BSNL, MTNL aim to monetise Rs 1,000-crore land assets this fiscal to ease financial stress

The initiative is aimed at reviving the financial viability of BSNL and MTNL

In a renewed effort to financially stabilise Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), the government intends to raise around Rs 1,000 crore in the current financial year using land parcels owned by the two state-owned telecommunications companies, an official said.

The monetisation plan, aimed at easing the debt burden and improving liquidity for the telcos, involves the sale or leasing of land assets identified by the finance ministry’s Department of Public Enterprises (DPE).

The government official said that the DPE would recommend suitable assets for the process. “BSNL has two or three land parcels under consideration. The total land value from both BSNL and MTNL is approximately Rs 1,000 crore, which is likely to be monetised this year,” the official told Moneycontrol.

The initiative is part of a broader plan to revive the financial viability of BSNL and MTNL, which have struggled for years amid rising operational costs, a declining subscriber base and mounting debt. The move comes at a time when both BSNL and MTNL are reeling under heavy debt. As reported earlier, MTNL defaulted on loans worth Rs 8,346 crore across seven public sector banks, with its total debt obligations crossing Rs 33,000 crore as on March 31, 2025. BSNL recorded Rs 23,297 crore of debt on its books as of November 2024.

Also read: Cabinet Secretary to meet bankers on May 16 to avert action against MTNL for loan default

Monetisation process 

While the government has set an internal target to complete the lease or sale within FY26, officials admitted that procedural challenges, especially those related to land ownership, could push the timeline beyond March 2026. The complications arise since the land assets are in different states.

“Land is not an easy subject. It is a state subject. All the documents, everything has to be in place. BSNL will (complete the process) this year or it may even be next year. It will take time, it may not happen in one year,” the official added.

The process involves obtaining clearances from the state governments concerned, resolving legacy title issues, and ensuring proper documentation, which could slow things down despite the intent to fast-track the initiative.

BSNL land parcels

At least two land parcels belonging to BSNL have already been shortlisted for the monetisation drive. Specific details about the location and size of these properties have not yet been disclosed, but sources indicated that these are in commercially viable zones and could attract significant investor interest.

A similar process is on for MTNL, although the value of monetisable land assets is expected to be smaller compared to BSNL.

Financial stress

Against the backdrop of MTNL’s mounting dues and multiple loan defaults, cabinet secretary TV Somanathan has called a high-level meeting with the heads of major public sector banks on May 16 to prevent immediate adverse action against the state-run telecom company.

BSNL, although relatively better placed than MTNL in terms of operations, continues to grapple with years of underinvestment in network upgrades and growing competition from private players.

In 2019, the government had announced a revival package for BSNL and MTNL, which included sovereign guarantee bonds and voluntary retirement schemes for employees of the two public sector companies. However, progress on various components of the plan has remained uneven, with asset monetisation emerging as a key tool for recovery.

Execution risk 

While the Rs 1,000-crore target is modest relative to the scale of liabilities, the real challenge lies in timely execution, the official said.

“Monetising government land is a complex exercise due to fragmented documentation and state-level approvals. Even if the properties are commercially attractive, the realisation depends on administrative speed and investor appetite,” the official added.

The asset monetisation of BSNL and MTNL is in line with the Centre’s broader strategy to unlock value from underutilised public assets. Separately, finance minister Nirmala Sitharaman had announced the second asset monetisation plan for 2025-30 in Budget 2025, targeting Rs 10 lakh crore by monetising government assets for reinvestment in new infrastructure. The first proposal was made in 2021 and the target up to 2025 was Rs 6 lakh crore.