Airtel Shares Hit Six-Month High On Prepaying Additional Rs 5,985 Crore Of High-Cost Spectrum Liabilities

Bharti Airtel Ltd. and its subsidiary Bharti Hexacom Ltd. have prepaid additional Rs 5,985 crore to the Department of Telecom on Wednesday. This indicates that the company has fully prepaid the high-cost interest liabilities of 8.65%, pertaining to the 2024 auctions.

Airtel in total has prepaid Rs 25,981 crore of high-cost spectrum liabilities for fiscal 2025 and has cumulatively prepaid spectrum liabilities of Rs 66,665 crore as of Wednesday.

The company had earlier prepaid liabilities that had an interest rate of 10%, 9.75% and 9.3%, according to the exchange filing on Wednesday. The company in the statement said that these payments have been made nearly seven years ahead of their average residual maturities.

Airtel in prepayments has cleared Rs 1.16 lakh crore of scheduled instalments, that would have otherwise been payable on their respective dates over the original tenure of the liabilities.

"Consequent to these payments, Airtel has also lowered its cost of debt on spectrum liabilities to an average of approximately 7.22% on the residual Rs 52,000 crores of spectrum liabilities (excluding AGR liabilities)," Airtel said in its statement. The residual spectrum liabilities carry a long repayment profile payable in annual instalments until financial year 2042.

Additionally, the telecom giant's subsidiary Network i2i has also voluntarily called and redeemed $1 billion in perpetual notes issued in financial year 2020. Post redemptions of the notes, Airtel has approximately $479 million of perpetual notes outstanding. These were issued during fiscal 2021 and can be called in financial year 2026.

Bharti Airtel Share Price Rise

Shares of Bharti Airtel rose as much as 1.99% to Rs 1,765 apiece, the highest level since Sept. 26. They pared gains to trade 0.42% lower at Rs 1,737.70 apiece, as of 2:55 p.m. This compares to a 0.84% decline in the NSE Nifty 50.

The stock has risen 43.03% in the last 12 months and 8.75% year-to-date. The relative strength index was at 65.

Out of 35 analysts tracking the company, 30 maintain a 'buy' rating, three recommend a 'hold' and two suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 7.5%.

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