Public sector telecom firm Mahanagar Phone Nigam Ltd (MTNL) has defaulted on mortgage repayments price Rs 8,585 crore to seven public sector banks, specifically, the Union Financial institution of India, Financial institution of India, Punjab Nationwide Financial institution, State Financial institution of India, UCO Financial institution, Punjab and Sind Financial institution, and Indian Abroad Financial institution. The default quantity contains Rs 790.59 crore in overdue curiosity and Rs 1,868.61 crore in unpaid principal, in keeping with a inventory alternate submitting.
MTNL’s complete monetary liabilities, together with each short-term and long-term borrowings, at present stand at Rs 34,484 crore, the corporate mentioned.
The telco’s mortgage default and losses have added to the federal government’s monetary burden, particularly at a time when Vodafone Thought, by which the federal government holds a 49 per cent stake, reported an enormous lack of Rs 27,442 crore for FY25. The mounting losses at each telecom firms underscore the challenges the federal government faces in reviving struggling public-sector and semi-public-sector enterprises within the extremely aggressive telecom sector.
MTNL’s monetary well being stays poor. For the monetary yr ended March 2024, it reported a web lack of Rs 3,302 crore and an working revenue of simply Rs 728.47 crore. The corporate acknowledged in its FY24 annual report that it has amassed heavy losses, its web price has been totally or considerably eroded, and it has confronted web and money losses in each the present and former monetary years. Moreover, the corporate’s present liabilities exceed its present belongings, in keeping with the report.
MTNL’s shares fell 4.22 per cent to Rs 49.92 on the BSE on Tuesday. The entire market worth of its shares stood at Rs 3,145 crore and the federal government holds 56.25 per cent stake within the firm.
MTNL-BSNL merger plans
The sooner plan to merge MTNL with Bharat Sanchar Nigam Ltd (BSNL) now seems unlikely. As a substitute, the federal government has authorised a 10-year service settlement below which BSNL will handle MTNL’s operations, particularly in Delhi and Mumbai. This association is designed to deal with the complexities of a full merger, together with MTNL’s excessive debt burden. The settlement might be renewed or terminated with mutual consent or by giving six months’ discover. BSNL has already taken over the operation and upkeep of MTNL’s cell companies, efficient from April 1, 2021 in Delhi and from September 1, 2021 in Mumbai. The federal government has additionally prolonged the extra cost of Chairman and Managing Director of MTNL to A. Robert J. Ravi, who can be the CMD of BSNL, for an additional three months, till October 14, 2025.
In an effort to enhance its monetary place, MTNL has taken steps to raised utilise its bodily belongings. It has signed a Memorandum of Understanding (MoU) with BSNL to share community and infrastructure to boost service high quality. The corporate can be renting out its buildings in Delhi and Mumbai to generate further income, with potential plans to make use of these belongings for promoting and brand-building, the Annual Report says.
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MTNL asset monetisation plans
MTNL has been mandated to monetise surplus land and constructing belongings to scale back debt and fund capital expenditure, in keeping with a Cupboard-approved revival plan. To this finish, the Nationwide Land Monetization Company (NLMC), established below the Division of Public Enterprises (DPE), has taken over accountability for monetising belongings of central public sector enterprises (CPSEs), following a authorities resolution to switch this perform from the Division of Funding and Public Asset Administration (DIPAM) to the DPE.
MTNL has restarted its monetisation programme below NLMC, submitting 4 properties valued at over Rs 100 crore every, which at the moment are within the technique of being monetised. Concurrently, the corporate is working to monetise smaller properties — valued under Rs 100 crore — by approvals from its board of administrators and the Group of Ministers overseeing the revival of MTNL and BSNL. Transaction advisors have been appointed for the monetisation of seven properties, every valued below Rs 10 crore.
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