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State-owned Indian Railway Finance Corporation (IRFC) has signed an agreement with L&T Metro Rail (Hyderabad) Ltd to refinance the debt obligations of the Hyderabad Metro Rail project through a term loan of INR 13,527 crore. The company plans to disburse INR 13,500 crore by June 2026. This marks IRFC’s first financing deal in the metro rail segment and signals its entry into urban infrastructure funding beyond the railway sector. To support the transaction, IRFC has raised USD 1.1 billion through external commercial borrowings in Japanese Yen and is targeting overall fundraising of INR 70,000 crore during the current financial year.
State-owned Indian Railway Finance Corporation (IRFC) has signed an agreement with L&T Metro Rail (Hyderabad) Ltd to refinance the debt obligations of the Hyderabad Metro Rail project, marking the PSU’s first financing transaction in the metro rail sector. Advertisement
Under the agreement, IRFC will extend a term loan of INR 13,527 crore for the Hyderabad Metro Rail project. The company is expected to disburse nearly INR 13,500 crore to Hyderabad Metro by June 2026, according to IRFC Chairman and Managing Director Manoj Kumar Dubey.
The refinancing arrangement is expected to support the financial restructuring of the Hyderabad Metro project, which is one of the country’s largest metro rail networks developed under the public-private partnership model. The project, operated by L&T Metro Rail Hyderabad Ltd, has faced debt-related pressures over the past few years amid high project costs and changing urban mobility patterns.
Dubey said the Hyderabad Metro transaction could open up opportunities for similar financing deals in the urban transport sector. He added that nearly 50 metro projects are currently in the pipeline across the country, creating significant business opportunities for infrastructure financing companies.
To meet the financing requirement for the Hyderabad Metro deal, IRFC has raised external commercial borrowing (ECB) worth USD 1.1 billion in Japanese Yen. The move reflects the company’s increasing focus on diversifying its funding sources through both domestic and overseas markets.
Traditionally focused on financing Indian Railways projects, IRFC has recently been expanding its lending portfolio into other infrastructure segments including metro rail, logistics and transport-linked projects. The Hyderabad Metro refinancing is being seen as a strategic step in that direction.
The company also plans to raise around INR 70,000 crore during the current financial year through a mix of domestic borrowings and overseas fundraising programmes to support future business growth and infrastructure financing activities.
Source PTI
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