Mumbai Metro 1’s debt restructuring has collapsed, pushing the line’s operator back towards insolvency proceedings and putting the planned expansion of its four-coach trains on hold. The Versova-Ghatkopar corridor carries around five lakh passengers every weekday, but its operations will not be affected immediately, according to the reported developments.
Reliance Infrastructure-led Mumbai Metro One Pvt Ltd (MMOPL) had agreed to 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 around Rs 1,100 crore and enable the withdrawal of insolvency proceedings against the company.
The restructuring required approval from India Infrastructure Finance Company (UK) Limited, or IIFCL UK, another lender to MMOPL. That approval was not granted. In a 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.
IIFCL UK moved the National Company Law Tribunal on the same day, initiating fresh insolvency proceedings seeking to have MMOPL declared unable to pay its debts. NARCL may also revive its earlier insolvency case after withdrawing it in connection with the proposed restructuring. MMOPL CEO Shyamantak Choudhury declined to comment, saying the matter was sub judice.
The company 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. It owes a further Rs 1,745 crore to IIFCL UK, according to the lender’s petition.
The immediate commuter concern is the stalled plan to add 22 coaches. MMOPL had said the procurement would lengthen at least 11 trains from four coaches to six, increasing capacity from 1,178 to 1,792 passengers per train. The additional coaches are estimated to cost around Rs 330 crore, at approximately Rs 15 crore each.
MMOPL said it had started the process to address peak-hour congestion, but cautioned that 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 buying the coaches after the restructuring collapsed.
Mumbai Metro 1 opened in 2014 as a public-private partnership between Reliance Infrastructure, which holds a 74 per cent stake, and the Mumbai Metropolitan Region Development Authority, which holds the remaining 26 per cent. The company began defaulting on its obligations in April 2018, after facing high construction costs and accumulated interest.
The line’s stations were designed to accommodate longer trains, but the operator’s financial difficulties have prevented the purchase of additional coaches. The corridor connects residential areas in Andheri with commercial and industrial locations including Marol and Sakinaka, while passengers from other Metro lines also feed into it during peak hours.
The next steps will depend on the insolvency proceedings, the lenders’ decisions and whether MMOPL can secure financial support for the proposed capacity expansion.
