see the state fully taking over Phase-I of the 70-kilometre metro network.
Larsen & Toubro recently announced that its divestment from the Hyderabad Metro Rail project is expected to be completed by the close of the current financial year. In a regulatory filing to BSE, the company mentioned that the process of disinvestment is progressing as planned and that an in-principle understanding has been reached with the Telangana government. Advertisement
The state has agreed to refinance the existing debt and acquire the equity of L&T Metro Rail (Hyderabad) Ltd at the mutually agreed values. Official sources disclosed that the government will pay INR 2,000 crore for L&T's equity stake in the concessionaire while also taking over outstanding debt obligations of INR 13,000 crore.
L&T, which currently holds around 90 per cent equity in the project, had last month conveyed its intent to exit the venture. The company explained that it sought to transfer its stake to either the state or the central government via a new Special Purpose Vehicle (SPV), citing sustained operational and accumulated losses. The Phase-I project, extending to nearly 70 kilometres, will now be entirely under the state's management once the transaction is concluded.
The planned divestment represents a major restructuring for the Hyderabad Metro Rail project, with the Telangana government assuming both equity and debt responsibilities. For L&T, this step allows the company to exit a venture that has faced financial challenges since inception, while for the state it marks the beginning of direct control over a significant urban infrastructure project. The move is expected to stabilise operations and provide clarity on the metro's long-term governance.
Source - PTI
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