SBICAPS appointed to value Hyderabad Metro Phase-I amid ₹13,600 crore loan row
Synopsis
Telangana and the Centre have moved past weeks of public blame-trading over a ₹13,600 crore loan dispute to appoint SBICAPS as an independent consultant for Hyderabad Metro's valuation and Phase-II planning — but the core financial standoff over the IRFC loan transfer remains unresolved, and the consultant's report will decide whether the expansion actually gets off the ground.
Key Takeaways
SBICAPS appointed as consultant to value Hyderabad Metro Phase-I and plan financing for Phase-II , decided at a New Delhi meeting on 23 June .
Revanth Reddy met Union Ministers Manohar Lal Khattar and G.
Kishan Reddy ; CMO called talks 'productive'.
At the centre of the dispute: a ₹13,600 crore IRFC loan transfer stalled despite RBI approval, according to Revanth Reddy.
Telangana formally acquired Hyderabad Metro Phase-I from L&T in April for ₹1,461 crore ; debt of ₹13,538.53 crore must be refinanced with a state guarantee.
A senior Union official and the State MA&UD Special Chief Secretary will coordinate the SBICAPS study for speedy completion.
SBICAPS has been appointed as the consultant to conduct a comprehensive valuation study of Hyderabad Metro Rail Phase-I, assess the financial framework for Phase-II, and identify lending agencies for the takeover — a decision reached at a high-level meeting in New Delhi on Tuesday, 23 June. The appointment follows weeks of escalating friction between the Telangana state government and the Centre over a stalled ₹13,600 crore loan transfer.
What Was Decided at the Meeting
Telangana Chief Minister A. Revanth Reddy met Union Minister for Urban Development Manohar Lal Khattar in the presence of Union Minister for Coal and Mines G. Kishan Reddy in New Delhi on Tuesday. The Chief Minister's Office (CMO) described the discussions as 'productive', with both sides arriving at a consensus to appoint SBICAPS as the independent consultant.
The consultant's mandate covers three areas: valuation of Metro Phase-I, identification and raising of loans required for the takeover, and a detailed study of expansion plans, construction costs, and financing for Phase-II. The state government and the Centre will determine the future course of action based on the consultant's report.
Both sides also agreed to designate a senior Union government official and the Special Chief Secretary of the State Municipal Administration and Urban Development (MA&UD) Department as coordination representatives to ensure speedy completion of the study.
Background: The ₹13,600 Crore Loan Dispute
The meeting on Tuesday came a day after Revanth Reddy and Kishan Reddy jointly met Railways Minister Ashwini Vaishnaw to discuss a loan from the Indian Railway Finance Corporation (IRFC) related to Metro Rail Phase-I.
That meeting, in turn, followed Revanth Reddy's public demand — made a week earlier — that the Centre release ₹13,600 crore in term loan refinancing without further delay. The loan, originally secured from a Japanese entity at an interest rate of 4 per cent, needs to be transferred from the IRFC to the state government following Telangana's formal acquisition of Hyderabad Metro Phase-I from Larsen & Toubro Limited (L&T).
Revanth Reddy stated that even after submitting a letter with the Reserve Bank of India's approval, the loan transfer was blocked. He directly blamed Kishan Reddy for stalling the release of funds — an allegation Kishan Reddy rejected, accusing the Chief Minister of running 'false propaganda' against him.
The L&T Acquisition and Debt Refinancing
The Telangana government formally acquired Hyderabad Metro Rail Phase-I from Larsen & Toubro Limited in April for ₹1,461 crore. Revanth Reddy claimed the state acquired L&T Metro assets valued at ₹30,000 crore for just ₹15,000 crore.
As part of the acquisition terms, the debt of LTMRHL — amounting to ₹13,538.53 crore as on 30 April, previously guaranteed by L&T — must be refinanced with a guarantee issued by the Telangana government. On 25 May, the state government signed a formal agreement with the IRFC for this term loan refinancing facility.
What Comes Next
With SBICAPS now mandated to deliver its study, the Centre and the state are expected to chart a joint roadmap for both the debt resolution and the expansion of the metro network under Phase-II. Revanth Reddy has also pressed the Centre to clarify its participation — financial and structural — in the proposed Phase-II project. The consultant's report will be pivotal in determining funding structures, lending agency selection, and the pace of expansion for one of India's largest urban transit systems.
Point of View
Buying both the Centre and Telangana time without either side conceding ground on the ₹13,600 crore loan dispute. What is striking is that a refinancing agreement was already signed with the IRFC on 25 May, yet the transfer remains blocked, suggesting the obstacle is political rather than procedural. Revanth Reddy's public accusations against Kishan Reddy — a senior BJP leader with deep Hyderabad roots — add an electoral undercurrent to what is ostensibly a transit infrastructure negotiation. The real test will be whether the consultant's mandate extends to recommending a resolution to the loan standoff, or merely papers over it.
NationPress
23 Jun 2026
Frequently Asked Questions
Why has SBICAPS been appointed for Hyderabad Metro?
SBICAPS has been appointed to conduct a comprehensive study covering the valuation of Hyderabad Metro Rail Phase-I, the identification and raising of loans required for the state takeover, and the financial planning for Phase-II expansion. The appointment was decided at a meeting between Telangana CM Revanth Reddy and Union Ministers Manohar Lal Khattar and G. Kishan Reddy in New Delhi on 23 June.
What is the ₹13,600 crore Hyderabad Metro loan dispute about?
Following Telangana's acquisition of Hyderabad Metro Phase-I from L&T, a ₹13,600 crore loan — originally secured from a Japanese entity at 4 per cent interest — needs to be transferred from the IRFC to the state government. Revanth Reddy says the transfer is blocked despite RBI approval, while Kishan Reddy has denied responsibility, calling the claims false propaganda.
How much did Telangana pay to acquire Hyderabad Metro from L&T?
The Telangana government formally acquired Hyderabad Metro Rail Phase-I from Larsen & Toubro Limited in April for ₹1,461 crore. The Chief Minister has claimed the state secured assets valued at ₹30,000 crore for ₹15,000 crore, though the associated LTMRHL debt of ₹13,538.53 crore must also be refinanced with a Telangana government guarantee.
What will happen after SBICAPS submits its report?
The Centre and the Telangana state government will decide the future course of action — including debt resolution, lending agency selection, and Phase-II construction financing — based on the consultant's findings. Two senior officials, one from the Union government and one from the state's MA&UD department, will coordinate the process.
What is Telangana's demand regarding Hyderabad Metro Phase-II?
Chief Minister Revanth Reddy has pressed the Centre to formally clarify whether it will participate — financially and structurally — in the proposed Hyderabad Metro Phase-II project. The SBICAPS study will also cover expansion costs and financing options for Phase-II.
