Key Highlights
- Larsen and Toubro signs agreement to sell entire stake in Larsen and Toubro Metro Rail Hyderabad Limited for ₹1,461.47 crore.
- Buyer is Hyderabad Metro Rail Limited, a Government of Telangana enterprise.
- Transaction expected to be completed by June 30, 2026.
- Larsen and Toubro Metro Rail Hyderabad will cease to be a subsidiary after deal closure.
Larsen and Toubro Limited has announced the divestment of its entire shareholding in L&T Metro Rail Hyderabad Limited, marking its exit from the Hyderabad metro rail business. The company has executed a Share Purchase Agreement with Hyderabad Metro Rail Limited, a Government of Telangana enterprise, for a total consideration of ₹1,461.47 crore.
The disclosure was made under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations. Following the completion of the transaction, L&T Metro Rail Hyderabad Limited will cease to be a subsidiary of Larsen and Toubro.
Transaction Details and Timeline
The agreement for the stake sale was signed on April 29, 2026. The company stated that the divestment is expected to be completed by June 30, 2026, subject to customary closing adjustments.
The transaction involves the sale of 741,29,99,999 equity shares held by Larsen and Toubro in the metro rail subsidiary. The company clarified that the deal is not a related party transaction and has been executed on an arm’s length basis.
Financial Contribution of the Subsidiary
For the financial year ended March 31, 2025, L&T Metro Rail Hyderabad Limited reported revenue of ₹1,100.13 crore, contributing 0.43 percent to the consolidated revenue of Larsen and Toubro. The subsidiary’s net worth stood at ₹807.49 crore, accounting for 0.83 percent of the company’s consolidated net worth.
Strategic Implications
The divestment aligns with Larsen and Toubro’s broader strategy to optimize its portfolio and focus on core engineering and infrastructure segments. The exit from the Hyderabad metro business is expected to streamline operations and improve capital allocation efficiency.
Additionally, upon completion of the transaction, Hyderabad Metro Rail Limited is expected to refinance the existing debt of the subsidiary. As a result, corporate guarantees and letters of comfort issued by Larsen and Toubro in relation to this debt will be released.
Buyer Profile
Hyderabad Metro Rail Limited, the acquiring entity, is a government-backed organization under the Government of Telangana.