Tata Sons, the holding company of $150-billion Tata Group, infused an additional Rs 5,166 crore into loss-making telecom subsidiary Tata Teleservices during FY26, thus increasing its stake in the unlisted company to 94.3% and helping the company pay government dues.
The capital infusion highlights the continued support being extended by the Tata Group’s holding company to some of its loss-making businesses. Along with Air India and Tata Digital, Tata Teleservices is to be discussed at the Tata Sons board meeting scheduled for June 12. The Tata Sons board is also slated to consider the group’s annual accounts and dividend payout to its shareholders, say group sources.
Tata reviews revival plans
When contacted, a Tata Sons spokesperson said, “The first instalment of AGR liabilities was due in March 2026, and the money has been infused to pay” it. In the previous board meeting in May, Air India, Tata Digital and Tata Electronics managements made presentations to the Tata Sons board on their revival plans. While Air India and Tata Digital are expected to make losses for the next three years, Tata Electronics is projected to make a marginal profit, thanks to government subsidies on semiconductors.
Tata Teleservices, which offers voice, data and managed services to enterprises and carriers under the Tata Tele Business Services (TTBS) brand, reported a net loss of Rs 1,907 crore in FY26 on total income of Rs 2,322 crore on standalone basis, as per company filings. The company was originally set up to provide nationwide wireless telecom services in the 1990s, but transferred its wireless business to Bharti Airtel in 2019 after years of losses. At a consolidated level, Tata Tele reported a total income of Rs 3,641 crore and a loss of Rs 1,482 crore.
In the past, Tata Sons not only repaid all Tata Tele’s loans but even bought back its partner Docomo stake in the company for $1.18 billion in 2017 as part of an earlier agreement. Tata Sons made the latest investment in Tata Teleservices through a preferential allotment of shares at a face value of Rs 10 apiece during the last week of March. With the fund infusion in place, Tata Teleservices paid the first instalment of Rs 3,517 crore by March 31, 2026 to the government as part of its six instalments for AGR dues.
AGR provision hits FY26 earnings
The company’s FY26 earnings were impacted by an exceptional charge of Rs 666.69 crore after the Department of Telecommunications communicated its final assessment of adjusted gross revenue (AGR) liabilities up to FY19. The provision was made following a reassessment of licence fee and spectrum usage charge dues to align the carrying value of liabilities with the revised calculations.
Tata Teleservices and its listed subsidiary, Tata Teleservices (Maharashtra), had earlier opted for the government’s four-year moratorium on AGR dues but chose not to convert the accrued interest into equity even as its rival Vodafone Idea offered a stake to the government in lieu of AGR dues. The Supreme Court later rejected petitions seeking a revision in AGR calculations, leaving its dues at Rs 16,798 crore. The company will pay the rest in instalments in the next five years. In a silver lining to its annual finances, the company, however, improved its Ebitda (earnings before interest, tax, depreciation and amortisation) by 17% on-year, leading to an increase in absolute Ebitda to `876.87 crore in FY26, compared with Rs 746.95 crore in FY25.
