Indian Railway Finance Corporation Ltd. (IRFC), a Navratna central public sector enterprise under the Ministry of Railways, has signed a Rs 135.27 billion (Rs 135.27 bn) term loan agreement with L&T Metro Rail (Hyderabad) Limited (L&TMRHL) to refinance the debt of the Hyderabad Metro Rail project. The transaction marks a major refinancing in India’s urban transit sector and reflects IRFC’s diversification into transportation finance aligned with the Government of India’s Viksit Bharat vision. The agreement was executed on May 25, 2026. The signing took place in the presence of IRFC chief Manoj Kumar Dubey and Telangana Chief Secretary K. Ramakrishna Rao, underlining the strategic importance for city mobility. It follows the transfer of 100 per cent ownership of L&TMRHL from Larsen & Toubro to the Government of Telangana through Hyderabad Metro Rail Limited, converting the network into a state-owned mobility asset and strengthening the project’s financial base. IRFC said the deal demonstrates its ability to structure long-tenor financing for significant infrastructure. The facility will refinance existing non-convertible debentures, commercial papers and term loans and is structured over a 20-year tenure with quarterly repayments, replacing higher-cost borrowings with competitively priced rupee funding. The arrangement carries no processing fees, commitment charges or prepayment penalties and is backed by an unconditional and irrevocable undertaking from the Government of Telangana, a state guarantee and an RBI-backed direct debit mandate. IRFC indicated the package aims to improve long-term sustainability and allow an orderly exit for lenders. Hyderabad Metro Rail Phase-I spans 69.2 kilometres across three corridors with 57 stations and currently serves over 0.5 million (0.5 mn) passenger journeys daily, acting as a key urban transport backbone. The refinancing is expected to strengthen financial flexibility, support planned expansion including new corridors and last-mile connectivity, and create a replicable financing model for urban transit systems nationwide as India intensifies investment in sustainable mobility. The agreement advances IRFC’s calibrated diversification into high-impact public utility infrastructure.