Airtel in talks with govt on AGR dues-to-equity conversion: Gopal Vittal

Bharti Airtel MD Gopal Vittal says telco in talks with govt on converting Rs 40,000 crore AGR dues into equity, seeks parity with peers, and will abide by final decision

Bharti Airtel was still in talks with the Centre to convert its adjusted gross revenue (AGR) dues into equity, the company has told exchanges, even as it said that the telecom operator was prepared to meet the payment obligations arising out of it.

 

“We have written to the government to be extended the same relief as any other telco, and that is a decision that the government has to take. We will abide by whatever decision they take,” Gopal Vittal, vice chairman and managing director of the Sunil Mittal-promoted telecom services provider, said in the earnings call for the first quarter of the financial year 2026 (Q1FY26).

 

 

The firm has exhausted legal options to challenge the AGR dues as the Supreme Court had in February this year rejected its petition seeking relief. Now the ball is in the central government’s court.

 

The number two telcom firm had asked the department of telecommunications to convert its AGR dues of nearly

 

₹40,000 crore into equity, on the same lines as debt-ridden Vodafone Idea.

 

The AGR payments to the government on an annual basis will begin from March 2026.

 

Vittal, however, added that Airtel was prepared to meet its payment obligations.

 

“To that extent, we have the room to make whatever payments are required on the overall strength of the balance sheet, because the debt position is getting better, and there is a lot of free cash that will get generated over time,” he said. Airtel’s free cash flow stood at ₹11,928 crore as of June end.

 

The topmost executive added that the company will raise dividends, and look for growing its cloud, security and data centres businesses, as its leverage goes down. 

 

Airtel’s debt stood at ₹1.9 trillion in Q1FY26, higher than ₹1.87 trillion in the previous quarter. However, net debt to Ebitda ratio improved to 1.7 in the June 2025 quarter from 2.54 in the June 2024 quarter, showcasing improved financial health.

 

On opportunities to monetise its assets, senior executive said that public listings of Airtel Payments Bank and Airtel Money were already in the works, the company could look at listing its data centre business Nxtra while also liquidating its 28 per cent stake in telcos of Bangladesh and 11 per cent in Dialogue, Sri Lanka, over the next three to four years.

 

However, Harjeet Kohli, joint MD, Bharti Enterprises clarified that while decisions to take Airtel Money and Airtel Payments Bank public had already been taken, there was no mandate or compulsion to list Nxtra data center business.

 

“Our intent continues to be owning all of these businesses, but for the stakes in South Asia,” he said.

 

Vittal also reiterated the demand for repair in the tariff structures where higher usage could merit higher tariffs as opposed to the current plans that were giving large data and voice allowances at prices that were amongst the lowest in the world. This would also flow towards higher ARPUs and better financial sustainability for the carriers.

 

“The real issue is that people who can afford to pay are paying less, while the poor don’t need to be charged more,” he added.