The Telangana Government’s ambitious plan to take over the Hyderabad Metro Rail project has encountered a significant financial hurdle, with a proposed ₹13,000 crore loan from the Indian Railway Finance Corporation (IRFC) yet to be finalized. The delay has stalled the takeover process and raised fresh uncertainty over the future management and expansion of one of India’s largest metro rail networks.
The state government had earlier signed an agreement to acquire Phase-I of the Hyderabad Metro Rail from Larsen & Toubro (L&T), taking over both the company’s equity stake and its outstanding debt. The proposed refinancing through IRFC was expected to reduce the project’s borrowing costs and provide financial stability for future expansion. However, the loan disbursement has remained pending, preventing the completion of the takeover.
Officials familiar with the project said that, in addition to the pending loan, the financial evaluation required for the takeover has not yet commenced. To address the issue, the Centre and the Telangana Government have agreed to appoint SBI Capital Markets (SBICAPS) as an independent consultant to assess the valuation of the metro assets, recommend financing options, and prepare a roadmap for completing the acquisition.
The Hyderabad Metro, currently operated by L&T Metro Rail Hyderabad, is India’s largest metro project developed under the Public-Private Partnership (PPP) model. While metro services continue without disruption, the ownership transition and refinancing are considered crucial for the implementation of Phase-II, which includes new corridors connecting the airport, Old City, and other rapidly developing suburbs.
The funding delay has also sparked a political debate between the Telangana Government and the Centre. State leaders have expressed concern over the prolonged approval process, while Union ministers have maintained that financial and procedural requirements must be completed before the loan can be released. Both sides have indicated that discussions are ongoing to resolve the remaining issues.
Despite the current setback, officials remain optimistic that once the financing package and valuation process are finalized, the Hyderabad Metro takeover will move forward. The project is expected to strengthen urban transportation, support future metro expansion, and improve connectivity for millions of commuters across the Hyderabad metropolitan region.