Rated to resonate: S&P lifts Bharti Airtel to BBB on the back of a billing boom

Updated: November 18, 2025 05:32

Image Source: Zee Business

S&P Global Ratings upgraded Bharti Airtel’s long-term issuer rating to BBB from BBB-, with a positive outlook, citing robust earnings momentum, rising ARPU, and continued deleveraging. Growth is expected from Indian operations, subscriber additions, and tariff-driven ARPU gains, positioning Airtel for stronger cash flows and potential further upgrades over 24 months.

Why the upgrade matters

S&P’s move reflects confidence in Airtel’s earnings trajectory and balance-sheet discipline, signaling lower credit risk and potentially cheaper access to capital. A positive outlook indicates room for an additional upgrade if deleveraging stays on track and operating metrics beat expectations, independent of constraints from India’s sovereign rating.

Key highlights

Rating raised and outlook:

Long-term issuer credit rating lifted to BBB from BBB-; senior unsecured debt also upgraded to BBB, with perpetual securities to BB+; positive outlook for 24 months based on sustained earnings and deleveraging.

ARPU and subscriber growth:

S&P sees subscribers rising 2–4% and ARPU growing 6–8%, driven by upgrades to higher-priced plans and increased data consumption; tariff hikes in July 2024 underpin faster ARPU acceleration in India.

India-led earnings momentum:

Stronger performance in Indian mobile and home broadband segments expected to propel consolidated EBITDA and cash flow, enhancing FFO-to-debt metrics over FY26–FY27.

Shareholder returns scaling:

Dividends projected to rise to about ₹12,000 crore in FY26 and nearly ₹24,000 crore in FY27, aligned with earnings growth and deleveraging comfort.

Leverage trajectory:

S&P projects FFO-to-debt improving toward 37–40% in FY26 and exceeding 45% in FY27, supported by a 23–25% jump in consolidated adjusted EBITDA and moderated capex intensity.

Risk checks:

Watch items include sector competition, spectrum-related liabilities, and execution on 5G monetization; however, S&P notes ratings are not constrained by India’s sovereign rating (BBB/Stable/A-3) under current assumptions.

What it means for markets and customers

A stronger rating can lower financing costs, supporting network investments and customer experience—especially in 5G, fiber, and enterprise services. For investors, the positive outlook signals confidence in Airtel’s cash-generation flywheel: ARPU uplift, disciplined capex, and a rising dividend runway if operating momentum persists.

Sources: Mint, Business Standard, FilingReader

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