L&T expects majority of Hyderabad metro loan from SBI

HYDERABAD: Infra major L&T, which is in the process of raising debt for its recently bagged Rs 12,132 crore metro rail project in the city, anticipates major chunk of the debt from State Bank of India, a top Larsen and Toubro official said today.

According to Larsen and Toubro Hyderabad Metro Rail Managing Director VB Gadgil the company is not going to achieve the financial closure by February next year.

Unlike the traditional model where companies approach banks and financial institutions for specific fund, L&T approached them with project details and revenue models and expects the banks to come out on how much they are going to fund, he said.

"Normally in infra projects they go up to 4:1 (debt-equity ratio). This is a large project of its own kind not only in India but in the world. Everybody will be cautious. Somebody wanted to give Rs 2,000 crore-3,000 crore. SBI is the largest among all banks," Gadgil said refusing to specify on how much SBI is going to lend.

He said the company is in talks with other major banks including ICICI, Axis and Punjab National Bank for tying up debt component of the project.

Gadgil does not anticipate changes in the project schedules due to the change in the leadership in Andhra Pradesh.

"Agitations like Telangana or change in the leadership will not affect the progress of the project," he said.

The Centre will provide Rs 1,458 crore viability gap funding for the project, while the state government on its part would spend Rs 1,980 crore towards acquisition of 204 acres of land, including relief and rehabilitation of the affected people.

According to the agreement, L&T would also provide bank guarantee of Rs 360 crore as performance security.

Gadgil said topographical survey is currently underway and geo-technical explorations are being carried out in order to save time so as to finish the project on schedule - five years from the date of handing land to L&T.

To a query, he said L&T will get 18.5 million ssp floor space related to the project.

The Hyderabad metro rail project will cover high-density traffic corridors over a 70-kilometre route in the city.