The Telangana government has appointed SBICAPS to reassess Hyderabad Metro Phase-I valuation and financing despite completing a similar exercise last year. The move has triggered questions over the earlier valuation, a Rs 84-crore upfront fee, and delays in securing loans for the takeover
Published Date – 23 June 2026, 07:07 PM
Hyderabad: The Hyderabad Metro Rail (HMR) takeover by Telangana government from L&T Metro has taken a curious turn, with the government taking up the process of Metro Phase – I valuation despite completing the exercise last year.
Interestingly, the government has now appointed SBICAPS as consultant to take up asset valuation, raise loans required for takeover and select lending agencies.
All this was done after the State government earlier engaged IDBI Capital for financial and legal due diligence and Delhi Metro Rail’s consultancy arm for a technical review. Subsequently, based on the recommendations of the IDBI Capital, the value of Metro Phase I assets was estimated to be between Rs 20,544 crore and Rs 22,102 crore.
The government has not explained what will happen to the upfront fee of Rs 84 crore it paid for the release of the first tranche of loan. This was done as per the terms stipulated by IRFC.
Another curious aspect behind the appointment of SBICAPS is that the State government is heading for a face-off with the State Bank of India (SBI) on the Raidurg land auction issue. The government had threatened to pull out all its deposits and halt all governmental transactions with SBI after the bank approached the Telangana High Court and secured a stay on the auction of a prime Raidurg land parcel that fetched Rs 237 crore per acre.
SBICAPS or SBI Capital Markets Limited is the investment banking and corporate advisory arm of SBI, which offers a full range of financial services including project advisory, capital markets, mergers and acquisitions, and structured finance.
The decision to appoint SBICAPS triggers more questions. There is no clarity on the upfront fee of Rs 84 crore paid by the State government and who will bear the interest component of nearly Rs 2.5 crore a day for the loan raised for takeover of Metro Phase-I.
As per the agreement signed with L&T on April 29, the State government agreed to refinance the Rs 13,538.53 crore debts of L&T Metro.
The decision to appoint SBICAPS was taken during Chief Minister A Revanth Reddy’s meeting with Union Ministers ML Khattar and Ashwini Vaishnaw in New Delhi on Tuesday. The Chief Minister along with Union Minister G Kishan Reddy met the Union Ministers to discuss the delay in disbursement of loan amount by the IRFC for the Metro Phase I takeover and the proposed Metro Rail Phase II project.
Revanth Reddy’s meeting with the Union Ministers came after a political storm where he accused Kishan Reddy of stalling the loan disbursement by IRFC. He had dashed off an open letter to Kishan Reddy seeking his help in facilitating a meeting with the Union Minister for Railways on the issue.
It was not immediately known on what transpired in the meeting in New Delhi, but the Chief Minister’s Office issued a press release on Tuesday afternoon saying SBICAPS had been appointed as the consultant. The terse statement neither throw any light on the earlier valuation by the IDBI Capital nor did it give any information on why SBICAPS was chosen.
The statement merely said the consultant will study the valuation of Hyderabad Metro Phase-I, raise loans required for takeover, and select lending agencies. This apart, a study will also be taken up on Metro Rail expansion, construction cost, and financing for Metro Phase-II.
The SBICAPS will conduct a comprehensive study on the valuation of Metro Rail Phase-I, expansion of Phase-II, and related matters. The State government and the Centre will decide the future course of action based on the report submitted by the consultant, the CMO press release said.
This assertion suggests that both the Metro takeover process and plans for Metro Phase-II may be returning to the starting point.
The Chief Minister and Union Ministers also agreed to appoint a senior official from the Union government and Special Chief Secretary of State Municipal Administration and Urban Development (MA&UD) Department as representatives for coordination during the study by the consultant. The two officials will work in coordination to facilitate the speedy completion of the study and official process.
