| Bharti Telecom Limited | ||||||||||||||
| 'CRISIL AA+/Positive' assigned to Non Convertible Debentures | ||||||||||||||
| Rating Action | ||||||||||||||
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| 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 assigned its ‘CRISIL AA+/Positive’ rating to Rs 12000 crore non convertible debentures of Bharti Telecom Ltd (BTL) and reaffirmed its ‘CRISIL AA+/Positive/CRISIL A1+’ ratings on the existing debt instruments.
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 39.13% stake as on September 30, 2024. Post utilisation of the recently raised CP proceeds, the debt shall approximately be around Rs 27,000 crore. The proposed debt issuance of upto Rs.12,000 crore will be utilised towards strategic investments. Following this issuance and utilisation of CP proceeds, the resulting total debt shall be approximately Rs 38,000 crore and the debt coverage will continue to be healthy.
Despite incremental debt, the financial risk profile is expected to remain comfortable, considering the healthy debt cover. CRISIL Ratings expects the cashflows of BTL to continue to be comfortable for debt servicing and the same remains monitorable going forward.
CRISIL Ratings notes that BTL revised its borrowing limits in October 2024. Going forward, any further material increase in the debt level of BTL, and/or higher-than-expected market volatility, thus impacting the market cover, will remain key monitorable. |
Analytical Approach CRISIL Ratings has followed the holding company approach to analyse the credit risk profile of BTL. The 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 3.76 lakh crore as on October 21, 2024. BTL is the largest shareholder of BAL with 39.13% stake as on September 30, 2024. BAL has healthy business and financial risk profiles, supported by its strong market position in the Indian 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.
Post utilisation of the recently raised CP proceeds, the debt shall approximately be around Rs 27,000 crore in BTL. The proposed debt issuance of upto Rs.12,000 crore will be utilised towards strategic investments. Following this issuance and utilisation of CP proceeds, the resulting total debt in BTL shall be approximately Rs 38,000 crore. There is no long-term debt at BEL and BEHPL as on date. CRISIL Ratings expects the company 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 is valued over Rs 3.76 lakh crore as on October 21, 2024. 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
Downward Factors
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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.
Its retail portfolio includes high speed 4G/5G mobile broadband, Airtel Xstream Fiber with convergence across linear and on-demand entertainment, streaming services spanning music and video, digital payments and financial services. For enterprise customers, Airtel offers a gamut of solutions that include secure connectivity, cloud and data centre services, cyber security, internet of things, ad tech and cloud-based communication.
As on March 31, 2024, the company had 40.6 crore mobile subscribers in India and around 15 crore subscribers in Africa. |
Key Financial Indicators(standalone)
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
#Yet to be issued |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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