Bharti Airtel plans ₹40,000 crore AGR dues-to-equity swap, possibly raising govt stake to 4% and reducing debt ahead of September payments
Through the Department of Telecommunications (DoT), Bharti Airtel seeks authority to transform its adjusted gross revenue (AGR) dues worth ₹40,000 crore into company shares. Bharti Airtel aims to implement the provisions outlined in the 2021 telecom reforms package. Vodafone Idea completed its spectrum and interest dues equity conversion, which transformed the government into the dominant shareholder of that telecom company.
The stock price of Bharti Airtel closed at ₹1,845.60 on the National Stock Exchange on Thursday. According to the market value of ₹1,845.60 per share, the proposed equity conversion would result in a 3-4% stake in the telecom company for the government. According to analysts, the bullish performance of Bharti stock demonstrates an opportunity for the government to sell this equity stake in the open market.
Debt Reduction and Expansion Strategy Aligned With Upcoming Payments
The 2021 telecom reforms provided operators with four years of payment leniency regarding AGR and spectrum-based statutory obligations. During this special four-year period, members could choose either equity swap payments for interest accumulation or interest payment deferral. The two options for relief included a moratorium and an equity swap, which Vodafone Idea selected, while Bharti Airtel chose a moratorium alone.
Bharti Airtel aims to reduce its remaining debts before September 2025, as the moratorium period is soon to expire. The equity swap option will enable Bharti to reduce its debt burden and lower interest costs, thereby creating better opportunities for network expansion investments.
In March 2025, Bharti Airtel paid ₹5,985 crore to the government, settling its outstanding payments from the 2024 spectrum auction. Following this recent payment, Bharti Airtel’s remaining spectrum debt of ₹52,000 crore comprises dues from both the 2021 and 2022 auctions. From the beginning to the present day, the company has paid spectrum-related liabilities totalling ₹66,665 crore.
High Interest Payments Avoided Through Early Repayments
Internet records indicate that Bharti paid an average rate of 9.74% for prepayments, although some older liabilities were subject to rates higher than 10%. Bharti Airtel expedited its debt payments by up to seven years, preventing it from incurring more than ₹1.16 lakh crore in future obligations.
The Department of Telecommunications evaluates each equity conversion proposal separately. According to market observers, Bharti’s call for equity conversion aligns with the 2021 telecom reforms, as those reforms encompass the entire sector. If approved, the conversion will benefit Bharti’s financial statements and enable continued growth in the competitive telecom market.
