| Tata Teleservices (Maharashtra) Limited | ||||||
| Ratings reaffirmed at 'Crisil AA- / Stable / Crisil A1+ ' | ||||||
| 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 reaffirmed its ‘Crisil AA-/Stable/Crisil A1+’ ratings on the bank facilities and commercial paper of Tata Teleservices (Maharashtra) Limited (TTML).
The reaffirmation factors in stable operating performance of the company. The standalone operating performance remained stable with revenue of Rs 1,309 crore and healthy operating margin of 43.9% in fiscal 2025 compared with Rs 1193 crore and 44.5%, respectively, in fiscal 2024.
The ratings also factor in continuation of strong support expected from the ultimate parent, Tata Sons Pvt Ltd (Tata Sons; 'Crisil AAA/Stable/Crisil A1+') to Tata Teleservices Limited (TTSL; ‘Crisil AA-/Stable/Crisil A1+’) and its associate, TTML, together referred to as Tata Tele. Any material deviation from this will be monitorable.
The financial risk profile remains constrained owing to sizeable debt of ~Rs 20,342 crore as on March 31, 2025, on account of large adjusted gross revenue (AGR) dues. This has led to weak debt protection metrics.
On October 14, 2021, the Department of Telecommunications (DoT) provided various options to telecommunication companies as per the reform package approved for the telecommunication (telecom) sector by the Union Cabinet (in September 2021). The options included a one-time opportunity to opt for deferment of AGR dues by four years with immediate effect; and a one-time opportunity to exercise the option of paying interest for the four years of deferment on the deferred AGR dues by way of conversion into equity of the net present value of the interest amount. On October 29, 2021, Tata Tele opted for the moratorium of AGR dues by four years. Hence, these AGR dues will be due in six annual installments of Rs 4,167 crore starting from March 2026.
The AGR liabilities of Tata Tele stood at Rs 19,256 crore as on March 31, 2025. Crisil Ratings understands that no further material AGR liabilities are likely on Tata Tele pertaining to its transactions with Bharti Airtel Ltd (BAL; ‘Crisil AAA/Stable/Crisil A1+’) and Bharti Hexacom Ltd (BHL; ‘Crisil A1+’).
Tata Sons is expected to provide timely financial support to Tata Tele during any shortfall in liquidity. This strength is partially offset by weak debt protection metrics.
Tata Tele, along with other telcos, had filed a curative petition drawing the Supreme Court’s attention to the fact that mathematical/calculation errors exist in the dues claimed by the DoT. Crisil Ratings notes that this petition was rejected by the Supreme Court in September 2024. However, Tata Tele had fully provided for these liabilities in its books. The company is pursuing other remedies for relief of AGR dues which will remain monitorable.
Further, the Supreme Court held that licence fee paid by telecom companies will be treated as capital expenditure and not revenue expenditure. This implies that licence fees paid by these companies will be a depreciable asset compared with being treated as an operating expense. The financial impact of the judgement will be monitorable. |
Analytical Approach Crisil Ratings has applied its parent notch-up criteria to factor in the extent of support expected from Tata Sons. The ratings are centrally based on parent support.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Expectation of continued strong support from Tata Sons: Tata Tele receives significant financial and managerial support from Tata Sons, which has infused Rs 23,090 crore since April 2018. While external debt (excluding AGR dues) remained elevated at Rs 11,596 crore as on March 31, 2025, Tata Sons will work with Tata Tele if the latter faces any shortfall in liquidity that may arise to meet its financial obligation and timely payments of debts.
Tata Sons, along with its affiliates, holds around 98% stake in TTSL and around 75% stake in TTML. Association with the Tata group also enables Tata Tele to leverage the parent’s brand to market products and services.
Stable business risk profile: The business risk profile was weak prior to the demerger of the consumer mobile business owing to intense competition in the mobility business. After the demerger, Tata Tele continues to operate in the enterprise business, which has shown stable operating performance and healthy operating margin. The consolidated revenue has shown steady growth while the operating margin has sustained at 30-35% in the past three fiscals. However, the ability to grow revenue while sustaining the operating margin amid intense competition, leading to better cash accrual, will remain monitorable. |
Key Rating Drivers - Weaknesses Weak capital structure and debt protection metrics: Despite fund infusion by the parent in the past, networth remained negative as on March 31, 2025 owing to high interest cost and accumulated losses. The debt protection metrics are also expected to remain modest over the medium term.
Exposure to regulatory and technological risks: Regulatory and policy changes have played a central role in defining the risk characteristics of the telecom sector in India. The sector is extremely dynamic structurally, and therefore, the risks pertaining to regulatory intervention will persist. For instance, the curative petition for seeking relief for the AGR dues was recently rejected by the Supreme Court. The telecom sector remains susceptible to technological changes too as new technologies could necessitate sizeable fresh investments or overhaul of the current networks. |
Liquidity Strong TTML had around Rs 91 crore of cash and equivalents as on August 31, 2025. Tata Sons has also provided a support letter to Tata Tele, stating its intent to take necessary actions to organise for any shortfall in liquidity to ensure timely debt servicing. High financial flexibility, arising from being a part of the Tata group, enables Tata Tele to raise additional resources.
Tata Sons will continue to support Tata Tele for its funding requirement or to bridge any shortfall towards its financial obligation arising out of regular business activity or any regulatory payout, if required. |
Outlook Stable Crisil Ratings believes Tata Sons will continue to offer need-based funding support to Tata Tele. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company Tata Tele became a pan-India telecom operator in January 2005. The company had a unified access (basic and cellular) service licence to operate in 19 circles and a national long-distance licence to provide services within India. Tata Tele completed the sale of its consumer mobile business to BAL and BHL with effect from July 1, 2019, following the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) order directing the DoT to take the merger on record; and approval of the schemes of arrangement by National Company Law Tribunal (NCLT), Delhi, and NCLT, Mumbai.
Consequently, all customers, assets, spectrum and agreed liabilities of Tata Tele have been merged with BAL. Post-merger, Tata Tele continues to operate the residual businesses such as enterprise business, fixed-line and broadband business.
Net loss was Rs 321 crore on operating revenue of Rs 286 crore during the three months ended September 30, 2025, as against Rs 330 crore and Rs 344 crore, respectively, during the corresponding period previous fiscal. |
Key financial indicators (TTML - standalone)
NM – Not meaningful because the reported figures are negative Note: These are Crisil Ratings-adjusted numbers |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
% - Sublimit of non-fund based limit includes Rs 1 Cr of fund based limit |
Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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