ICRA Limited has revised the long-term ratings of Bharti Airtel Ltd from [ICRA]AA to [ICRA]AA-.
The short-term rating has been reaffirmed at [ICRA]A1+. The ratings continue to remain under watch with negative implications.
The revision in the long-term rating factors in the recognition of higher than anticipated provision pertaining to the Supreme Court judgement on dues payable towards license fees on adjusted gross revenues (AGR) as well as spectrum usage charge in the latest quarterly results. Although the company has not tied up funds for the same, this liability, if materialises is expected to be funded through a bridge loan, which would result in deterioration in debt coverage metrics in near term. This provisioning follows the communication from Department on Telecom (DoT) that mandated the operators to pay the license fee and other dues after carrying out their own assessment within timeline stipulated by the Supreme Court. Moreover, additional provisioning related to indemnities to be paid to certain investors of Airtel Africa is also a credit negative. However, ICRA notes that the Government of India has appointed a Committee of Secretaries to examine the situation and come out with recommendations for the sector. As an interim relief, the government has announced deferment of auction instalments for FY2021 and FY2022, which is expected to provide cash flow easing to the tune of Rs. 5500 crore per year for the next two years. Additionally, the company has also filed a review petition with Supreme Court. These apart, the telcos have announced tariff hikes w.e.f. December 01, 2019 that would allow OPBITDA expansion. The outcome of these events is expected to resolve the rating watch.
Shares of BHARTI AIRTEL LTD. was last trading in BSE at Rs.451.3 as compared to the previous close of Rs. 421. The total number of shares traded during the day was 1321743 in over 16686 trades.
The stock hit an intraday high of Rs. 455.65 and intraday low of 421. The net turnover during the day was Rs. 584390260.