HYDERABAD: The Telangana government has agreed to take over Phase-I of the Hyderabad Metro Rail project from L&T Group for ₹2,000 crore, covering the equity stake in L&T Metro Rail Hyderabad Ltd, according to official sources.
As part of the agreement, the state will also assume the company’s debt of ₹13,000 crore. L&T currently holds about 90% equity in the project.
Last month, the infrastructure giant expressed its intention to divest its stake—approximately 70 km—of the Metro Rail project to either the state or central government via a new Special Purpose Vehicle (SPV), citing operational and accumulated losses.
Chief Minister A. Revanth Reddy, alongside senior officials, met with L&T Group CMD S.N. Subrahmanyan and others on Thursday to discuss next steps.
“After comprehensive negotiations aimed at speeding up the phase 2 approval from the Government of India, it was tentatively agreed that the state would take over Phase-I of the Metro Rail project, along with the existing debt of approximately ₹13,000 crore. Additionally, the state will make a one-time payment of ₹2,000 crore to L&T for their equity investment in LTMRHL,” sources revealed.
The precise conditions of the takeover will be determined through mutual discussions, ensuring a methodical process that adheres to all legal and statutory requirements, they added.
According to L&T Metro Rail’s most recent annual report, revenue from operations and other income for the fiscal year 2024-25 was ₹1,108.54 crore, down from ₹1,399.31 crore the previous year—a reduction of 21%.
The loss before and after tax rose to ₹625.88 crore for the current fiscal period, compared to the previous year’s loss of ₹555.04 crore, marking a 13% increase in losses.
L&T signed the Concession Agreement with the then Government of Andhra Pradesh in September 2010 and achieved financial closure for the project by March 2011.
A consortium of 10 banks led by the State Bank of India has approved the full debt requirement for the project.
Due to delays and cost overruns, the concessionaire submitted claims totaling ₹3,756 crore to the state government in March 2017, which expanded to ₹5,000 crore by the time the metro was fully operational in February 2020.
L&T Metro Rail also indicated that it could not participate in Chief Minister Revanth Reddy’s ambitious Phase-II A and Phase-II B elevated rail corridor expansions as a public-private partnership partner.
