Winning Bizness Desk

Mumbai. Mahanagar Telephone Nigam Limited (MTNL), the state-owned telecom operator, has defaulted on loan repayments totaling ₹8,346.24 crore owed to seven public sector banks. This includes a substantial ₹3,633 crore from Union Bank of India. The defaults occurred between August 2024 and February 2025, with overdue interest payments amounting to ₹1,450.36 crore and principal dues of ₹482.97 crore. As of March 31, 2025, MTNL's total debt has escalated to ₹33,568 crore, encompassing sovereign-guaranteed bonds and loans from the Department of Telecommunications.

Persistent Financial Losses and Operational Challenges

MTNL has been grappling with financial instability for several years, recording a net loss of ₹3,800 crore in the fiscal year 2022-23. In the quarter ending September 2024, the company reported a consolidated net loss of ₹890 crore, with revenues declining to ₹174 crore. Analysts attribute these challenges to intense competition from private telecom players and outdated infrastructure, leading to a significant erosion of MTNL's market share.

Government Interventions and Restructuring Efforts

In response to MTNL's financial distress, the Indian government has taken several measures. It has issued sovereign guarantee bonds worth ₹24,071 crore to support the company. Additionally, a service agreement was signed between MTNL and Bharat Sanchar Nigam Limited (BSNL) on November 22, 2024, transferring MTNL's telecom operations in Delhi and Mumbai to BSNL effective January 1, 2025. This move aims to streamline operations and reduce financial strain.

Asset Monetization and Debt Repayment Plans

To address its mounting debt, MTNL has initiated asset monetization strategies. The company has raised ₹2,134.61 crore from the sale of land and buildings and an additional ₹258.25 crore from telecom assets. These efforts are part of a broader plan to utilize proceeds from asset sales to repay debts and stabilize the company's financial position.

Stock Market Performance Amid Financial Turmoil

Despite its financial challenges, MTNL's stock has exhibited volatility. Over the past five years, the share price has surged by over 500%, reflecting periods of investor optimism. However, in the current year, the stock has experienced a decline of approximately 14.65%, with a 13.14% negative return over the past six months. As of the latest trading session, MTNL's shares closed at ₹43.85, bringing its market capitalization to ₹2,760 crore. MTNL's financial trajectory remains uncertain, with ongoing efforts by the government and the company to navigate through its debt crisis and operational challenges.