Rating Rationale
February 17, 2025 | Mumbai
Bharti Telecom Limited
Ratings reaffirmed at 'Crisil AA+/Positive/Crisil A1+'; Rated amount enhanced for Commercial Paper
 
Rating Action
Rs.2500 Crore Non Convertible DebenturesCrisil AA+/Positive (Reaffirmed)
Rs.4250 Crore Non Convertible DebenturesCrisil AA+/Positive (Reaffirmed)
Rs.12000 Crore Non Convertible DebenturesCrisil AA+/Positive (Reaffirmed)
Rs.8000 Crore Non Convertible DebenturesCrisil AA+/Positive (Reaffirmed)
Rs.25000 Crore (Enhanced from Rs.15000 Crore) Commercial PaperCrisil A1+ (Reaffirmed)
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale
Crisil Ratings has reaffirmed its ‘Crisil AA+/Positive/Crisil A1+’ ratings on the non convertible debentures and commercial paper of Bharti Telecom Ltd (BTL).

 

The ratings continue to factor in the healthy market value to debt cover of the company and its robust financial flexibility, driven by the strong reputation of its promoters, the Bharti group (shareholding through Bharti Enterprises Holding Pvt Ltd [BEHPL]) and Singapore Telecommunications Ltd (Singtel; rated 'A/Stable/A-1' by S&P Global Ratings). These strengths are partially offset by exposure to market risk.

 

BTL is a key holding company of Bharti Airtel Ltd (BAL; ‘Crisil AA+/Positive/Crisil A1+’) with 40.3% stake as on December 30, 2024 (increased from 39.13% stake as on September 30, 2024).

 

While the rated limits for the commercial paper have increased, Crisil Ratings notes that overall debt will remain within the existing borrowing limit which was last revised in October 2024. Outstanding debt in BTL as on December 31, 2024, was ~Rs 38,000 crore. The proposed CPs will be utilised towards strategic investments along with refinancing.

 

Despite incremental debt, the financial risk profile is expected to remain comfortable, considering the healthy debt cover. Crisil Ratings expects the cash flow of BTL to remain comfortable for debt servicing and will be closely monitored going forward. Going forward, any further material increases in the debt level of BTL, and/or higher-than-expected market volatility, thus impacting the market cover, will remain monitorable.

Analytical Approach

Crisil Ratings has followed the holding company approach to analyse the credit risk profile of BTL. Net debts of BTL, BEHPL and Bharti Enterprises Ltd (BEL; ‘Crisil AA/Positive/Crisil A1+’) have been combined to arrive at the market value to debt cover.

Key Rating Drivers & Detailed Description

Strengths:

  • Strong market value to debt cover: The direct holding of BTL in BAL was worth Rs 3.92 lakh crore as on February 13, 2025. BTL is the largest shareholder of BAL, with 40.13% stake as on December 31, 2024. BAL has healthy business and financial risk profiles, supported by its strong market position in the Indian telecommunication (telecom) industry and its diversified operations in non-mobile segments in India and mobility and other businesses in Africa. The company’s shareholding in BAL is entirely unencumbered.

 

The outstanding total debt in BTL was ~Rs 38,000 crore as on December 31, 2024; however, there was no long-term debt at BEL and BEHPL as on date. Crisil Ratings expects BTL to maintain its financial flexibility and strong cover through the tenure of the rated debt.

 

  • Robust financial flexibility: The financial flexibility is strong, driven by the healthy reputation of the promoters and the sizeable investment in BAL. The Bharti group has an established management track record, while Singtel is a Singapore-based telecom company with over 770 million mobile customers across 21 countries as on March 31, 2024.

 

Weakness:

  • Exposure to market risk: Financial flexibility, in terms of cover available, depends on the prevailing market sentiment and share price of BAL. Increase in systemic risk or sharp decline in the share price of BAL are rating sensitivity factors.

Liquidity: Strong

BTL received a dividend of around Rs 1,800 crore in the first half of fiscal 2025. BTL, being a holding company, will continue to depend on dividend income, monetisation of investments, infusion of funds by promoters or debt refinancing. The company also has strong access to capital markets. It enjoys healthy financial flexibility because of its shareholding in BAL, which was valued over Rs 3.92 lakh crore as on February 13, 2025. BTL also benefits from its strong promoters, the Bharti group and Singtel.

Outlook: Positive

BTL will continue to benefit from the strong financial flexibility it derives from its holding in BAL and its robust debt coverage.

Rating sensitivity factors

Upward factors

  • Substantial and sustained expansion in debt cover either due to low debt or increase in market value along with upgrade in rating of BAL

 

Downward factors

  • Downgrade in the rating of BAL
  • Steep fall in the market capitalisation of BAL, leading to sustained decline in the debt cover of BTL

About the company

Jointly promoted by the Bharti group and Singtel, BTL is a key shareholder in BAL. BEHPL and the Singtel group hold 50.56% and 49.44%, respectively, in BTL.

 

About BEHPL

BEHPL, promoted by the Bharti Mittal family, is a key holding company of the Bharti group, which has interests in diverse businesses such as telecom and financial services.

 

About BEL

BEL, promoted by BEHPL, is a key holding company of the Bharti group with interests in diverse businesses.

 

About BAL

Headquartered in India, BAL is a global communications solutions provider. It had nearly 56 crore customers across 17 countries in South Asia and Africa as on March 31, 2024. The company ranks among the top three mobile operators globally and its networks cover over 2 billion people. Airtel is the largest integrated communications solutions provider in India and the second-largest mobile operator in Africa.

Key financials (Standalone)

As on/for the period ended March 31

Unit 

2024

2023

Revenue

Rs.Crore

884.5

609.7

Profit After Tax (PAT)

Rs.Crore

-916.5

-304.5

PAT Margin

%

-103.6

-49.8

Adjusted debt/adjusted networth

Times

3.46

1.96

Interest coverage

Times

0.54

0.77

Any other information: Not Applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs.Crore) Complexity Levels Rating Outstanding with Outlook
NA Commercial Paper NA NA 7 to 365 Days 25000.00 Simple Crisil A1+
INE403D08132 Non Convertible Debentures 21-Nov-22 8.80 21-Nov-25 2500.00 Simple Crisil AA+/Positive
INE403D08157 Non Convertible Debentures 05-Dec-22 8.70 05-Dec-25 3200.00 Simple Crisil AA+/Positive
INE403D08165 Non Convertible Debentures 12-Dec-22 8.60 12-Dec-25 1050.00 Simple Crisil AA+/Positive
INE403D08207 Non Convertible Debentures 04-Dec-23 8.95 04-Dec-26 3000.00 Simple Crisil AA+/Positive
INE403D08199 Non Convertible Debentures 04-Dec-23 9.00 04-Dec-28 2000.00 Simple Crisil AA+/Positive
INE403D08181 Non Convertible Debentures 04-Dec-23 8.90 04-Dec-25 3000.00 Simple Crisil AA+/Positive
INE403D08223 Non Convertible Debentures 05-Nov-24 8.25 15-Nov-27 2000.00 Simple Crisil AA+/Positive
INE403D08264 Non Convertible Debentures 05-Nov-24 8.75 05-Nov-29 2500.00 Simple Crisil AA+/Positive
INE403D08249 Non Convertible Debentures 05-Nov-24 8.90 05-Nov-31 1500.00 Simple Crisil AA+/Positive
INE403D08231 Non Convertible Debentures 05-Nov-24 8.65 05-Nov-27 2000.00 Simple Crisil AA+/Positive
INE403D08215 Non Convertible Debentures 05-Nov-24 8.90 05-Nov-34 1500.00 Simple Crisil AA+/Positive
INE403D08256 Non Convertible Debentures 05-Nov-24 8.75 05-Nov-28 1650.00 Simple Crisil AA+/Positive
NA Non Convertible Debentures# NA NA NA 850.00 Simple Crisil AA+/Positive

#Yet to be issued

Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT   --   --   --   --   -- Withdrawn
Commercial Paper ST 25000.0 Crisil A1+ 04-02-25 Crisil A1+ 28-10-24 Crisil A1+ 27-11-23 Crisil A1+ 06-12-22 Crisil A1+ Crisil A1+
      --   -- 16-10-24 Crisil A1+ 24-07-23 Crisil A1+ 30-11-22 Crisil A1+ --
      --   -- 22-07-24 Crisil A1+   -- 14-11-22 Crisil A1+ --
      --   -- 11-04-24 Crisil A1+   -- 26-09-22 Crisil A1+ --
      --   --   --   -- 12-09-22 Crisil A1+ --
      --   --   --   -- 22-08-22 Crisil A1+ --
      --   --   --   -- 05-07-22 Crisil A1+ --
Non Convertible Debentures LT 26750.0 Crisil AA+/Positive 04-02-25 Crisil AA+/Positive 28-10-24 Crisil AA+/Positive 27-11-23 Crisil AA+/Stable 06-12-22 Crisil AA+/Stable Crisil AA+/Stable
      --   -- 16-10-24 Crisil AA+/Positive 24-07-23 Crisil AA+/Stable 30-11-22 Crisil AA+/Stable --
      --   -- 22-07-24 Crisil AA+/Positive   -- 14-11-22 Crisil AA+/Stable --
      --   -- 11-04-24 Crisil AA+/Stable   -- 26-09-22 Crisil AA+/Stable --
      --   --   --   -- 12-09-22 Crisil AA+/Stable --
      --   --   --   -- 22-08-22 Crisil AA+/Stable --
      --   --   --   -- 05-07-22 Crisil AA+/Stable --
All amounts are in Rs.Cr.
Criteria Details
Links to related criteria
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for holding companies

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