Tata Sons may infuse capital into Tata Tele as AGR dues cross Rs 19,000 cr

Tata Sons Ltd, the holding company of the $150 billion Tata Group, may be forced to inject fresh capital into its loss-making telecom arm, Tata Teleservices Ltd, as the unit stares at Rs 19,256 crore in adjusted gross revenue (AGR) and other dues owed to the Indian government.

With a negative net worth of Rs 17,876 crore and steep accumulated losses, Tata Teleservices 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.

Calling the plea of telecom operators “misconceived”, the Supreme Court on Monday dismissed the petitions moved by Vodafone Idea (Vi), Bharti Airtel, and Tata Teleservices seeking a waiver on their long-standing AGR dues. The telcos were seeking relief related to payment of interest, penalty, and interest on penalty components as part of their AGR. The SC, however, has opened the doors for any 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 group company. Tata Teleservices had opted into the Department of Telecommunications' telecom relief package in October 2021, which allowed deferred payment of AGR dues. The rating firm said that until June 2019, Tata Sons had infused Rs 46,595 crore in the Tata Tele Business Services (TTBS) and continued to issue a support letter to the company, indicating that it would take necessary financial actions to organise for any shortfall in liquidity during the period of 12 months from the balance sheet date.

As of 31 March 2024, the company had recognised the full liability, including accrued interest, under borrowings as deferred payment obligations. The dues stood at Rs 17,830 crore — Rs 3,367 crore under Tata Teleservices Maharashtra Ltd (TTML) and Rs 14,463 crore under Tata Teleservices Ltd (TTSL) as of March last year, the rating agency said. This has increased since then 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.

As per Tata Teleservices’ annual report for FY25, the company made a net loss of Rs 994 crore on revenues of Rs 3,626 crore. After Tata Tele sold its wireless telephony business to Bharti Airtel, Tata Sons paid all the bank loans of the telecom company and bought back the stake of its former equity partner NTT Docomo, thus maintaining its pristine track record of paying all dues.