Mumbai Metro One’s debt restructuring agreement has collapsed, sending the operator back into fresh insolvency proceedings and putting the proposed expansion of trains from four coaches to six on hold. The Versova-Ghatkopar Metro 1 line carries around five lakh passengers every weekday, although services will continue to operate for now.
Reliance Infrastructure-led Mumbai Metro One Pvt Ltd (MMOPL) had entered into a master restructuring agreement with the National Asset Reconstruction Company Limited (NARCL) in July. The arrangement was intended to reduce MMOPL’s debt to NARCL by about Rs 1,100 crore and lead to the withdrawal of insolvency proceedings against the company.
However, the agreement required approval from India Infrastructure Finance Company (UK) Limited, or IIFCL UK, another lender to MMOPL. That approval was not received. In a regulatory filing to the Bombay Stock Exchange and the Securities and Exchange Board of India on September 29, MMOPL said NARCL had revoked the restructuring because a condition requiring approval from IIFCL had not been fulfilled.
On the same day, IIFCL UK approached the National Company Law Tribunal to begin fresh insolvency proceedings against MMOPL. The lender’s petition says MMOPL owes it Rs 1,745 crore. The company separately owes Rs 2,771.32 crore to NARCL, which took over loans originally provided by Canara Bank, Indian Bank, Bank of Maharashtra, State Bank of India and IDBI Bank.
MMOPL CEO Shyamantak Choudhury declined to comment, saying the matter was sub judice. If the insolvency process continues, the company could eventually be auctioned. NARCL may also revive its earlier insolvency case, which it had withdrawn after the restructuring agreement was signed.
The financial setback directly affects a proposed capacity increase on Mumbai’s most crowded Metro line. MMOPL had said it had begun the process of procuring 22 additional coaches, which would allow at least 11 four-coach trains to be lengthened to six coaches. The change would raise the capacity of each train from 1,178 passengers to 1,792.
The additional coaches are estimated to cost around Rs 330 crore, at approximately Rs 15 crore per coach. MMOPL said an accelerated delivery schedule had been planned, but procurement, commissioning and deployment would depend on financial restructuring and the availability of funds. An MMOPL official said there had been no further development on the purchase of the coaches after the restructuring collapsed.
The Metro 1 corridor runs from Versova through Andheri and Sakinaka to Ghatkopar, linking residential areas with major commercial and industrial destinations. Its stations were designed to accommodate longer trains, but MMOPL’s financial difficulties have prevented the operator from adding coaches.
The line opened in 2014 under a public-private partnership in which Reliance Infrastructure holds a 74 per cent stake and the Mumbai Metropolitan Region Development Authority holds the remaining 26 per cent. MMOPL began defaulting on its debt on April 1, 2018, after construction costs and accumulated interest increased its financial burden.
In 2023, the company’s rupee lenders initiated insolvency proceedings. They withdrew the case in 2024 after transferring the loans, classified as non-performing assets, to NARCL. The MMRDA had also considered buying Reliance Infrastructure’s stake, but the state Cabinet later reversed that decision on financial grounds.
The immediate operational impact for commuters is expected to be continued peak-hour crowding rather than a disruption of services. MMRDA has been pressing MMOPL to augment the trains, but the failed restructuring is likely to delay the procurement process further. The next major developments will depend on the NCLT proceedings, the lenders’ decisions and whether MMOPL can secure funds for the additional coaches.
