Indian conglomerate Bharti Enterprises will become the largest shareholder in the UK’s BT Group after agreeing to buy the stake of billionaire Patrick Drahi’s struggling Altice.

Bharti has agreed to buy 24.5% of BT’s shares, but said it had no intention of making an offer to buy the whole company, in a statement to the London Stock Exchange on Monday.

The Indian group flattered the new Labour government, saying that it was “a vote of confidence in the UK as an attractive global destination for investment, with a stable business and policy environment attractive for long-term investors”.

Yet the sale – at an undisclosed price – also reflects the difficulties facing Drahi’s empire. It bought the first part of the BT stake in 2021, but is now struggling under a $60bn (£47bn) debt load, after apparently being taken off guard by rapidly rising interest rates, and is also dealing with corruption allegations that prompted a Portuguese criminal investigation.

Although the bulk of his wealth was tied to Altice’s telecoms operations, Drahi has come to greater public prominence through his interest in the art world. He owns works by Pablo Picasso and Henri Matisse, and paid an eye-watering $3.7bn in 2019 for the Sotheby’s auction house. Sotheby’s last week sold a minority stake to ADQ, Abu Dhabi’s third biggest sovereign wealth fund, as it looked for cash to invest in a turnaround.

Bharti said it would buy the first part of Altice’s BT stake, equivalent to 9.99% of the UK company, and the remaining 14.51% will be bought when the company receives regulators’ permission.

Analysts at New Street Research said the 9% stake was worth about £980m, the Daily Telegraph reported.

Bharti also said it is applying voluntarily for clearance under the UK’s National Security and Investment Act, which gives the government has oversight of takeovers involving critical infrastructure. The threshold for mandatory notification of government is 25%.

The investment means Bharti’s relationship with BT has come full circle. The British company previously owned a 21% stake along with two board seats in Bharti Airtel Ltd from 1997 to 2001.

Bharti entered the telecoms industry in 1995. Sunil Bharti Mittal founded the company in 1976 as a bicycle components manufacturer, but expanded the business, building one of the conglomerates that dominate India’s economy. Bharti reaches from hotels and property – including the Scottish resort Gleneagles and the upmarket hotel chain The Hoxton – to telecoms and into space with a satellites arm.

Bharti Airtel, the telecoms arm, is the world’s third biggest mobile service provider by subscriber numbers, and Mittal’s wealth is estimated to be $23bn, making him the world’s 84th-richest person, according to Bloomberg.

Mittal said: “This investment demonstrates the confidence we have in BT and in the UK. BT has a strong portfolio of market leading brands, high-quality assets and an experienced management team with a compelling strategy mandated by the BT board to deliver value over the long term, which we fully support.

“BT is playing a vital role to expand access to full-fibre broadband infrastructure for millions of people across the UK. Its focus on strengthening its networks, driving consumer growth, and optimising every aspect of its business makes it well placed to consolidate its position as a leading global telecoms company.”

Allison Kirkby, the BT chief executive, said: “We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy.

“BT has enjoyed a long association with Bharti Enterprises, and I’m pleased that they share our ambition and vision for the future of our business. They have a strong track record of success in the sector, and I look forward to ongoing and positive engagement with them in the months and years to come.”

BT was the biggest riser on the FTSE 100 as trading opened on Monday, with its shares up 6%. In June, the Mexican billionaire Carlos Slim invested £400m in 3% stake in BT.