The Telangana government has agreed in principle to take over Phase-I of the Hyderabad Metro Rail project from Larsen & Toubro (L&T), in a deal valued at approximately ₹15,000 crore (CR). The arrangement involves the State assuming about ₹13,000 crore of project debt and paying ₹2,000 crore to L&T for its equity stake in the metro concessionaire, L&T Metro Rail Hyderabad Ltd (LTMRHL). This move is expected to streamline the expansion of the city’s metro network and accelerate approvals for Phase-II.
Phase-I of Hyderabad Metro spans around 70 km and has been largely operated by L&T, which holds about 90% equity in LTMRHL. According to the report, L&T had expressed interest in divesting its stake last month, citing operational challenges and accumulated losses as key reasons. The discussions and the in-principle agreement between the Telangana government and L&T followed detailed negotiations aimed at expediting the next phase of metro development with the Government of India’s support.
Telangana Chief Minister A. Revanth Reddy represented the State in the discussions, while S. N. Subrahmanyan, L&T Group CMD, represented the company. The settlement is described as “agreed in principle”, indicating that while the framework has been negotiated, formal execution of paperwork may still follow.
Financially, the deal covers two main components: first, the assumption of ₹13,000 crore in outstanding debt by the State, and second, a one-time payment of ₹2,000 crore to L&T for its equity in the concessionaire. Combined, these elements establish the transaction’s approximate value at ₹15,000 CR. Analysts view this as a significant step toward enabling a smoother transition for metro operations and ensuring that Phase-II approvals proceed without delays.
The Telangana government’s takeover is also expected to address strategic and operational risks that arose under L&T’s management. By assuming responsibility for both the debt and the equity, the State positions itself as the key stakeholder for future development, aligning with broader objectives of improving urban transport infrastructure and meeting the city’s growing transit needs.
From L&T’s perspective, the exit allows the company to reallocate resources and reduce exposure to a project that has faced financial and operational pressures. The deal reflects a mutual understanding: the government can now take direct control of a vital urban transport asset, while L&T gains an opportunity to divest under negotiated terms.
While the agreement is framed as “in principle”, market observers note that formal approvals and the completion of legal formalities will be required before the takeover is fully executed. The deal also underscores the increasing role of state governments in managing and financing large urban infrastructure projects in India, particularly those involving public-private partnerships (PPPs).
Once completed, the Telangana government’s assumption of Phase-I responsibilities is expected to set the stage for accelerated construction and expansion of Phase-II, which will improve connectivity, reduce travel time, and boost Hyderabad’s public transportation ecosystem.
In conclusion, the Telangana government’s in-principle agreement to take over Phase-I of the Hyderabad Metro represents a landmark transaction worth around ₹15,000 CR. By assuming ₹13,000 CR in debt and paying ₹2,000 CR to L&T for its equity, the State is positioned to take full control of metro operations and expedite future expansions, while L&T exits a financially challenging project. This move reflects both the strategic importance of Hyderabad’s metro network and the growing involvement of state authorities in urban infrastructure development.