State Government Secures 100% Ownership of Hyderabad Metro in Massive Rs 1,461 Crore Deal

Hyderabad Metro Phase-1 acquisition has placed the city’s Phase I metro project fully under the Government of Telangana. It is held through Hyderabad Metro Rail Limited. The Rs. 1,461.47 crore transaction gives the state 100% equity in L&T Metro Rail (Hyderabad) Limited. This is reported by the railway transport news portal Railway Supply.

The deal moves the metro system from a Public-Private Partnership structure to direct government control. The Share Purchase Agreement was signed for that ownership transfer. It also supports unified institutional oversight for the metro network. The transition is expected to support financial stability and improve coordination. It is also expected to help shape a more commuter-focused urban transit system in Hyderabad.

Hyderabad Metro Phase-1 acquisition and ownership shift

The agreement was formalized in the presence of senior officials. They included Chief Secretary Mr. K. Ramakrishna Rao, Mr. Jayesh Ranjan, and HMRL Managing Director Mr. Sarfaraz Ahmad. As The New Indian Express reported, it was executed by Mr. Sarfaraz Ahmad on behalf of HMRL, Mr. D. K. Sen for L&T, and Mr. K. V. B. Reddy. Their involvement reflected the strategic nature of the ownership transfer.

A major part of the transaction involves refinancing existing debt of Rs. 13,538.53 crore. The Telangana government guarantee is expected to provide financial continuity. It is also expected to support the project’s long-term stability. IDBI Capital acted as the financial advisor for the transaction. Separately, Saraf & Partners served as the legal advisor.

Hyderabad Metro has operated as one of the world’s largest metro PPP projects. Since its launch in 2017, it has become an important part of urban mobility in the city. The network covers 69 km across three main corridors. It carries around 4.5 lakh passengers daily. In addition, it has recorded nearly 86 crore journeys. The system has contributed to better connectivity, shorter travel times, and economic growth across Hyderabad.

PPP to government control

The move to full government ownership is expected to make future planning and expansion easier. With the state now in complete control, integration with upcoming metro phases can be handled through a more centralized structure. This keeps ownership, financial control and future network expansion within the same government-led transition. Also, the transition is expected to support quicker decision-making. It is expected to improve revenue and investment management. At the same time, it keeps focus on service quality, commuter needs and affordability.

L&T divestment

For Larsen & Toubro, the sale represents the monetisation of a mature infrastructure asset, as L&T described it. The company is focusing on core engineering and construction activities. It is also focusing on technology-led businesses and capital redeployment for future growth. Meanwhile, L&T leadership described Hyderabad Metro as an example of large-scale infrastructure delivery and engineering capability.

Shri S N Subrahmanyan, Chairman & Managing Director, L&T, said: “This transaction reflects L&T’s continued focus on creating long-term value and strengthening its portfolio of core, technology-led businesses. Hyderabad Metro Rail project is a world-class asset and a good example of our ability to deliver large-scale infrastructure that transforms cities and improves quality of life. We are confident that under the stewardship of the Government of Telangana, the project will continue to grow and create long-term value for all stakeholders”.

Shri D K Sen, Advisor to L&T CMD, Development Projects, said, “This development marks a significant milestone in L&T’s journey of value creation under its long-term strategic plan. Hyderabad Metro stands as a testament to L&T’s capability to conceptualise, execute and operationalise large-scale infrastructure projects under the PPP framework. It has played a pivotal role in enhancing urban mobility and connectivity in the city. We are proud to have been part of this transformative journey and are confident that the company will scale new heights going forward.”

Hyderabad Metro expansion after the acquisition

After the acquisition, HMRL is expected to accelerate work on Hyderabad Metro expansion. The next areas of focus include expansion of corridors and improved multimodal integration. They also include stronger last-mile connectivity and smart mobility solutions. These steps are intended to reinforce Hyderabad’s position in India’s urban transit landscape. They are also intended to support sustainable transport development.

The full takeover of Hyderabad Metro Phase I by the Telangana government marks a governance shift for the city’s metro system. By combining direct control with financial restructuring, the state aims to support expansion. It also aims to improve commuter experience. The state also aims to build a metro network suited to Hyderabad’s continued urban and economic growth.

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