L&T built Hyderabad Metro on a 2010 PPP bet — 90% stake now offered to government

Larsen & Toubro signed the Hyderabad Metro Rail concession with the then undivided Andhra Pradesh government in September 2010 and closed the project's finances in March 2011, taking more than 90% of L&T Metro Rail through its own balance sheet — one of the largest PPP metro bets in the world.

Fifteen years later, L&T has told the Ministry of Housing and Urban Affairs it wants to offload the entire stake to the Telangana or Indian government through a new special purpose vehicle. In its letter, L&T Metro Rail said the state, 'despite repeated follow-ups', had not provided the expected financial assistance, and the delay was aggravating the concessionaire's financial duress.

The company cited structural, financial and regulatory challenges — property acquisition, right of way, alignment changes, utility shifting — causing substantial cost and time overruns 'beyond the control of the concessionaire', with the Covid-19 pandemic further denting ridership.

The numbers in the FY25 annual report explain the exit: revenue from operations and other income fell 21% to Rs 1,108.54 crore, and the pre- and post-tax loss widened 13% to Rs 625.88 crore. L&T said it remains open to selling the Phase-I network and its operations, together with Phases II-A and II-B, to the government to 'attain the intended objective'.

Rs 625.88 crore FY25 loss on revenue down 21% to Rs 1,108.54 crore; substantial cost and time overruns; L&T unable to participate in expansion phases

The concession bet assumed state assistance that successive follow-ups never secured.

Land acquisition, right-of-way and utility-shifting delays pushed costs and timelines far past the 2011 financial model.

Covid-19 permanently dented ridership, cutting FY25 revenue 21% below an already loss-making base.

L&T was locked out of the profitable expansion phases while carrying the operating losses of the network it built.

A PPP concession priced on traffic and state support holds neither as a promise: when ridership and assistance both fail, the asset walks back to the government.

As of the September 15, 2025 report: L&T stood ready to sell its 90%-plus stake in the existing Phase-I network and its O&M, plus Phases II-A and II-B, to the government of Telangana or India via a new SPV, having filed claims with the state; the government had not agreed to a purchase.