MTNL shares spurt 4% on offering Voluntary Retirement Scheme to trim employee costs

Over the past year, MTNL shares have surged nearly 60 percent.

PSU telecom service provider Mahanagar Telephone Nigam Ltd. (MTNL) shares spurted four percent in the morning session after the telecom player's board approved the proposal of reduction in employee costs.

MTNL will now offer Voluntary Retirement Scheme (VRS) which will be substantially based on the Gujarat Model, but with some changes. Specifically, there will be a educed ceiling on the ex-gratia payment, which is a one-time financial compensation given to employees opting for the scheme.

The VRS will be offered to employees who are 45 years old or older, including both executives and non-executives. The scheme is being offered "so as to make the organization lean and also reduce the staff costs," noted the firm in a filing with the exchanges.

At 9.50 am, MTNL shares were quoting Rs 52.59 on the NSE, higher by 2.45 percent compared to the previous session's closing price.

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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.

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.

Over the past year, MTNL shares have surged nearly 60 percent. However, from its 52-week high of Rs 101.93 per share, recorded on July 29, 2024, shares have taken a sharp tumble of around 50 percent to settle at Rs 51.33 per share on December 23, 2024.

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