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L&T shares climbed over 2% to a nine-month high after the Telangana government agreed to take over Phase-I of the Hyderabad Metro. The state will pay ₹2,000 crore to L&T for its equity and assume the project’s ₹13,000 crore debt.
Context: the Hyderabad Metro is India’s largest public-private partnership in urban transport. Commissioned in phases and fully operational since 2020, it carries lakhs of passengers daily.
Earlier this year, fares were hiked by 20% to shore up revenue. With Phase-2 awaiting the Centre’s nod, the state’s control is expected to fast-track expansion.
What’s the deal: for L&T, this is a welcome exit from a loss-making venture. The metro had been bleeding with operational and accumulated losses, and the company had been looking to divest its stake.
By transferring it to the state, L&T not only recoups its equity investment but also wipes out a ₹13,000 crore debt load.
The move frees up capital for L&T to focus on core businesses like EPC, infra, and defence manufacturing. For Telangana, it brings flexibility to manage and expand a critical public transport project.
