NEW DELHI: Bharti Airtel’s AGR dues may not be converted into equity just because the company has put up an application to that end, according to sources.
Airtel’s application to convert its Rs41,000-crore adjusted gross revenue (AGR) dues into equity will not be cleared automatically and will undergo detailed scrutiny, a senior government official said on Friday, signalling that the telecom department will evaluate each case on its own merits.
“The application does not mean it will be processed automatically. It needs to be evaluated and scrutinised before any final decision is made,” an official said, in what is seen as a significant clarification from the Department of Telecommunications (DoT).
The clarification follows company’s formal application seeking conversion of Airtel’s AGR dues – including interest – into equity under the 2021 telecom relief package. The move echoes a similar step taken earlier by Vodafone Idea, which resulted in the government acquiring a 49 per cent stake in the financially struggling telecom company.
If Airtel’s request is approved, the government is expected to gain a 2–4 per cent stake in the country’s second-largest telecom operator.
Vodafone Idea case
While Vodafone Idea had opted for equity conversion shortly after the relief measures were announced, Bharti Airtel had initially declined the offer.
However, amid intense 5G rollout investments, increasing market competition, and growing government presence in the sector, the telco has now reversed its position and is pressing for equal treatment under the reform framework.
The 2021 telecom relief package allows companies to defer payment of spectrum and AGR dues and opt for equity conversion of the interest component. A senior official confirmed that each application under the scheme is reviewed on a case-by-case basis.
Bharti Airtel, in contrast to Vodafone Idea, has maintained stronger financial health and has actively worked to reduce its debt. Last month, the company prepaid Rs5,985 crore in high-cost spectrum liabilities from the 2024 auctions, cutting its spectrum-related debt to around Rs52,000 crore and bringing down the average cost of borrowing to 7.22 per cent.
The DoT’s stance underscores the government’s intent to evaluate telecom sector relief measures carefully, especially in the case of financially stable players seeking parity.
