SBI Caps Hunts for Loans to Fund Metro Takeover

SBI Capital Services (SBI Caps) is holding extensive discussions with national and international lenders to raise funds for the takeover of the first phase of the Hyderabad Metro project. The state government has set a target of securing the loans at an interest rate of 3% and completing the process within three months. The government has agreed to acquire three metro corridors from L&T for ₹15,000 crore, following the Centre’s direction to fully take over the first phase as a condition for approvals for seven corridors under the second phase. Of the total amount, ₹13,600 crore will be raised through bank loans, while the remaining ₹1,400 crore will be paid by the state government.

L&T had undertaken 72 km of the first phase under the PPP model in 2012 and completed 69 km. Rising project costs forced the company to borrow from various banks at interest rates of 7–8%. The financial burden increased further after the COVID-19 pandemic disrupted operations. To avoid a similar situation, the state government has directed SBI Caps to secure loans at a lower 3% interest rate. SBI Caps is reportedly approaching banks, GIFT City, JICA and the Asian Development Bank, while sharing details of metro assets and corridors and proposing repayment over 20 years.