Moody’s upgrades Airtel rating to investment grade

Moody’s Investors Service has upgraded Bharti Airtel by assigning a Baa3 issuer rating, on the back of the Sunil Mittal-led telco’s stronger operational metrics and stable financial profile.

Industry experts said the ratings upgrade is significant as it makes “Airtel an investment-grade company,” noting that a Baa3 is the lowest investment grade and the same as an India sovereign rating.

Moody’s has also changed the outlook on Airtel’s ratings to “stable” from positive.

“The rating upgrade reflects the continued strengthening of Bharti’s operational metrics as well as the stabilisation of its financial profile, including lower leverage levels and improving profitability,” Annalisa Di Chiara, a Moody’s Senior Vice President, said in an official statement Thursday.

She added that Moody’s expects “these improvements can be sustained, given Bharti’s solid market position, rising profitability at its core Indian mobile business and prudent financial management”.

Bharti Airtel shares were up 0.81 % at Rs 693.90 in Thursday afternoon trade on the BSE.

The ratings upgrade by Moody’s comes just a little over a week after beat estimates with an almost 164% on-year increase in consolidated net profit for the fiscal fourth quarter, driven by sharp tariff hikes taken by its India mobile business last November, which helped boost average revenue per user (ARPU), strong user additions, and one-time gains.

Further, the global ratings agency has withdrawn Airtel’s Ba1 corporate family rating (CFR) and has also upgraded to Baa3 from Ba1, the senior unsecured debt rating on the bonds issued by Bharti as well as on the backed senior unsecured notes issued by its Dutch arm —

International (Netherlands) B.V.

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