Moody’s Investors Service has upgraded Bharti Airtel’s rating to Baa3, withdrawing the company’s Ba1 corporate family rating. The development comes in the backdrop of strong continued operational metrics as well as stabilisation of the financial profile. The previously assigned Ba1 corporate family rating to Bharti which indicated substantial risk on repayment of credit offered to the company.
Moody’s has also changed the outlook for the company to stable from positive. Moreover, Moody’s expect that these improvements can be sustained given Bharti’s solid market position, rising profitability at its core Indian mobile business and prudent financial management.
As per the statement by the credit rating company, Airtel’s Baa3 rating considers the company’s position as one of the largest telecom service operators globally in terms of subscribers (491 million), its solid market position in India’s high-growth mobile market and its large spectrum holdings. Entities given Baa3 ratings are considered medium grade and are subject to moderate credit risk and the firm has an acceptable ability to repay short term obligations, it added.
The change of outlook to stable indicates that the company’s performance is expected to improve even after it invests in upcoming 5G auction, Moody’s said. Moody’s expects a further 15-20 per cent increase in Airtel’s consolidated adjusted earning before interest, tax, depreciation and amortisation (EBITDA) by the end of fiscal 2023, reflecting stable growth at its Indian and African operations, which are held through its 56 per cent owned subsidiary, Airtel Africa plc and contribute around 30 per cent of consolidated EBITDA.
