Corporate Grapevine     

Published: September 30, 2024
Updated: September 30, 2024

Tatas face ‘tele-pain’ of Rs 22,000 crore

While Tata Consultancy Services (TCS) continues to be a profitable asset for the Tata group, Tata Teleservices is struggling with substantial losses. In its annual report for the financial year ending March 2024.

the group highlighted ongoing litigation between Tata Teleservices-Tata Tele Maharashtra and the Department of Telecom, regarding the definitions of gross revenue and adjusted gross revenue (AGR).

The report revealed that TTSL and TTML collectively paid Rs 4,197.37 crore during financial year 2019-20. As of October 17, 2023, the liabilities related to AGR had risen to Rs 22,218 crore, up from Rs 20,878 crore the previous year. Consequently, the company recognized a provision of Rs 1,340 crore for the year ending March 31, 2024, increasing the total provision to Rs 22,218 crore.

So, this basically means that, after the latest Supreme Court verdict that rejected all curative petitions, Tata Sons will end up paying another Rs 22,218 crore to the Indian government.

Tata Sons already has Rs 60,000 crore of Tata Tele bank loans, and bought back Japanese partner Docomo’s stake in the company for $1.5 billion. This new, additional burden means that the Tatas have lost close to Rs 1 trillion in their telecom business.