Larsen & Toubro (L&T) has confirmed that an in-principle understanding has been reached with the Government of Telangana (GoT) for the state’s takeover of the Hyderabad Metro Rail project, marking a major shift in ownership of one of India’s largest urban transport projects.
In a disclosure to the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), L&T stated that the GoT will take over the Hyderabad Metro SPV by refinancing the current debt and acquiring equity of L&T Metro Rail (Hyderabad) Limited at agreed values. The company expects the divestment to be completed by the end of the current fiscal year, FY26.
Background
Hyderabad, which ranked second in the country in 2014 in terms of metro network length, has since slipped to ninth place. To address the city’s growing demand for public transport, the Telangana government has proposed an ambitious Phase 2A and 2B expansion totalling 163 km. The Government of India (GoI) has reviewed the proposals but flagged concerns over operational integration, as Phase 1 is privately operated by L&T while Phase 2 is being planned as a government-run network.
భవిష్యత్తు అవసరాలకు అనుగుణంగా హైదరాబాద్లో మెట్రో రైలు సేవలను విస్తరించేందుకు, ఇప్పుడున్న మొదటి దశ మెట్రోను స్వాధీనం చేసుకోవాలని రాష్ట్ర ప్రభుత్వం నిర్ణయించింది. కంపెనీ రవాణా సంబంధిత వ్యాపారాల నుంచి వైదొలగిన నేపథ్యంలో మెట్రో ఫేజ్ 2 విస్తరణలో భాగస్వామిగా ఉండలేమని ఎల్ అండ్ టీ… pic.twitter.com/3ksc2meDv3
— Telangana CMO (@TelanganaCMO) September 25, 2025
The Government of India insisted on a definitive agreement between Telangana and L&T to ensure seamless integration of both phases, including revenue and cost-sharing, before clearing the proposal.
L&T, having exited the transport concession business, declined to participate in Phase 2 as an equity partner or sign the agreement. Instead, it offered to divest its entire stake in Hyderabad Metro Rail (Phase 1) to the state.
Telangana Govt to take over Phase I of Hyderabad Metro from L&T
To cater to Hyderabad’s fast-growing public transport needs, the Government of Telangana has proposed 8 new metro lines under Phase 2A & 2B, totaling 163 km of additional network. The Government of India has been… pic.twitter.com/GJCP7bQEZF
— Hyderabad Metro Rail Ltd. (@HMRLHydmetro) September 26, 2025
Negotiations and Settlement
To resolve the impasse, Telangana CM A. Revanth Reddy met L&T Group CMD S.N. Subrahmanyan on 25 September. L&T proposed that the state take over the Metro’s debt of about Rs 13,000 crore and pay nearly Rs 5,900 crore for its equity. It also pointed out pending dues of Rs 2,100 crore from a previous agreement.
Following negotiations, it was agreed in principle that the Telangana government would assume the debt and pay about Rs 2,000 crore to L&T as a one-time settlement for its equity in L&T Metro Rail (Hyderabad) Limited.
Political Reaction
Reacting to this development, BRS working president K.T. Rama Rao alleged that Chief Minister Revanth Reddy has set his eyes on the 280 acres of land allotted to the Metro project. He claimed Congress leaders want to oust L&T and divide the land among themselves. He further alleged that Revanth Reddy is conspiring to hand over some of the malls to his friends and close companies.
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