MTNL shares hit 20% upper circuit on asset monetization plan, budget 2025 boost

The MTNL stock has gained over 17 percent in the past three months.

Shares of Mahanagar Telephone Nigam Ltd. (MTNL) hit the 20 percent upper circuit of Rs 57.21 in morning trade on Wednesday, February 5, as optimism around its asset monetization plans for FY26 fueled a sharp rally. This surge followed a 7 percent gain in the previous session, breaking a two-day losing streak.

The rally was driven by comments from Arunish Chawla, Secretary of the Department of Disinvestment and Public Asset Management (DIPAM), during CNBC-TV18’s Budget 2025 Verdict discussion. Chawla reaffirmed the government’s commitment to helping MTNL and BSNL monetize their assets to unlock value, clear liabilities, and revitalize the sector.

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"We are going to help MTNL and BSNL in monetising whatever assets they have so that the value that is locked in can be redeployed, liabilities are cleared and we can re-energize the sector,"  he added.

MTNL, burdened with heavy debt, was classified as a Non-Performing Asset (NPA) by most state-owned lenders in October last year. Meanwhile, Finance Minister Nirmala Sitharaman, in her Union Budget 2025 speech, announced a new scheme aimed at providing broadband connectivity to select government schools and health centres.

As a result, the entire telecom pack rallied with BSE Telecom index up 1.4 percent at 2,806.

However, despite the renewed policy focus on the sector, the Indian government’s telecom revenue is expected to decline by over 33 percent to Rs 82,442.84 crore in FY26 from Rs 1,23,357.20 crore in the current fiscal, according to budget documents. This sharp drop comes despite upcoming payments from telecom operators for deferred spectrum and adjusted gross revenue (AGR) dues after the moratorium ends in September 2025.

Government earnings from the telecom sector primarily come from license fees and spectrum usage charges (SUC), both linked to telcos' AGR. Operators pay 8 percent of their AGR as license fees, while SUC, which was previously around 3-4 percent, has now fallen below 1 percent following the removal of the 3 percent floor and the waiver on SUC for spectrum acquired post-July 2022. Revenue from captive telecom networks comes through fixed license fees and a nominal one-time entry fee.

At around 10:20 am, shares of MTNL were trading at Rs 56.6 on the NSE, up 18.8 percent from the previous close. The MTNL stock has gained over 17 percent in the past three months.

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