Indian Railway Finance Corporation Ltd (IRFC) has expanded its funding programme beyond Indian Railways, its traditional domain, by signing a ₹13,527-crore term loan agreement with L&T Metro Rail (Hyderabad) Limited (L&TMRHL) to refinance the debt of the Hyderabad Metro Rail project.
The transaction reflects the Navratna central public sector enterprise’s continued evolution into a diversified infrastructure financing institution while leveraging its core strength in long-term transportation finance in alignment with the Indian government’s vision, IRFC said in a statement.
The loan agreement was signed in the presence of Manoj Kumar Dubey, IRFC’s chairman, managing director and chief executive officer, and Telangana chief secretary K. Ramakrishna Rao, highlighting the strategic significance of the transaction in strengthening urban mobility infrastructure.
“This transaction reinforces IRFC’s growing capability to structure innovative, long-tenor financing solutions for nationally significant infrastructure assets. It also reinforces our commitment to supporting sustainable urban mobility through efficient capital mobilization,” Dubey said.
The refinancing follows the transfer of 100% ownership of L&TMRHL from Larsen & Toubro Ltd to the Telangana government through Hyderabad Metro Rail Limited (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 help 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.
Hyderabad Metro Rail Phase-I, spanning 69.2 kilometres across three corridors, with 57 stations, is among the world’s largest metro rail projects developed under the public-private partnership (PPP) model. It serves as a critical urban transport backbone for the city.
Sweet deal
Structured over a 20-year tenure with quarterly repayments, the refinancing replaces higher-cost debt with competitively priced long-term rupee financing. The facility carries no processing fees, commitment charges or prepayment penalties, making it efficient and borrower-friendly.
The transaction is supported by a 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 -backed direct debit mandate.
Dubey added, “This transaction demonstrates that large-scale urban infrastructure can be financed domestically through efficient, long-tenor funding structures aligned to project cash flows. IRFC stands ready to serve as a trusted domestic financing partner, channeling Indian savings into India’s infrastructure on Indian terms.”
Backed by its strong credit profile, sovereign credit strength, deep market access and zero non-performing assets () track record, IRFC is well-positioned to provide competitive long-term financing solutions for metro rail systems, urban transit projects and other strategically important public infrastructure assets.
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 relevance to national development. The financing entity aims to fund around 15 large-scale projects, each requiring at least ₹15,000 crore, over the next three years. This strategy is meant to help it reach ₹3 trillion in total sanctions within four years of expanding its operations beyond the Indian Railways, starting in FY26.
During FY26, IRFC sanctioned projects worth ₹72,949 crore and disbursed about ₹35,067 crore, exceeding its annual guidance. It participated in competitive and bilateral financing opportunities, securing bids worth around ₹56,251 crore.