Telangana looks to GIFT City to fund Hyderabad Metro buyout after IRFC setback

Telangana looks to GIFT City to fund Hyderabad Metro buyout after IRFC setback Updated – August 21, 2026 11: 45 pm IST – HYDERABAD.

Key points

• Their assessment formed the basis for fixing the state's equity payment to L&T at ₹1, 462 crore and the proposed ₹13, 527-crore borrowing from IRFC which fell through.
• A Hyderabad Metro train passes over Parade Ground metro station against a twilight sky in Secunderabad.
• Nevertheless, it remains unclear whether funding through GIFT City would additionally require prior approval from the Centre before disbursement.
• While the Centre and the State were projected to nominate office-holders to coordinate the process, little progress has been created public.
• During a session in June attended by Chief Minister A.

Meanwhile, a Hyderabad Metro train passes over Parade Ground metro station against a twilight sky in Secunderabad. Photo Credit: RAMAKRISHNA G.

In practice, the Telangana administration. It has engaged SBI Capital Markets (SBI Caps) to secure a soft loan of around ₹13, 500 crore for acquiring the 69.2-km Phase I of Hyderabad Metro Rail (HMR) from L&T, is reportedly exploring funding options through Gujarat's GIFT City.

Senior authorities, speaking on condition of anonymity, stated SBI Caps has been asked to rapidly identify an alternative funding partner after the proposed loan of ₹13, 527 crore from the Indian Railway Finance Corporation (IRFC) was halted at the last minute in May. The move reportedly followed intervention from the Ministry of Railways. It maintained that IRFC's mandate is limited to financing new projects and not the refinancing of existing assets.

As it allows refinancing of existing projects through foreign currency loans, authorities stated GIFT City could offer a feasible solution. This could provide much-needed relief to the State administration. It is attempting to break the deadlock over the proposed expansion of Hyderabad Metro through a 50: 50 joint venture with the Centre.

Nevertheless, it remains unclear whether funding through GIFT City would additionally require prior approval from the Centre before disbursement. State authorities, nevertheless, are optimistic, pointing out that the administration has already obtained clearances from the Reserve Bank of India and provided statutory guarantees to backing the proposed borrowing.

There is additionally uncertainty over whether SBI Caps is revisiting the financial and technical valuation of HMR Phase I earlier undertaken by consultants such as IDBI Capital and DMRC International. Their assessment formed the basis for fixing the state's equity payment to L&T at ₹1, 462 crore and the proposed ₹13, 527-crore borrowing from IRFC which fell through.

During a session in June attended by Chief Minister A. Revanth Reddy and Union Ministers Manohar Lal Khattar, Ashwini Vaishnaw and G. Kishan Reddy, it was decided that SBI Caps would undertake a fresh valuation of HMR Phase I. The objective is to create a unified metro entity comprising both the existing network and the proposed 122.9-km Phase II project, estimated to cost ₹38, 595 crore, thereby facilitating a 50% equity participation by the Centre.

While the Centre and the State were projected to nominate office-holders to coordinate the process, little progress has been created public. Meanwhile, the State administration appears to be moving ahead rapidly with preparations for HMR Phase II, including seeking departmental clearances, calling tenders to appoint a General Consultant for five of the seven proposed corridors covering 63 km and approaching DMRC for procurement of 60 metro coaches to augment HMR Phase I.

But, there could be roadblocks. "Without formation of the JV and the required approvals from the Centre, the statutory agencies concerned will not grant clearances for new train sets operations or commissioning new routes as per the Metro Act, " remarked an official, unwilling to be identified.

Taken together, the developments around telangana looks to GIFT City to fund Hyderabad Metro buyout after IRFC point to a situation that is still moving, and the coming days should bring more clarity.