Maharashtra government will not buy out RInfra’s stake in Mumbai Metro One

Maharashtra government reverses decision to buy Reliance Infrastructure's stake in Mumbai Metro One amid financial constraints.

In a setback for Anil Ambani-led Reliance Infrastructure (RInfra), the Maharashtra government has reversed its own decision to buy out the private company’s stake in Mumbai Metro One. The decision comes just four months after the government had given a go ahead to the proposal, and ahead of the upcoming State Assembly election.

The Mumbai Metropolitan Region Development Authority (MMRDA) was to acquire RInfra’s stake for close to ₹4,000 crore (for an Enterprise Value of around ₹5,400 crore), after the special purpose vehicle, Mumbai Metro One Private Limited (MMOPL), had approached the then-Maha Vikas Aghadi (MVA) government in July 2020, seeking an exit. RInfra has a 74% stake in MMOPL, which owns the 11.4 km metro line on the Versova-Andheri-Ghatkopar route, and the balance is held by MMRDA.

Two people in the know confirmed to The Hindu that the proposal to acquire RInfra’s stake was reversed by the State government during the State Cabinet meeting held on Wednesday.

Given the snowballing political dialogue that surrounds any acquisition from a private player, especially a few months ahead of State polls to be held in October, the Mahayuti government has decided not to provide any opportunity to the Opposition alliance of the Congress, Shiv Sena (Uddhav Balasaheb Thackeray), and Nationalist Congress Party (Sharadchandra Pawar), a source said.

“One of the reasons assigned for backing out from the acquisition is lack of funds with the MMRDA,” another official said, requesting anonymity.

The development authority already has loans worth ₹1,03,622 lakh crore sanctioned for various infrastructure projects in multiple stages of implementation. Of this, nearly ₹27,000 crore debt has been availed so far. In March, it had presented a deficit 2024-25 budget of ₹7,468.25 crore. In the same month, based on a report submitted by an independent committee chaired by former Chief Secretary Johny Joseph, the Maharashtra Cabinet had cleared the proposal to purchase RInfra’s 74% stake for nearly ₹4,000 crore.

“MMRDA is a valued partner of MMOPL. MMOPL has been serving the Mumbaikars for the past 10 years. During these 10 years, we have carried over 97 crore passengers, completed over 10 lakh trips, and each train will also complete one lakh kilometres. MMOPL has many firsts to its credit and we still have over 20 years left in our Concession Agreement,” said RInfra’s statement issued on Friday.