Bharti Airtel Limited has disclosed receiving a penalty notice from the Department of Telecommunications (DoT) for alleged violations of subscriber verification norms. The company made this disclosure under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, on January 12, 2026.

Penalty Details

The Department of Telecommunications, Uttar Pradesh (East) LSA has imposed a penalty of ₹1.20 lakh on the telecom operator. The penalty notice was received by the company on January 12, 2026 at 17:35 hours IST.

Nature of Violation

The penalty relates to alleged violations discovered during a Customer Application Form (CAF) audit conducted by DoT for September 2025. Under the terms of the License Agreement, Bharti Airtel is required to ensure adequate verification of customers before enrolling them as subscribers and comply with instructions issued by DoT in this regard.

DoT conducts periodic CAF audits to confirm compliance with licensing terms and conditions related to subscriber verification. The September 2025 sample audit allegedly found violations of terms and conditions with respect to subscriber verification norms under the License Agreement.

Company's Response

Bharti Airtel has decided not to contest the penalty and will proceed with payment. The company has assessed that the maximum financial impact is limited to the extent of the penalty levied, which amounts to ₹1.20 lakh.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 read with Clause 20 of Para A of Part A of Schedule III of SEBI Listing Regulations. The company has declared that the information provided is true, correct and complete to the best of their knowledge and belief, in compliance with Regulation 30(13) of SEBI Listing Regulations.

The penalty represents a regulatory compliance matter with minimal financial impact on the telecom operator's overall operations. Such CAF audits are routine regulatory exercises conducted by DoT to ensure telecom operators maintain proper subscriber verification standards.

Jefferies has identified Jio's planned mega IPO in the first half of 2026 as a crucial re-rating catalyst for Bharti Airtel , raising its target price to ₹2,760 and maintaining the stock as its top pick in the Indian telecom sector. The global brokerage argues that the upcoming listing will drive tariff hikes and increase sector weight in indices, working in Bharti's favour rather than against it.

Target Price Revisions and Market Impact

The brokerage has made significant upward revisions to its target prices for key telecom stocks:

Billionaire Mukesh Ambani had guided to listing Jio Platforms Ltd in the first half of 2026, which analysts expect to be largely an offer for sale by financial investors while strategic shareholders like Reliance, Meta, and Google remain invested.

Jio IPO as Tariff Hike Catalyst

Jefferies argues that once Jio is listed, public market scrutiny will sharpen the operator's focus on monetisation and returns, making fresh mobile tariff hikes in 2026 more likely. According to the brokerage's sensitivity analysis, a 10-20% tariff increase is needed for Jio's equity valuation to move closer to Bharti's and deliver double-digit internal rate of return to existing private equity investors.

Why Bharti May Re-rate Alongside Jio

Jefferies expects Jio's IPO to benefit rather than create an overhang for Bharti Airtel, citing the stock's 32% gain in 2025 despite more than $5.00 billion of promoter share sales. With Bharti's India business already trading around 13 times EV/EBITDA, the brokerage expects Jio to be priced off Bharti's multiples, leaving limited room for de-rating.

Once Jio is included in major benchmarks with roughly 33% free float, the neutral weight of telecom in headline indices such as Nifty50 and MSCI India could rise from 4-5% to 7-8%. This increased sector allocation is expected to benefit Bharti along with Jio through incremental passive and benchmark-driven flows.

Financial Projections and Growth Outlook

Jefferies expects strong financial performance from Bharti Airtel in the coming years:

On a three-year view, the brokerage builds in about 25% cumulative mobile tariff hikes over FY27-28, translating into roughly 16% ARPU CAGR between FY26 and FY28. Additional growth optionality from enterprise, data centre and cloud services could add 1-3 percentage points of incremental growth annually over the next five years.

Sector Backdrop and Competitive Dynamics

Jefferies expects a 15% across-the-board mobile tariff hike in June 2026, two years after the last round, as operators pivot from market share grabs to monetisation. The brokerage sees scope for sector revenues to accelerate to 16% year-on-year growth, powered by ARPU expansion of about 14%.

Regarding Vodafone Idea, a potential five-year moratorium on AGR dues could cut the operator's government-dues outflows by 35-85% over FY26-30, improving its capital raising prospects. However, VIL would still need a cumulative 45% tariff hike over FY27-30 just to meet spectrum and AGR commitments, reinforcing the case for industry-wide pricing increases.