Telecom giant Bharti Airtel has taken significant steps to enhance its financial stability by prepaying a substantial amount to the Department of Telecom. On Wednesday, the company and its subsidiary Bharti Hexacom Ltd made headlines by clearing Rs 5,985 crore in high-cost interest liabilities, fully addressing obligations related to the 2024 auctions. Additionally, Airtel’s subsidiary Network i2i Ltd has made a noteworthy move by redeeming $1 billion in perpetual notes, as stated in their recent regulatory filing.

Comprehensive Prepayment Strategy

With this latest payment, Airtel has now successfully prepaid a total of Rs 25,981 crore in high-cost spectrum liabilities for FY25. Cumulatively, the telecom leader has reduced its spectrum liabilities by an impressive Rs 66,665 crore to date. This strategic financial maneuver reflects an average interest rate of about 9.74% across all liabilities that have been prepaid.

• Previous Interest Rates Cleared:
  • 10%
  • 9.75%
  • 9.3%

These prepayments are particularly noteworthy as they have been executed approximately seven years ahead of the average residual maturities, showcasing Airtel’s commitment to financial prudence and operational efficiency.

Enhanced Financial Health

The company’s proactive approach has allowed it to eliminate Rs 116,405 crore of scheduled installments that would have been due over the original terms of the liabilities. Following these payments, Airtel has managed to reduce its cost of debt on remaining spectrum liabilities to an average of around 7.22%. The residual spectrum liabilities, totaling Rs 52,000 crore, feature a long repayment timeline, with payments extending annually until FY 2042.

Impact of Perpetual Notes Redemption

In addition to the spectrum liabilities, Airtel’s recent redemption of $1 billion in perpetual notes has further strengthened its financial position. Post-redemption, the company now holds nearly $479 million in perpetual bonds, which were issued in FY21 and are set to mature in FY26.

Market Reaction

Despite these positive developments, shares of Bharti Airtel saw a slight decline of 0.04%, trading at Rs 1,733.00 as of 5:30 PM. This dip, while marginal, highlights the dynamic nature of the telecom market and investor sentiment.

As Airtel continues to execute its strategic financial plans, analysts are keenly observing how these moves will impact their overall market position and operational efficiency in the coming years.