Tata Sons Ltd, the holding company of the $150 billion Tata group, may be forced to infuse fresh capital into its loss-making telecom arm, Tata Teleservices Ltd (TTSL).
This is because TTSL has to pay Rs 19,256 crore adjusted gross revenue (AGR) along with other dues to the central government by March 2026.
With a negative net worth of Rs 17,876 crore and steep accumulated losses, TTSL is in no position to meet its obligations without support.
Tata Sons has issued a letter of comfort to back the payment, according to people familiar with the matter.
The Supreme Court on Monday had dismissed the petitions moved by Vodafone Idea (Vi), Bharti Airtel, and TTSL seeking a waiver on their long-standing AGR dues, calling their pleas “misconceived.”
The telcos were looking for relief related to payment of interest, penalty, and interest on penalty components of the AGR.
The Court, however, has opened the doors for relief to be provided by the government to the telecom operators.
CARE Ratings, in a note in June last year, flagged the risk of AGR-related liabilities following the expiry of a four-year moratorium in March 2026 for the Tata company.
TTSL had opted for the department of telecom’s (DoT’s) relief package in October 2021, which allowed deferred payment of AGR dues.
The rating firm said until June 2019, Tata Sons had infused Rs 46,595 crore into TTSL and continues to issue a support letter to the company.
This is a clear indication that it will take necessary financial actions to organise for any shortfall in liquidity during the period of 12 months from the balance sheet date (last financial year).
As of March 31, 2024, the company had recognised the full liability, including accrued interest, under borrowings as deferred payment obligations, said Care.
The dues stood at Rs 17,830 crore — Rs 3,367 crore under Tata Teleservices Maharashtra Ltd (TTML) and Rs 14,463 crore under TTSL — as of March last year, the rating agency said.
This has increased to Rs 19,256 crore as on March 2025 (see chart).
The development underscores the persistent financial strain in India’s telecom sector, even as reforms offer temporary breathing room.
According to TTSL annual report for 2024-25 (FY25), the company made a net loss of Rs 994 crore from revenues of Rs 3,626 crore.
After TTSL sold its wireless telephony business to Bharti Airtel, Tata Sons paid all the bank loans of the telecom company and bought back its former equity partner NTT Docomo’s stake.
The company has retained earnings of a negative Rs 84,655 crore on a consolidated basis in FY25.
© 2025