Centre-backed NARCL offers to buy out Mumbai Metro 1’s ₹2,658-crore debt | Mumbai news
Mumbai: In a major relief to Mumbai Metro One Private Limited (MMOPL), which operates the Versova-Andheri-Ghatkopar metro, the Centre-backed bad loan aggregator, National Asset Reconstruction Company Ltd (NARCL), has offered to buy out its ₹2,658-crore debt, officials said.
MMOPL, a 74:26 joint venture between Anil Ambani-led Reliance Infrastructure and the Maharashtra government-backed Mumbai Metropolitan Region Development Authority (MMRDA), owes the money to five public banks—State Bank of India, IDBI Bank, Canara Bank, Indian Bank, and Bank of Maharashtra.
“MMOPL’s outstanding loans have been assigned to NARCL. This will give MMOPL some breathing space and help to restructure the financial structure of the company. This could also boost the metro operations,” said a government official, requesting anonymity.
The NARCL has offered cash and security receipts to the banks that lent money to MMOPL, officials said. The decision could also revive the MMRDA’s proposed takeover of MMOPL after the state government backed out of it earlier this year.
Mumbai Metro 1 was the first metro project awarded in the country on a public-private partnership basis. The 11-km metro line is a crucial east-west connector in the city that passes through densely crowded residential and commercial areas. Around 450,000-500,000 people travel on Metro 1 daily. Commuters have been demanding an increase in the number of coaches per rake from four to six due to the rush.
In 2023, the banks that lent money to MMOPL had filed a petition at the National Company Law Tribunal to admit the company into corporate insolvency to recover loans worth several hundred crores. In April this year, the NCLT disposed of the insolvency proceedings following a one-time debt settlement agreement between the lenders and the company.
The resolution paved the way for the Maharashtra government to buy out Reliance Infrastructure’s stake, as recommended by an independent committee chaired by former state chief secretary Johny Joseph. The Maharashtra Cabinet had even cleared the proposal to purchase Reliance Infrastructure’s 74% stake in MMOPL for ₹4,000 crore. However, in June 2024, the state government reversed its decision, citing a lack of funds.
The NARCL’s decision to take on MMOPL’s bad debts would bring some relief to the metro operator. Reliance Infrastructure has been looking to exit the metro project since at least 2020, but disagreements over valuations have stalled any takeover.
The Centre had incorporated NARCL in 2021 to aggregate non-performing assets (loans overdue for more than 90 days) in the banking industry. Public sector banks own a majority stake in NARCL, with private lenders holding the balance.
