Centre weighs impact as Airtel wants dues converted to equity

Bharti Airtel's proposal to convert ₹40,000 crore of its adjusted gross revenue (AGR) dues into government equity has been handed for evaluation to the department of investment and public asset management (DIPAM), according to two officials aware of the matter.

- Jatin Grover

The DIPAM, which is assessing the proposal, is weighing the implications of a potential approval, especially as Airtel has demonstrated strong financial performance and its stock, too, has been on a tear over the past five years, the first official cited above said on the condition of anonymity.

The second official said that the Centre is also weighing the broader implications of setting a precedent to other financially sound corporations—even beyond telecom—that they can convert dues into government equity.

Last month, the country's second-largest telecom operator by market share urged the Department of Telecommunications (DoT) to convert its AGR dues into equity, Mint had reported on 24 April, citing sources. The company is yet to officially confirm the same. The conversion, if it happens, would give the government around 3-4% stake in Airtel, Mint had reported on 24 April.

"One of the key things under discussion is whether it would be right to convert the dues at such a high valuation given Airtel's stock price has significantly surged in the last five years," the first official said.