During Monday’s trading session, the shares of this state-owned telecommunications company moved down by nearly 8 percent on BSE, after the company mentioned defaulting on Rs. 8,277 crore loan payments to seven banks including SBI, PNB, and Union Bank of India.
Price Movement
With a market cap of Rs. 2,855 crores, at 02:27 p.m., the shares of Mahanagar Telephone Nigam Limited (MTNL) were trading in the red at Rs. 45.32, down by around 7 percent, as against its previous closing price of Rs. 48.78.
The stock has delivered positive returns of nearly 33 percent over one year, while around 8 percent of negative returns in one month.
What’s the News
As per the latest regulatory filings, MTNL has defaulted on both principal and interest payments to seven major public sector banks: Union Bank of India (UBI), Bank of India (BOI), Punjab National Bank (PNB), State Bank of India (SBI), UCO Bank, Punjab & Sind Bank (PSB), and Indian Overseas Bank (IOB).
The total amount of outstanding borrowing from these banks stands at Rs. 8,277 crores.
Beyond its bank borrowings, MTNL’s total financial indebtedness, including short-term and long-term debt, amounts to Rs. 33,497 crores. This includes a bank loan of Rs. 8,277 crore, SG Bonds worth Rs. 24,071 crore, and a Rs. 1,149 crore loan from the Department of Telecommunications (DoT) to cover SG Bond interest payments.
The defaults took place between August 2024 and February 2025, with the overdue principal payments totalling Rs. 1,450.36 crore, along with overdue interest of Rs. 482.97 crore.
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Previous News
In November 2024, the company defaulted on a Rs. 1,000 crore loan from Bank of India, compelling the lender to make a Rs. 200 crore provision in its financials for Q2 FY25. MTNL has been struggling with financial difficulties, reporting a loss of Rs. 3,303 crore in FY24 due to declining revenues.
As of August 2024, MTNL’s total financial debt stood at Rs. 31,944.5 crore. The company defaulted on payments totalling Rs. 5,726.3 crores, comprising a principal amount of Rs. 5,492 crores and interest of Rs. 234.2 crores. Major lenders affected include Union Bank of India (Rs. 3,480.8 crore), Bank of India (Rs. 1,039.7 crore), and Punjab National Bank (Rs. 447.6 crore).
In early February 2025, the Indian government approved a plan to raise ~Rs. 16,000 crore through the sale of assets owned by MTNL and Bharat Sanchar Nigam Limited (BSNL). This strategic move aims to address the mounting debt burdens of these state-run telecom companies.
Financials
MTNL reported a decline in revenue from operations, experiencing a year-on-year decrease of nearly 11.5 percent, falling from Rs. 192 crores in Q3 FY24 to Rs. 170 crores in Q3 FY25. Likewise, during the same period, the company’s net loss reduced by 0.4 percent YoY from Rs. 839 crores to Rs. 836 crores.
About the Company
Mahanagar Telephone Nigam Limited (MTNL), the state-owned telecommunications company, is engaged in the business of providing telecom services in the geographical areas of Mumbai and Delhi.
Written by Shivani Singh
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