Mumbai Metro One debt shifted to National Bad Bank as State fails to resolve financial crisis

Mumbai, India (Metro Rail Today): In a significant financial move, Mumbai Metro One Private Limited (MMOPL), a joint venture partly owned by Reliance Infrastructure, has seen its crippling debt of ₹2,658 crore transferred to the National Asset Reconstruction Company Limited (NARCL), the country's national "bad bank." The deal comes after the state government struggled to finalize the takeover of the financially troubled metro project, leaving creditors with no choice but to sell off their loans.

According to sources, NARCL has acquired MMOPL’s outstanding debt at a steep discount of just ₹1,063 crore, amounting to a recovery of only about 35% of the total loan value. The debt was originally held by five major banks—State Bank of India, IDBI Bank, Canara Bank, Indian Bank, and Bank of Maharashtra—along with British lender IIFCL, though the latter's exposure remains unclear.

This acquisition follows months of uncertainty surrounding the future of MMOPL, which operates the first metro line in Mumbai and is a crucial part of the city's public transport network, carrying over 4 lakh passengers daily. Despite its importance, MMOPL has been grappling with a massive financial crisis, which led the state government to consider a buyout in July. However, due to its own financial limitations, the Mumbai Metropolitan Region Development Authority (MMRDA), tasked with taking over the operations, was unable to proceed with the settlement.

The situation began in March 2024 when the state cabinet initially approved a proposal to buy out Reliance Infrastructure’s 74% stake for ₹4,000 crore. However, with MMRDA unable to secure the funds, the plan fell through. Following this, MMOPL entered into a debt settlement agreement with its lenders, agreeing to pay ₹1,700 crore as a one-time settlement, including an upfront payment of ₹171 crore.

The transfer of MMOPL’s debt to NARCL marks a pivotal moment in the ongoing saga of the troubled metro project, as it now faces a new phase under the national asset reconstruction company.