MTNL shares rise on talk of a revival plan, NCLT route 'ruled out'

SBI is also seeking details of MTNL’s land monetisation plan, and has asked MTNL whether the proceeds from a key project with NBCC would be used to repay outstanding loans.

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26 Aug, 2025 12:21

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PSU telecom service provider Mahanagar Telephone Nigam, saddled with a debt of over Rs 31,000 crore payable to various lenders, may find a revival plan coming its way and may not head to the NCLT route for resolution, CNBC-TV18 reported on October 14 citing sources familiar with the development.

Shares of MTNL spiked to day's high soon after the report, trading above Rs 59, higher by close to 4% at 11:30 am. On a YTD basis, shares of MTNL are higher by 58%.

Sources told the channel that MTNL going under NCLT may not set the 'right precedence for PSUs', and the issue is to keep MTNL 'as a going concern'. There may be a case for a fund infusion into MTNL, and a Committee of Secretaries is examining the matter currently.

Moneycontrol had reported in August citing sources that Centre was not keen on “going all out” to aid the recovery of MTNL, and only honour existing commitments on interest on Sovereign Guarantee Bonds. This implied that further monetisation or a merger with BSNL was unlikely.

Sources told CNBC-TV18 that there may be a requirement of fund infusion worth Rs 8,000 crore into cash-strapped MTNL.

Several lenders have classified MTNL as a non-performing asset (NPA), latest being State Bank of India, with a total debt of Rs 31,944.51 crore outstanding to several banks. This amount is nearly ten-times the market capitalisation of MTNL.

SBI is also seeking details of MTNL’s land monetisation plan, and has asked MTNL whether the proceeds from a key project with NBCC would be used to repay outstanding loans. After SBI’s classification of MTNL as an NPA, Union Bank of India and Bank of India too have already categorised the company’s debt in the same manner.

Earlier this year, a PTI report had hinted citing sources that Centre may consider handing over the operations of MTNL to the bigger PSU telecom entity BSNL, instead of merging the two.

Any default by MTNL on its debts may also adversely impact financing of other PSU entities.