Tata Sons, the owner of Tata Group, is set to invest $122m (INR9.75bn) in Pune IT City Metro Rail in the Indian state of Maharashtra.

Pune IT City Metro Rail is a special purpose vehicle (SPV) that received a contract for the construction, operation, and maintenance of the project that will link Shivaji Nagar and Hinjewadi in Pune.

Tata Sons, through its subsidiary Tata Realty and Infrastructure (TRIL), is investing in the metro rail SPV.

TRIL intends to sell its newly commissioned roads, as well as ropeway projects to gather funds for the project and clear its debt.

Tata Sons has a 74% interest in the SPV, while the remaining stake is held by Siemens Project Ventures.

The 23km project is expected to entail an investment of around $934m (INR74.2bn).

It is being funded through a debt-to-equity of 1.8 times, with the equity commitment supported by Tata Sons, reported Business Standard citing a banking source.

The Pune metro rail is being developed by the Maharashtra and Central governments, with each having a 50% holding.

Last year in May, the European Investment Bank (EIB) reached a $182m finance contract with the Indian Government for the second portion of the Pune Metro Rail project.

In 2019, the EIB and the Indian Government struck a €200m agreement for the project’s first tranche, while in 2020 EIB agreed to provide nearly €600m for the project.