Bharti Airtel Ltd. shares traded lower during early trade on Tuesday after the company outlined major plans for its non-banking financial company, Airtel Money Ltd., that will be capitalised with Rs 20,000 crore over the next few years. The subsidiary received its NBFC license from the Reserve Bank of India on Feb. 12.
The parent plans to inject Rs 20,000 crore over the next few years into the NBFC, with Bharti Airtel and its promoter group (via Bharti Enterprises) contributing 70% and 30% respectively. Airtel had launched lending in the form of Airtel Finance in 2024 with partnership from banks and NBFCs.
With strong digital assets, a large data and analytics engine powered by 500 plus data scientists, and deep operational expertise, Airtel said it aims to rapidly expand access to simple, secure, and innovative digital financial services across India. The company has built a credit engine over the last two years, powered by its digital platform and deeply integrated channels, "resulting in one of India's strongest lending service provider (LSP) models".
The platform has already achieved hyperscale adoption with over Rs 9,000 crore in disbursements - supported by delinquency outcomes, driven by robust underwriting models, disciplined portfolio management, and real-time risk monitoring.
Analysts at Morgan Stanley said the NBFC announcement is part of efforts to diversify the telecom major further into financial services. The NBFC would be a more capital intensive business and different from running a digital platform where Bharti Airtel acts as a distributor. "We note that the group has been prudent in their digital allocation plan in the last several years and even though current investments in the NBFC will increase overall capex intensity, it will also build additional revenue streams with potential value creation in the NBFC business," analysts said in a note.
Bharti Airtel share price fell over 2% tp Rs 1,955 on the NSE, compared to a 0.5% decline in the benchmark Nifty 50. The stock is up 23% on a 12-month basis.
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